Upfront Billing Rates
Customers have a right to know that the billing rates are not arbitrary - below is a detailed breakdown and explanation of each part of the billing rate that my clients pay for the good work I do.
- Base Pay: If you were to hire a permanent Web CMS Producer/Developer to work for you for a total of 40 hours x 4 weeks x 10 months you would have to pay an average annual salary of $110,000 (You can check Salary.com, poll employers/HR, or your favorite resource for current salary figures); that is before adding the cost of benefits, office-space, communication, and other facilities necessary for work.
- Operating Costs: Beyond the base pay (mentioned above), facilities are necessary to keep the office operational to realize the scope of your project. These include: Project Management tools, office space, telephone, Internet access, Computer Equipment, Software, etc - adds up to $15,917.25 per annum (2010 figures)
- Benefits: The cost of providing healthcare, insurance, and other necessary benefits - adds up to $17,690 per-annum for 2011 [mahealthconnector.org exchange].
- *NB: Holidays, vacations, training-days, sick-days, personal days etc will account for up to 8 weeks every year - hence the excluded 8 weeks
- Business Stability & Profit: Businesses need to make profits so as to create an operating reserve and grow in the marketplace, this figure is set at 25% of the total figure from the above costs
- Calculation: We will add all the numbers and divide the sum by the (10 months x 4 weeks x 40 hours) = 1600 hours a year
- Benefits costs: $17,690
- Operating costs: $15,917.25
- Base Payroll: 110,000 per annum
- Sub-total (add 1 to 3): 143,607.25
- Business Stability + Profit + Flexibility: 25%
- 179,509.06 for 1600 work-hours/yr results in an hourly rate of $112.19
