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View Full Version : Cost of Labor?


DakotaHosting
12-31-2005, 01:24 PM
I recenty had a small business moved over to my resell business. The client had an old HTML based site with a very old text-based Web forum. I offered him, for free, not only to move his site from his old host provider to mine...but also to work on his own pages to better integrate the Simple Machine Forum (MySQL based) with his current site.

I offered my services for free for two reasons:

1. His future referrals to my business is more beneficial than making a few extra bucks.
2. I wasn't sure what a fair price would be to charge him.

When charging clients, I'd rather charge by the "task" than by the hours spent. I think most clients want to know the cost upfront and not have any hidden costs on the final bill. Does anyone perform special installs and charge by the "task"? If so, can you give me some ideas what are fair prices?

Thanks, Bryan

StackHost
12-31-2005, 05:17 PM
Fair is what you make it. Consider how much you believe your time is worth for the project and charge that amount. There is no standard for this sort of thing.

Good luck.

PalSys
12-31-2005, 05:58 PM
The only problem I've encountered when charging a flat rate is underestimating the time it will take to perform a given task. There have been a few times when my flat rate ended up paying me $5 an hour after working out all of the bugs in a custom installation, etc.

dynamicnet
12-31-2005, 07:13 PM
Greetings:

http://graphicdesign.about.com/library/weekly/aa092702a.htm can be a good guide for what is a good hourly rate.

Then come up with a minimum billing rate. When calculating the minimum billing rate, keep in mind the time to set up a customer, invoice the customer, collect from the customer, apply the money collected, any other time involved (customer service, sales, etc.) in addition to the production tasks.

Use the minimum billing adjusted for the time involved to come up with a task rate.

Thank you.

Anky
12-31-2005, 07:27 PM
Even though you want his future referrals, don't count on them! Charge a fair rate and do your best to ensure he has no reason to feel he spent "too much" - that will be worth more to him than paying you half the price in efforts to get referrals, just my opinion anyway.

beruska
01-01-2006, 02:05 AM
Charge a fair rate and do your best to ensure he has no reason to feel he spent "too much"
correct! For us, this method worked pretty well. I hope it does for your biz too.

Cheers,
Beruska

niyogi
01-01-2006, 06:09 AM
How much time did it take you to do the forum integrate and the web development work you did?

At the end, it really comes down to the opportunity cost of your time value and the possible ROI on referrals from the work you've done. If you've done it for free, it might get you referrals but then the referrals might want to have some work done for them as well.

Roj

DakotaHosting
01-01-2006, 11:20 PM
At the end, it really comes down to the opportunity cost of your time value and the possible ROI on referrals from the work you've done. If you've done it for free, it might get you referrals but then the referrals might want to have some work done for them as well.

That's a good point...I don't want to get a reputation of being too cheap. I of course spent more time than I should have and if I had to do it all over again, I would have charged the client for my time. I should mention though, the long term plans are to evolve his site more into an ecommerce site, so I figure that I can recover some costs down the road.

The funny thing about all this...it would have been much easier to have moved the old html/shtml pages over to a CMS. I had started doing that, but the changes were too professional looking. Moving the site too quickly from it's "homemade" look, might have lost his some current customers who were comfortable with his signature look.

-Bryan

imago-allan
01-02-2006, 12:37 AM
Thanks for the link. This is helpful.
:)

Greetings:
http://graphicdesign.about.com/library/weekly/aa092702a.htm can be a good guide for what is a good hourly rate.