When factoring the cost of hard disks, control panel licensing, etc. how do factor non-recurring costs?

For instance, when you price bandwidth, you know that it will be $[x] this month, and $[x] next month. How do you amortize the cost of your control panel software, servers, etc.--over a year, 6 months, 3 years, etc.?

Just curious.

well these can be looked at as cost of doing business and necessary expenses, you don't include your computer in the costs but it is needed to manage your business

I disagree. We factor in the cost of everything it takes to run our business as a part of our budgeting excercises. I would hate to get to the end of a year and find out that we really didn't make a profit because we forgot that we had to pay for PC's, software, etc.

In our case, it is based on the life of the item in question. For example PC's have a 3 year life cycle etc. Maintenance for software is realized in the year that we use it.

This isn't the only factor in determining our pricing, but it certainly plays a part. After all, this wouldn't be worth it if it wasn't profitable. ;)

The absolute best measure of a small business's success and growth is simply its cash flow statement. Since I highly doubt you use accrual accounting methods, you are a cash-based company. In this case, your bank account balance is your bottom line.

I hope this helps :)

The IRS makes you depreciate it over 5 years, however, our experience shows 2 years is about max for a server. If the software is upgradable, it may last longer.

Most of the time, you can buy a new server for what it costs to upgrade an old one and some things just cannot be upgraded.

If you get more than 2 and you use 2 for your cost basis, you get a bonus.