[LONG] Cost of doing business was Re: [thelist] Whats it worth??

[Martin]

On Tuesday, May 7, 2002, at 01:53  am, Ben Henick wrote:

> On Mon, 6 May 2002, Daniel Fascia wrote:

Sorry Dan - missed your original question (I was away last week,
and only resubbed last night)

>
>> Im looking for some more wisdom from the experts. This question is
>> mainly aimed at UK web developers...
>
> ...And there was a great article on the site, written by Martin IIRC, on
> how to assess your circumstances in order to decide what, and how, to
> charge.

Nup - it was a tip to thelist:
http://lists.evolt.org/index.cfm/a/harvest/b/detail/c/Week-of-Mon-20020225.
html/d/4226
Your explanation was good (and more detailed too).

>> I have been asked to develop a site for wine sales incorporating online
>> selling, stock management and order processing, the whole shebang...
>>
>> I have no idea how much such a site should cost to develop and once
>> again its for a friend who has no concept of the cost of web work
>>
>> Could someone give me some sort of guidelines. I find this quite a
>> daunting topic since there are no set standards for how much web
>> development costs
>
> At first glance, it occurs to me that the job in question may require
> you
> to extend your skillset, if you intend to handle both the client and
> server sides of the job.  You may want to look into subcontracting or
> co-contracting an experienced programmer, unless your expected time to
> delivery is generous.

It's also a complex business issue, particularly if you're going to
be handling the stock system (if anyone mentioned CPFR, be
very afraid).

> 1.  Discussion of specific hourly rates is out of bounds on this list,
> and
>     on any list physically hosted in the USA, as a result of antitrust
>     concerns.

Unlikely to affect any discussion on a UK issue anyway.

> 2.  Since you have little experience with this sort of work, it will
> most
>     likely have to be billed on a time and materials basis.
>
> When you've done the work before, and you've established a process and
> can
> see the entire engagement through a crystal ball from the time you write
> the opening sentence of your proposal, fixed-cost bidding is feasible.
> But this is emphatically NOT your environment.

Agreed, but clients like some kind of indicative cost (eg "Time and
materials, and we expect it to come out in the region of £x"), otherwise
they have a feeling of blank-chequeness.

> Nor is it possible to collect viable estimates from other developers,
> without going into a lot of detail as to how the proposed site will
> function.

...and defining those requirements should be part of chargeable work.

> It's tempting when inexperienced to charge what you need to live on,
> when
> in fact you need to take into account a bunch of other costs, which in
> this instance are laid out with the independent lone developer in mind.
>
> a.  Rent:
> b.  Utilities and services:
> c.  Equipment:
> e.  Insurance:
> f.  Holidays:

...and being ill which affects how much time you actually have available
to produce feeable work.

> g.  Federal and local income taxes:

Business taxes.

> h.  Payroll taxes:

If you're not a sole trader, employer's NI (if you're
self employed, take into account employees' NI). Both have just gone
up 1%/

> i.  Professional services:

> My client has
> paid for my meal every time we've gone out to eat, and I'm not spending
> much on equipment.

Absolutely - if your income doesn't come from clients, where *do* you
expect it to arrive from?

Cheers
Martin
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