1. E-Business Consultancy Setting Your Fees

2.  Client wants you to do the work in its entirety just as proposed  You have to be scientific about your fees  Must be able to break it down into components  Your fees must do four things

3. Fees Must Provide Four Things  Must provide with personal income appropriate to your skills, knowledge, and experience  Must meet all the costs of running your business  Must provide a surplus or profit (to recompense you for the risk you’re taking with your resources)  Must enable to you to compete effectively in your chosen market

4. Step-By-Step Calculation 1. Make an assessment of what your skills, knowledge and experience would bring in marketplace as an employee (i. e. annual salary). 2. Find your working days in a year by subtracting number of weekends from 365 days. 3. Divide salary in No. 1 by the working days to get your labor rate.

5. Step-By-Step Calculation 4. Forecast the day you expect to be able to bill clients, on average, each month. 5. List and cost all your monthly overheads 6. Multiply each monthly cost by 12 and add these up to get annual cost of being in business 7. Divide the annual overhead by the number of days in a year which you expect to invoice to customers 8. Add No. 3 and No.7 to get Total Cost 9. Add your profit margin

6. OVERHEADS MonthlyAnnual ($) Secretary1,00012,000 * Office rent 250 3000 * Telephone 100 1200 Postage 65 780 Personnel benefits 40 480 * Equipment 25 300 Stationery 12 144

7. OVERHEADS  Marketing –Personnel (5 days)95811,496 * –Direct Mkt (2.5 x d. labor rate)500 6,000  Practice management95811,496 * (5 days)  Dues and subscriptions 12 144  Automotive345 4, 140  Insurance 26 312  Accounting and legal225 2,700  Miscellaneous200 2,400 *

8. OVERHEADS  Totals4,71656,592  Day you expect to invoice 144 days  Daily overhead rate = 56,592/144= 393.00  Total cost of doing business = 191.50 + 393.00 = 584.50  Profit (15-25%) = 146.13  GRAND TOTAL = 730.63 == 735.00/day