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what to charge?

what to charge?

what to charge?

(OP)
This may seem like a silly question but how do you know what to charge your clients?  I am thinking of starting my own Land Surveying/PE firm and know how to do the tech stuff but am clueless on the biz side of the equation.
Thanks
John

RE: what to charge?

You know how to charge your clients based on several things:

1) how much you NEED to pay yourself (first and foremost)
2) all other operating costs (and I mean ALL of them)
3) whatever profit you can righteously make over 1 and 2

There's no magic bullet for determining what you should charge.

There is one thing you should NOT do - and that is call around asking other people what they charge.  I get dozens of calls per week from jerks, pretending to be customers, simply asking me what my "rate" is, or pretending to have work for me to quote.  That's not professional, it's not honest, and it's no good indicator. (so please don't do that to othe people)  That will only waste your time and theirs, because if they have a handle on their business, and know what to charge, they're already ten steps ahead.

My advice, from experience - look at median salary statistics for people in your field, in your area, and base your own salary accordingly.  Factor in your expenses, estimate you yearly workload, and then derive your base charge.  Re-evaluate it in a month or so.  Once it seems like you're making money, re-evaluate every 6 months or so. When you know you're making money, adjust only when necessary.

Hope that helps.

---
CAD design engineering services -  Catia V4, Catia V5, and CAD Translation.  Catia V5 resources - CATBlog.

RE: what to charge?

If you work in the field, you should have an idea. Ask your friends, they should have an idea too. See where the numbers fall.

Start somewhere in the middle. If you are not getting any work, start lowering the rate. If you are busier than ever, start raising your rates.

Keep an eye on your breakeven point. If you fall below it, time to start working for someone else.

"Do not worry about your problems with mathematics, I assure you mine are far greater."   
Albert Einstein
Have you read FAQ731-376 to make the best use of Eng-Tips Forums?

RE: what to charge?

Look at thread784-152317 for a current discussion on this topic.

David

RE: what to charge?

There are two people you need to run your own business.

One is your Attorney.
The other is your Accountant.

You should have these people lined up before you start your business, how you set it up is very important. With this in line, one of them, the Accountant, can help you figure out what you need to charge.

That's why we hire Attorneys and Accountants; It takes out the guess work.

Charlie
www.facsco.com

RE: what to charge?

icelad,

Perhaps you should try to get involved in the business side of your current employer's operation.  Knowing the tech stuff is not enough to keep you in business and out of trouble.  Being a great engineer does not mean you will be a successful business owner.  You need experience in the other aspects of the engineering/surveying business.

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