How bad cost calculation is costing services businesses
How low is too low?
Contrary to what you might assume, selling projects at an unsustainable price is not the type of thing you’ll automatically recognize by gut feeling. And if you’re basing your prices on what your competitors are doing, you’re playing a dangerous game.
Why your project managers need access to employee cost rate
Your first defense against pricing projects incorrectly is to account for the company overheads and profit margins in cost and sales rates. Your second defense is to have management’s eyes on these financials.
The cost rate formula your business needs to price services correctly
Use this formula to learn the cost rate for an individual employee: