What to charge for Application Development

[Toga]

Hi,

I sure hope I'm not breaking any forum rules with this question but I can't seem to find what I'm looking for anywhere.

I'm looking for a site or a book that might give me an idea on how much I could / should charge for the development of an application.

What I'm primarily looking for are the rules of thumb commonly followed along with the sort of price ranges that are generally percieved as fair or that competitive range you would see between developers. If I go out and build a deck or do some siding for someone, I would probably charge on the square foot basis... Is there a similar rule of thumb that folks use with Application development?

If someone could just point me in a direction, I'd greatly appreciate it...

Toga

 

[chiph]

http://www.realrates.com

is a site run for consultants, and contains samples of contracts people have used and rates they've charged.

Chip H.

 

[MinAmiChief]

I think you should change your perspective a little...

Demand IT:
From a business perspective (ie your perspective). You should be thinking
how much will this cost the company in overall change?
Ie Staff training, Software support, integaration with other systems , cost reduction, increase in accuracy, less risk, increase in customer satisfaction etc..

I think this alone is very difficult. Of course after this analysis you are ready to make the IT world an contract. Only after this analysis will you know what you want and how much your company can pay.

Supply IT:
The IT world will asses the value of your offer. After you shop around you will know how good your offer is the IT world.

Demand Deck:
Building a deck is very different as its hard to measure the amount of utlity gained from a new deck. ie How much benefit is it worth to me?

Supply Deck:
Yet it is easier to measure the cost.
It depends on how the demand for builders, cheap materials.
Be the change that you want to see in the world - Mahatma Gandhi

 

[TheInsider]

This is generally a bad question to ask because some perceive it as price-fixing. You should always, as MinAmiChief suggested, assess your costs and then add an amount that you feel is a fair profit on top of this. Just because company X charges X number of dollars doesn't mean that you have the same costs that they do. When people get together and say the fair price for X is X dollars -- that is price fixing. It's not fair to the consumer. While this practice is done extensively in business, it's not widely discussed.

 

[Toga]

CCTC1....Your point is well taken. Price fixing couldn't be further from my mind. Irrespective of how it may be perceived, I actually posted my question in the spirit of fairness..... Alright, maybe ignorance is a better word.

Understanding that I'm just starting out and figuring that it's going to take me longer than those with more experience, I guess I was hoping for a common rule of thumb approach to fairly estimate a job..... I understand / expect that I wouldn't make as much to begin with.

Perhaps there's not a good answer to my question.....I guess I was just hoping for some help with some sort of boiler plate approach to start out with.

Thanks for the postings thus far....

Toga

 

[MichaelRed]

One place to "check" is to lookinto the local "Temp" market for an Hourly Rate. You still need to generate an estimate of the hours you would need to accomplish the SCOPE of WORK, which needs to include some of the 'little stuff', like installation, documentation, training, warranty, overhead, material supplies, depreciation on equipment ...

But these are often just a percentage of the hours required.

After you "Know" the hours and have decided the Rate and overhead, add some more for profit and 'contingency' (CYA). Next is to make sure you are covered for changes - and make ALL changes as contract changes, including cost and schedual variations IN WRITTING with signatures.

In general, try to defer changes till after the inital scope of work is complete and paid for.

MichaelRed
m.red@att.net

There is never time to do it right but there is always time to do it over