Related Posts
Please let me know the in hand salary guys!
Power engineer salary NY
More Posts
Can I get refferal for Backend Developer or Full Stack Developer? I've experience in PHP, JavaScript, Node.JS, Angular, Express.js, jQuery, MySQL, Python, Docker, Redis.
Total work experience - 3+ Years
Tata Consultancy Amazon IBM Infosys GlobalLogic Atos Zoho Persistent Systems Limited PwC Publicis Sapient
How do you stay fresh with insights ??
Additional Posts in Consulting
Love is not enough!
Thoughts on Infosys Consulting? Any experiences?
Controversial: Work-Life Balance Is Overrated.
Good books on corporate sales strategy
New to Fishbowl?
unlock all discussions on Fishbowl.
For time and materials, take your billable hours and multiply that by the associated rate(s). For fixed fee you would need insight into the actual payroll costs and target margin of the deal (i.e. the staffing model and cost structure).
All contracts will carry specific overhead costs that are built in - commercial and capital expenses, contingency, etc. - have to remove all of those.
Then you need to determine what your allocated and overhead costs are relative to your firm, usually captured in a 'load' to your cost basis. These are all of the things your firm needs to pay for that have to be offset by the revenue that you and your colleagues bring in - your laptops, the cost of internal resources, the cost of office space and operations, the cost of your senior leadership that are generally non-billable.
What's left is ultimately your individual contribution to operating income, and it's likely to not be terribly significant.
A bigger question is how much of the revenue you 'realized' in a given year you would be able to attain without your firm. How many of the projects could you have sold your role in to the client on your own, and what kind of rate would you command?
A lot of people like to just multiply their hourly rate by their hours worked and marvel at how small a percentage of that amount they actually get to pocket. But they almost never factor in how little of that they could actually command absent their company / teams, and they never take into account the significant costs that are already planned for that revenue number just to keep the firm operating.
MD1 - Great thanks. I'm enlightened
Pro
Some unscientific calculation from personal experience showed about 80-20 split between the firm and self
https://drive.google.com/file/d/1cN2XfWjo7P5yDl2hhghfzOBY8TpjkqWh/view?usp=drivesdk
Look at the margin on the financial model, your “cost basis” should include all of your overhead costs
You want to make a business case to your partner with this data ? Great idea
Right