What should be the pricing for IT services (development)?

Question

Fintech

Hello!
How do you think pricing should be built in software development, programming, etc. (not sites) team if provide development services at hourly rates and monthly? What formula should be used to calculate in such a way that it is clear and transparent for the customer?
Conditionally - payroll of an employee (with taxes) + expenses for an employee + rate of return (what?). Right?

Answer 1

I do not advise showing pricing to the customer at all.
It's none of his business. At all.
Do you sell development services? Here, sell them.
And the fact that the five of you live in a cardboard box under a bridge or - on the contrary - you work better at the sight of burning 500-euro banknotes - is up to you.
As you consider the cost of a particular case - so consider it. Behind the scenes, beat up your cupcakes and opexes.
Just imagine that you are now not you personally, but a certain role that you play. First, you play a gender - you come up with general rules that are reinforced concrete, a strategy, a mission (I'm not joking. But you don't have to worry). Since you are selling not a product, but services, a marketer and others are not particularly needed. Means - run in a chair of a sale. You have to sell something in order to earn money for Big Mac (just kidding, but seriously). Sold? Now sit down in an armchair of an ops and scold yourself - "I promised from three boxes, but sell it to me ...". And look for ways to fulfill what was sold without violating what the gender thought up even earlier.
Found? Wonderful. Go ahead, implement.
In the meantime, the implementation is rushing - again in the chair of the sale. Then oops again. And another cycle.
Yep, got the first order. Cool.
And then the ops is already cracking his head. Let the team lead appear, and the ops be engaged in processes.
...something like this to start

Answer 2

Any customer is primarily interested in 2 things:
a) how many resources will he need for the project?
b) why so many?
The general approach is to decompose the tasks specified in the statement of work.
To what level - depends on the specific customer and the size of the project.
My subjective point of view is that at the stage of sale it is necessary to decompose a conditional average project to 30-60 tasks.
More - too expensive, less - too large errors.
But again, this is my experience and my typical projects.
If someone writes an ERP system, there are not many 500 lines in the assessment.
How exactly the assessment of each task is expressed - immediately in money, or in hours multiplied by money - is a personal matter. I think that the rating in hours multiplied by the rate comes in better.
The question "why the rate is such" - as a rule, customers do not ask.
The rate is such, because such a rate on the market.
PS In general , InoMono wrote correctly.
Custom development as a business practically does not scale horizontally.
Good managers want a lot of money, and a large development team quickly eats up all the profits at the slightest downtime.
The output is only vertical scaling.
PPS see more Is it worth starting a web studio?

To work systematically, you cannot approach from the series - try to sell as much as possible personally

- your words.
How this is done systematically - I wrote above.
How it is done not systematically - wrote InoMono
What is the question then?
The customer understands when instead of "I will make you a website in 200 hours" they send him (all numbers are conditional):
at will, large blocks are also signed, instead of "imposition html 40" - layout of the frame, layout of the main page, layout of page X ...
Or the question "what is the rate of return"? Everyone is different. from two to five digits.

Answer 3

Weird question.
The maximum you can do for yourself. There is competition - so the top will always be limited. But it depends on your organization of work, suspended language, acquaintances, luck, etc.

Answer 4

it all depends on the strategy in which market you are in
. if you rivet quick projects and know the exact terms for their reproduction, then you know the time for work, then add to this cost the time you spend on indirect work, coordination with the customer. negotiations with potential customers, search for projects. Pack it in a box and sell it.
If the task is more serious, consider the cost from the technical task, the more floating it is, the less accurate ranges you can give. Therefore, aiming and evaluating the cost of such work by eye, you can easily get into trouble. So it's better to just agree on a contract by the hour. The cost of an hour on the market is also not difficult enough to be detected.
Dmitry beautifully voiced two questions of the customer, apparently he only deals with good customers. There is also a different type of customer, and therefore any technical task that splits the amount into subtasks can become a reason for the customer to downgrade the project, say, by simplifying its parts, and here you need to be sure that there will be simplification. something like this. In general, only experience will give the right path.

Answer 5

By what formula

No. We simply name the maximum amount at which we find ourselves full-time busy and do not have to refuse too many orders.