How to calculate Project rates

If you are working in a partnership, wherever you are in the world, it is very important to think about how you are going to price projects. Here is a straightforward way to make sure that you get a fair price for your work. In this example I will consider a one week project that two people will be working on.

1. Calculate total expenses per week

This would involved the wages paid to the partners and employees, rent, utilities, travel expenses and any other recurring expenses.

€1,250

2. Determine the number of working people on the project.

Let’s say the partnership involves a business development person, an accounts/customer relationship person, a programmer and a designer. The two persons who will be directly working on the project will be the programmer and the designer, so we have to divide the expenses per week between those two.

€1,250 / 2 = €625

4. Multipy that by the required profit and allowance for unforeseen delays and expenses.

For a company to grow it must make profit, so we have to multiply the expenses by a percentage profit we want the company to make. We must also consider unforeseen delays and expenses. We will therefore multiply the expenses by 40%

€625 * 140% = €875

There we have the final price for the project, which includes a profit for the company and an allowance for things like delays or difficulties which many IT projects have to face.

Another excellent guide for calculating day rates can be found here

Benefiting from the European Entrepreneur Exchange Programme

I have been recently selected as the first new entrepreneur to benefit from the European Entrepreneur Exchange Programme, which gives new entrepreneurs the chance to spend some time working with an established entrepreneur´s company.

I have been matched with a web development company based in Barcelona (Spain), where I have around a month to gain as much insight as possible. In my first week here I have already learnt alot, as Jordi Bufí, one of the company´s young directors, walks me through the start of Neurotic and the several challenges they have faced during the years. According to Jordi, one of the best ways to learn is to examine past mistakes that a business makes and analyse why they were made. This serves as an important lesson which helps you plan things in a better way to avoid such pitfalls. Of course mistakes are practically unavoidable in every business, and especially so when you are a new young entrepreneur with little experience. The advice and guidance of mentors at this stage of starting a new business is many times crucial for steering you in the right direction, and that is why I believe the Erasmus exchange program is very beneficial for new entrepreneurs.

Myself with the Neurotic team

Existing entrepreneurs who act as hosts for new entrepreneurs like myself, can also benefit through having someone on board who sees things from a different viewpoint. The fact that the new entrepreneur is coming from a different country with a different marketplace and way of doing things definitely acts as a spark for interesting topics and potential opportunities for collaboration and internationalisation of services. In my case I can also help the people in the company get more practice in the English language, which can serve them well when dealing with non-Spanish clients. Vice-versa I am also learning Spanish which gives me access to one of the world´s biggest markets.

I believe that the European Union is really giving an excellent opportunity to budding entrepreneurs to get up and running with the Erasmus for Young entrepreneurs programme, so I definitely encourage any young person who is thinking of opening up a business to take advantage of this programme!

Logo of Neurotic, the company where I am working

Misleading advertising? Pizza or no free pizza?!

Here is a REALLY misleading advert by a Pizza outlet in Sliema. These things really shouldn’t be happening nowadays…

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