Sheridan Interactive Multimedia | Project Management 1

Pricing and Profit

Determining Earnings

To determine your earnings, you should look at your "salary", your expenses, and a profit margin.

Adding them together will give you a total earnings target. Your expected profit margin is 20%.

Earnings = Salary + Expenses + Profit
$30,000 + $15,000 = $45,000
Profit = $45,000 * 20% = 9,000
Earnings = $45,000 + $9,000 = $54,000

Pricing a project

The price for a project will be determined by the hourly rate. plus billable extra charges, changes or short timelines, etc.

To Bill By the Hour

Divide your earnings by your billable hours: $54,000 / 1,200 = $45
Your hourly rate would be $45.

To Bill By the Project

Divide your earnings by the average number of projects per year. Additional fees for special requests, short timelines are extra.
$54,000 / 16 + 0 = $3,375

Your per project rate would be $3,375 - for a 3 week project with no special requests.

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Interactive Multimedia ~ School of Applied Engineering and Computing Sciences ~ Sheridan