Web Industry Day Rates ExplainedCompanies providing services to the web industry such as web design and SEO often base their charges on day rates. These can be the source of confusion or contention for companies who need to hire firms using day rates as the headline rate can seem high. Often, when evaluating rates, people will take the headline day rate, multiply it by 261 (the number of weekdays in a year) and assume they are being ripped off. For example, a day rate of £325.00 is made to look like a salary of - 261 x £325 = £85k! Nice money if you can get it. In fact this is a nonsense. In simple terms day rates are calculated thus. Number of weekdays in a year = 261
Less - 25 Holidays Total - 72 days Total billable working days in a year = 261 - 72 = 189 Days Now the per person costs for running the business
£500 - advertising Total = £6750.00 This equates to a daily overhead of £35.71 (overhead divided by billable days) Now the required salary including Employers NIC etc A well qualified and experienced consultant salary = £40k (£44475.52 with NIC etc) This gives a day rate of £235.32 (salary divided by billable days) Next comes profit and 20% is an accepted level of profit = £54.21 Now add it all up - £35.71 + £235.32 + £54.21 = £325.24 So the day rate of £325 gives the consultant a salary of £40k and the company a profit of £10k, not what you might call earth shattering and this assumes the company don't get thrown a curve ball. One other thing. The next time you see web services or SEO services that cost £90 a month, ask yourself this question. How much time and effort am I getting for my money? Based on the above, less than two hours. |
