General Question

mrrich724's avatar

How much should I charge for my service?

Asked by mrrich724 (8537points) March 19th, 2010

I am writing a business plan for my friend. He insists on paying me. How much should I charge.

It is a small business, a bakery, and I will be handing him a complete business plan.

Thanks for your insight!

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23 Answers

njnyjobs's avatar

What is your time worth? If you were employed at your ideal job, figure your hourly wage rate that you think is fair for your skills and knowledge and add 25% to 50% to it. You can use that as an hourly rate benchmark.

DeanV's avatar

How many hours did you spend on the project?

Pretty_Lilly's avatar

More than a Dollar,, less than a Million !!

mrrich724's avatar

I will be spending 10 to 15 hours on it.

@prettylilly . . . thanks :)

palbertq's avatar

Have you written successful business plans before?

mrrich724's avatar

Yes, but only for a couple friends, and I did it gratis.

SeventhSense's avatar

A dozen cupcakes…oh and some chocolate eclairs

gemiwing's avatar

I would use this salary tool, then take off 20% or whatever you feel is appropriate for a discount. (Take the annual salary and divide it by the time it will take for you to complete the project.)

lilikoi's avatar

Tell him to pay you in pastries.

njnyjobs's avatar

One pice of advice to avaoid a potential rift between friends – Before you commence the service, make sure that the person is willing and comfortable with the price you’re about to charge him. You can also add a caveat that if he’s overly impressed with the plan, he can freely add any amount to the price you will be charging.

Zaku's avatar

You could ask for something related to and conditional on the company’s future success. Like ya, a free pastry a day, or % interest in the business, or a contract with the company if it gets to a certain stage that needs more of your work, or a % of net profits up to a certain amount.

That way, if his business succeeds with your plan, you get some of the reward.

ChaosCross's avatar

Fifty big ones!

Val123's avatar

Hm. Well. I hope he peruses it carefully, as it’s his road map for success. I ended up writing about five business plans over the 4 years I had the shop.

malevolentbutticklish's avatar

Charge 1% of his third year net.

marinelife's avatar

I would charge him $40 an hour. That way the total price for the business plan would be between $400–600.

cbloom8's avatar

It depends on the success of your previous plans and this one itself. Wait and watch and see how it does. I would suggest 10% of sales for the first 6 months, although you might stretch that out to a year depending on the speed of growth. Also, address the chances of altering the plan and adjusting payment accordingly – you don’t want a slight alteration to eliminate your payment all together.

YARNLADY's avatar

I would go with a percentage of the profits.

thriftymaid's avatar

This falls under the profession of business consultant. For this service by a professional, the rate would be between $45 and $150 per hour. You can decide for yourself.

mrrich724's avatar

@ everyone who says “charge based on the performance,” isn’t that pretty much like me saying “pay me in shares of stock.” I feel like that method isn’t ad good as a flat rate b/c I am nt giving a set value to my service rather I am asking to become a partner in the venture b/c I am trading my expertise for profit sharing.

mrrich724's avatar

Also, what if my bplan is sound, but other factors lead to the company floundering, that method would cause my service to be worth less based on the faults of others/external forces…

malevolentbutticklish's avatar

@mrrich724: If you bill based on company performance what if the company does better than expected having nothing to do with your business plan? You receive the upside in this case. Since you have the potential of this upside you must also share the potential of the downside.

marinelife's avatar

The soundness of the business plan is totally separate from the performance of the company.

YARNLADY's avatar

@marinelife Good point, my answer is probably not the correct thing to choose.

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