I have a small consulting business that specializes in digital image processing, remote sensing, and workflow automation (using mainly Python, Matlab, R). I have an hourly rate that takes into account wage and overhead such as office space and software licensing. However, I have not figured out the most appropriate way to charge clients for computer processing time. For example, I may bill 12 hours for developing a script to process imagery in some way, but then I often have to tie up a computer for a week while the program is processing the imagery. Granted, I do not have to actively work while the program is working in the background, yet this is tying up resources that could be used for other projects. How should I take into account computer processing time when billing a client?
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1Are you talking about using your regular work machine to run scripts? If you plan to do much work in this area, would it be a good idea to have a dedicated machine to offload processing onto? You can hire cloud machines for this purpose, if you do not wish to buy one. If you hire a machine, you can bill based on the hourly cost to you, plus a sum that you think is fair for the effort involved, and taking competitor's rates into account.– halferCommented Jul 21, 2015 at 20:34
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1 Answer
A way to do it, is to estimate the value of the CPU processing time against your gross margin on a regular (monthly/yearly) basis, versus a previous period (month/year).
Example:
Last month you've made $10.000.
You have 10 CPUs. 5 of them account for 125 hours of CPU processing time/month.
You've estimated that the CPUs processing time contribute to your monthly profit with $5.000
$10.000 (total profit) - $5.000 (profit from your CPUs) = $5.000
$5000 / 125 (hours of CPU processing time) = $40/hour
You bill your clients with additional $40 for every hour of CPU processing time
