What is a reasonable mark up?

  skeletal 19:16 06 Dec 07
Locked

Suppose Bloggs Consultants has on its payroll, Mr.Geek a brilliant programmer. Fat inc. approach Bloggs Consultants and asks for Mr. Geek for a year to work on a project. Bloggs Consultants charges Fat inc. £750 per day for Mr. Geek’s services.

What is a fair rate of pay for Mr. Geek?

I’m particularly interested to hear the views of anyone in this area of business.

Skeletal

  Quickbeam 19:28 06 Dec 07

Are you Mr Geek...? :)

  Quickbeam 19:31 06 Dec 07

If Mr Geek is employed by Fat inc., he may have to do it for the same pay plus any extra expenses.

  Quickbeam 19:34 06 Dec 07

Employed by Bloggs correction.

  Totally-braindead 19:41 06 Dec 07

It really depends doesn't it. If Mr Geek is working all the time then its only reasonable for him to expect a fair part of the £750 per day. If on the other hand he may work for a year on something and then not work for another few months and still gets his pay then that has to be taken into account.

A friend of mine was in a fairly similar position, he got paid say £30,000 a year and the company would hire him out to others and maybe charged £500 a day but sometimes he wasn't working and he still got paid. These figures as guesses by the way as I've never asked him what he got.

He went self employed after a year of this and charged £500 a day. He'd work for maybe 2 weeks full time and get £5,000 but then might not work for another couple of months.

At the end of the years he got more money than if he'd stayed on the £30,000 a year but he found there was a lot of hassle and he had no security.

After a few years he quit and now works with the oil industry. Not sure what he gets but its a lot.

  VoG II 19:43 06 Dec 07

The company that I work for charge us out at variable rates depending on the customer, the type of work and what we think the market will bear. For example a routine service for a Government department would be charged at our 'standard' rate whereas expert witness work would be charged at a 'premium' rate - 50% or more higher than the 'standard rate. More often than not I decide what I should be charged out at. But, apart from annual pay reviews, my salary remains constant irrespective of my charge-out rate.

  Quickbeam 19:44 06 Dec 07

If I was Mr Geek, I'd start the project, make sure I was indispensable to finish it, then after a couple of months have unspecified stress that required time of work.

Then resume work with the highest bidder. Unethical yes... but it happens all the time.

  skeletal 20:01 06 Dec 07

Some interesting replies, and yes I do realise that Mr Geek could get a salary even if he was not employed out to Fat inc. However, Mr Geek is never short of work, and indeed gets work for Bloggs.

And the lower security should be compensated for by a higher salary.

I could not possibly comment on whether I am Mr.Geek, and the figures are illustrative only, but could be similar to a real life situation.

But I am still interested in what may be a reasonable rate for Bloggs to Pay Mr. Geek. Would you say £50 a day reasonable? £100?

Skeletal

  laurie53 20:13 06 Dec 07

I once worked freelance for a company that paid me £300 a day plus expenses. The client probably paid paid up to five times that!

  interzone55 20:32 06 Dec 07

I charge out my installation engineer at £480 a day or £240 for half a day.

Last year I was working at a company as part of a team introducing a new warehouse management system. The company who wrote the WMS system charged their programmers at £500 a day for work at the office, if they had to come to site we were charged £800 a day, the project manager cost us £1000 a day, and the day we had to bring the database analyst in to work out why our existing CRM system wouldn't talk to the WHS we were charged £1500.

At least Dick Turpin wore a mask...

  Jak_1 20:38 06 Dec 07

It will depend upon what employment contract Mr Geek has with Bloggs Consultants as regards salary! The amount that Bloggs Consultants charge Fat inc is irrelevent to the pay at Mr Geek gets, however there is nothing to stop Mr Geek from enquiring whether a bonus may be forthcoming for a job well done!

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