Hi!
We charge customers for the consultant’s time spent on preparing and closing the engagement. For the administrative tasks like scheduling the engagement, etc. we charge a 5% administration fee. Usually our travel is less than one hour (one way). We typically do not charge for that time. If we have significant travel, we typically charge half of the travel time.

Regards,

Maxim

For small engagements we assign an overhead of 50% of the technical resource time to cover all project management type activities together with dealing with the activities you list below. By small engagements I mean 5-10 days typically, but this also scales to a 20 day engagement.

In addition I built an activity based costing calculator by analyzing major project activities, working out a cost for delivering each of those activities and then multiplying by the number of activities and incorporating an ‘economy of scale factor’. If you are interested, contact me directly, and I can send a copy.

You also need to consider some fixed costs which you have not mentioned below and which you may want to absorb into your price. These costs include energy bills, office admin and general marketing type activity. Typically this is done by building it in to your day rate. This is something to keep in mind if you start to discount your day rates. Note, I’d recommend detailing specific cost-of-sale costs for each deal and recovering this through your project pricing.

As mentioned by other posts on this topic, you do need to model and make sure this overhead is being accounted for. It is difficult to charge billable hours specific to this type of administrative overhead, we instead try to make this up with higher rates for the shorter term engagements. Fixed price package of a few days ‘quickstart’ can also bundle in the overhead and is another approach.
The 5% administrative fee someone mentioned on another post is interesting. I’d be interested to know if folks have other ideas.

David M.

Here are the reported utilization statistics from our “New PS Maturity Model” benchmark -
http://www.spiresearch.com/PP_SPIAdexta2008PSMM.htm

68% billable utilization
11% non-billable project time (this represents “free” customer fix work and customer satisfaction hours + non-billable project administrative time)
8% Vacation/Holiday
7% Administrative
4% Education and Training
2% Research and Development
You should try to capture and bill as much project administration time as you can.  Certainly reviewing requirements, customer specific research, project notes and project updates are all billable.  It is hard to bill for travel time and travel arrangement time, especially for short projects but all costs to run your business should be reflected in your bill rate.  In general, to make an acceptable margin you should be billing 2X your fully loaded cost per person. 

I hope this helps.

Jeanne