What it costs — and how that number is arrived at

Engagements are priced against what the workflow costs you today, measured on site with your people. Because that number is different at every company, a price list would be wrong in both directions — so instead we publish the arithmetic. Run it yourself. If the number comes out small, do not hire anyone.

Step 1 — What the workflow costs you today

Prefer to have this computed for you? The workflow cost calculator runs the same three lines on your numbers and shows the total as you type.

Three lines. Do them in this order, because the third is the one nobody has counted.

A. Labour

   people doing it            ____
 × hours per week each        ____
 × loaded hourly rate         ____   ← salary × ~1.3 for burden. Ask your controller.
 × 52
 = annual labour cost         ____

Use the loaded rate, not the salary rate. Payroll taxes, benefits, equipment and overhead are real costs of that hour. Most owners use the salary number and undercount by about a third.

B. Rework

   incidents per month        ____
 × hours to fix each          ____
 × loaded hourly rate         ____
 × 12
 = annual rework cost         ____

“Incidents” means anything done twice: a re-quote, a corrected invoice, a re-dispatched truck, an order entered wrong. If nobody tracks these, that is itself a finding — ask three people for last month’s and you will get within range fast.

C. Leakage — the expensive one

The costs that never appear on a P&L line because they are absences:

Leakage is usually the biggest of the three and the hardest to get, because there is no report for it. Get what you can and mark it conservative — an under-counted leakage number is still an honest one.

ANNUAL COST OF THE WORKFLOW = A + B + C

Step 2 — What can honestly be removed

Not all of it. Anyone who says all of it is selling.

   annual cost of workflow   ____
 × realistic % removed       ____   ← be conservative. If unsure, use 50%.
 = ANNUAL VALUE              ____

That percentage goes in the scope document in writing. It is what the engagement gets judged against, which is exactly why it should not be inflated to justify a price.

Step 3 — A worked example

A 180-person contractor. The workflow: quote-to-invoice — the handoff between the estimator, the field, and the office.

A  2 admins × 15 hrs/wk × $38 loaded × 52         = $59,280
B  9 rework incidents/mo × 2.5 hrs × $38 × 12     = $10,260
C  observed: quotes lost to slow response,
   plus jobs priced off stale numbers             = $70,000
                                                   ---------
   ANNUAL COST OF THE WORKFLOW                     = $139,540

   × 70% realistically removable
   ANNUAL VALUE                                    =  $97,678

That is a company where the arithmetic clearly supports an engagement. The same worksheet at a 30-person firm often comes out under $75,000 — and at that point the honest advice is to buy a tool and keep your money. We would rather tell you that in week four than take the work.

Step 4 — Where the price comes from

The engagement is priced as a proportion of that annual value: a deployment fee for the build, and an ongoing fee for operating it. Both are quoted per engagement, against your measured number, and never before the measurement exists.

That is not evasion, it is the actual mechanism. A price quoted before Step 1 is a guess dressed up as a number, and you should treat any vendor who gives you one accordingly.

Step 5 — Compare it to your real alternative

The comparison that matters is not against agency rates. It is against what you would otherwise do:

That last row is the one people skip. Doing nothing is not free; it is the most expensive option on the list and it is the one most companies choose by default.

Why we will not put a number on this page

Three reasons, and only the first is about you:

  1. It would be wrong. The same workflow at two companies produces genuinely different numbers.
  2. It would anchor the conversation on our cost instead of yours — which is the wrong way round.
  3. We would end up defending a price instead of a measurement, and the measurement is the part that is actually worth something to you.

If you want the number, the first conversation is the measurement. It is free, and you keep it.

Start with the measurement →

How an engagement runs · Hire one or buy an engagement · Forward deployed engineer vs consultant


Get in touch

Email solutions@ikonic303.dev to start with the measurement. ikonic303 is based in Colorado and works with clients nationwide.

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