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  • Writer's pictureJoel White

100 Thoughts on Pricing: #2

Calculating cost rates against your total direct cost basis works well for mature businesses with steady growth. For earlier stage companies however- especially those not yet profitable- such an approach overburdens current direct staff with the "growth overhead" you've hired or bought to scale the business for years to come. Instead, calculate cost rates on an incremental cost basis, estimating what cost of sales the business will incur as a result of winning new projects- and only those costs.



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