Getting practice at estimating the costs of doing a project is deeply valuable. We need to be good at this if we expect to make a living through freelancing (an increasingly common means of livelihood in these transition times).
Think of costs in stages and not too far into the future – the best is to figure out your ongoing ‘burn rate’ (both fixed and variable costs) and see how that intersects with any expected revenue that will flow back to you.
When the burn rate (outflow) matches the revenue in-flow you have broken-even. That’s a great place to get to just as soon as you can.
Some classic (very approximate) cost structures (you are not constrained to these): –
Professional services = 1/3 billable time (including time you might buy in from sub-contractors), 1/3 overheads and unbillable expenses, 1/3 margin (to cover unbillable hours, reinvestment, taxes, vacations …)
Making things = 1/4 materials, 1/4 labor, 1/4 overheads. 1/4 margin.
Teaching things = 1/2 teaching hours and 1/4 preparations and 1/4 admin and margin.
Selling things = cost of thing to you plus between 30 to 300%