Hi I have just started a new business, and am quite new to computers. I.e.
spread sheets and data bases.
Every new customer gives me an order, and then I work out the prices. So I
need to store this information as I go along as it would take to long to
price up every product and service that I provide, as every customers request
will differ and in the pricing.
I need to build a set price list for my products, and a sample price list
for the service that I provided to previous customers, to give an idea to
future customers of what they get in a selected price range.
What would be the best way and easiest to do this
Thanks

jo, Your seemingly simple question takes us into some pretty deep water.
Especially with your novice level knowledge of spreadsheets and databases.

Excel can be an excellent tool in your search for consistent answers and
pricing. You obviously have a method for determining the price for both your
products and services. Be consistent in the method. You have no doubt set
that down on paper somewhere, even if you haven't written the method in words
or formalized it, it is there in the calculations you've already made. The
job now is to take those formulas and turn them into some formulas on an
Excel spreadsheet.

One of the strongest recommendations I can make is for you to grab a copy of
Excel for Dummies - any version on the shelves today should work just fine,
at least for any version of Excel up through XP. The user interface in 2007
is quite a bit different, so there would be problems picking up a copy
targeting Excel 2007 if you have an earlier version. The book will give you
good, low-level, plain language explanations of all the basic things in Excel
and can be a good self-help guide.

In the meantime lets look at how you might set up a single row in Excel to
price out a service. There are many things that go into pricing a service -
not just the salary of the person performing the service, but the cost of all
the things that provide the working environment for that person. To make
sure you stay in business, you have to cover all of your costs - insurance
and other fringe benefit costs, rent, services you use such as billing or
payroll processing. You may want to group these items into one hugh lump sum
and figuring how much of your expenses they consume, or you may want to split
them into groups such as fringe benefit costs, overhead costs, and general
administrative costs. That's because these groups of costs each have varying
impact on costs and each group will vary over time differently.

You won't be able to accurately come up with values for those costs, but you
can make an estimate until you have enough information over a period of time
to make a closer calculation of them. Generally you'd come up with their
cost by totalling their cost of a period of time, totalling your gross income
over that same period of time and figuring out how much of your total income
each group costs you, as a percentage: cost as percentage = item cost/gross
income.

Let's use some imaginary numbers, and presume you've broken your added costs
into groups that include
Fringe Benefits: 14%
Overhead (rent, supplies, tools, etc): 6%
General administrative (time you spend preparing bills/bids): 7%

You have someone who 'costs' you $20/hour for their salary, you need to know
how much to charge for their services. All of your employees, whether it's
just you or a staff of a thousand will have the same added costs factor, so
the only thing that would change on each row would be their salary amount.
You could set up a worksheet similar to this:
Cell A1, just put in .14 (the 14% as a decimal number)
In B1, just put in .06 (6% as a decimal)
In C1, .07, again 7% as a decimal.
In D1, put the amount of profit you'd like to make. Lets say you want a 20%
profit, so put .2 in D1.

Some costs are based on salary only, some on other costs along the way. The
method I will show below is a generally accepted method of calculating an
invoicing rate based on such cost breakdowns.

We could use row two as a row for titles of the columns
A2, Employee - and put your employee names/IDs below this in column A
B2, Hourly,
C2, Fringe
D2, Overhead
E2, Admin
F2, Profit
G2, Billing Cost

Cell address | what to put in that cell | comment
A3 Employee ID
B3 20
C3 =B3+(B3 * $A$1)
D3 =C3+(C3 * $B$1)
E3 =D3+(D3 * $C$1)
F3 =E3 * $D$1
G3 =E3+F3
And there you have a very general method of calculating a billable rate for
a service or even a selling price based on cost of an item; just substitute
the unit cost for the salary, and remove the calculation for fringe benefits
in C3 - C3 would be the same as B3 for a product, since products don't get
fringe benefits. Products will have different overhead cost associated with
them - storage space, insurance on the facility/contents, etc, and the
administrative costs would be almost nothing although they do need to
consider the time to process orders, receiving, inventory management and
payment processing for the products.

The way I set up the formulas in row 3, you can 'fill' them down the sheet
without having to write them all over again. Look at Excel Help for 'fill
data in worksheet cells' for help on how to do that.

Good luck with your new business.

JLatham
email: HelpFrom @ JLathamsite.com (remove spaces)

"jo" wrote:

Hi I have just started a new business, and am quite new to computers. I.e.
spread sheets and data bases.
Every new customer gives me an order, and then I work out the prices. So I
need to store this information as I go along as it would take to long to
price up every product and service that I provide, as every customers request
will differ and in the pricing.
I need to build a set price list for my products, and a sample price list
for the service that I provided to previous customers, to give an idea to
future customers of what they get in a selected price range.
What would be the best way and easiest to do this
Thanks