I have to disagree with handy on this. Charging by the job has a risk.
Another Anthracite Real-Life Example so you all can be bored as story time with Aunt Una unfolds…
This happened to us last year.
Example - a client wants you to install Windows NT on a network to act as a server. You specify that for the princely sum of $5,000, including all expenses, you will come and install NT on a single computer, and get it working as a server. Simple, right? $5,000 should be able to cover anything?
Ah, but when you get to the site, you discover that the machine has a special SCSII controller that for some reason does not let you install NT - the boot floppy will not recognize it. So you start to browse the web, and make calls, and after 1 day you have nothing done.
At even $65 per hour, no multiplier, you are now at $520. No problem.
The next day, you get tech support online. They tell you they charge $100 per hour to handle questions. You are on for 3 hours, and nothing gets accomplished. You spend the rest of the day trying to make the SCSII card work, but no dice. So you tell the client you want to buy and try a different SCSII card. They insist that it’s not their fault, they have an identical machine in their office two towns over that works - what’s your problem? Aren’t you qualified?
So you buy a new top-of-the-line SCSII card for $300. It will come tomorrow.
Third day - SCSII card arrives after lunch, you plug it in. NT recognizes it, and starts instlling, but crashes with a Blue Screen of Death when trying to boot for the first time. You have no idea why. Third day is gone.
Fourth day, after spending all night in tech forums, you have a plan. You swap memory you bring from home. Re-install. Nothing. You start removing hardware, one by one, until it will install. Upon removing the network card, it works! Yeah! The network card is a strange brand, that for some reason only works on Win95 and Win98, NOT NT. No one knows why. Doesn’t matter, you buy a 3-Com Etherlink for $15 and re-install NT.
Fifth day - three problems. First, the video card looks “funny”. It works in 1280x1024, but leaves streaks on the screen sometimes. You don’t think it’s a big deal, but the client absolutely has kittens when he sees it. So, you spend another half hour finding and installing a new video driver. It works. Cool!
Next problem - the machine cannot get an IP address from the DHCP server. Why? Because although there is a twisted pair cable in the office, it is not connected to the hub! So you wait the rest of the day for the “official” phone/network guy to waddle up and plug one cable into one hub. You could have done it in 5 seconds, but the client has “security measures” on their network closet.
The first week is now over. You have spent 40 hours at $65 an hour, or $2600. You bought a new SCSII card for $300, and spent $300 on phone support that did no good. You are also out a $15 network card. At $3215 spent, you still might make it under budget. But you have much more software to install…
Note that I changed numbers and scaled them. IRL, the job was supposed to be $10,000 including plane fare, and it ended up costing about $12,000 (3 trips to CA from Kansas).
Of course too, if you wrote the contract such that any additional hardware and phone support required was paid for by the client, you would have done a bit better in this situation. A good thing to remember, especially if YOU do not spec the equipment yourself.