You need to make a minimum of 50% gross margin in services. This means if the team members make 50/hour, then you need to charge at least 100/hour. One way arou

You need to make a minimum of 50% gross margin in services. This means if the team members make 50/hour, then you need to charge at least 100/hour. One way around this is to do fixed fee projects, but this is risky without strong processes. Also the danger zone is around 3-5 people because you dont quite make enough to hire one full time overhead person but you need half of one. Once you get to 8 or so it gets a lot easier because you can afford some overhead. Also cash will always be a problem because if your profit margin is only around 10% you will continually be short of cash as you try to grow.