Do You Know Your True Overhead Costs?
At its elemental level, overhead is the money you would have to pay to keep your business operating when you had no one working in the field. It includes everything except material, labor and job expenses. Office expenses, salaries, sales expenses, office equipment, vehicles and similar expenses are considered to be overhead.
For electrical contractors, overhead generally runs at between 13% and 20% of total sales. The smallest contractors generally have the highest percentages of overhead, and very large contractors have the lowest percentages. Remember, however, that these are averages, and any particular company may have higher or lower percentages, depending upon what types of work they do, their methods of doing business and their activities for a specific accounting period.
Your overhead should be the minimum necessary to keep your people in the field working at maximum efficiency. There is no certain “correct” percentage.
If the answer to this questions is "No”, you could be losing a lot of money.
Many of our customers started out as field technicians who made the life changing decision to start their own contracting company. Starting a business for the first time is not an easy task. You have to make the commitment to become a business person.
TurboBid is rated the #1 estimating software solution because we include the tools that are needed to help you run your contracting business the right way.
TurboBid’s "Wizards” present you with a sequence of steps that lead you through the process of identifying and accounting for the costs associated with labor burden costs, your company overhead costs, and setting up your copy of TurboBid.
What's important to understand that these costs are in a state of continual flux and need to be updated regularly. By simply updating the wizards, your estimates will always be accurate.
The Overhead Wizard walks you through all of the steps required to accurately calculate your company's overhead costs. As costs change, simply change the values in the wizard and your estimates will automatically reflect the new values.
This video represents TurboBid's Overhead Wizard. Click the Play button and explore the wizard by clicking on the red outlined buttons or symbols.