Tracking and correcting overhead is just as important as job productivity.

 

  1. Common miscalculations
    1. Using a standard overhead markup and not checking it
    2. Not allowing for fluctuations in sales
    3. Not checking and tracking overhead
  2. The best way
    1. If it’s job-related it should be part of your cost of goods sold (COG)
    2. Set your rates based on real historical data
    3. Try to cover your overhead in 9 to 10 months
      1. If you overhead is $500K and you do $5M in sales our overhead is 10%
      2. Your markup should be 12% to cover the $500K in 10 months
  3. Track and adjust just like productivity
    1. Track your billings and earnings for each month
    2. If you are falling behind make adjustments
    3. Trim you overhead, increase productivity or get more sales
      1. Just watch lower numbers too much for the sales
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