Overhead costs can erode our profits if we are not using the correct markups.
- We are closing out 2016
- Time to start reviewing our year
- We need to take a look at how we did
- A key area to review is our overhead
- Overhead and administrative costs can be a silent killer
- Most contractors price overhead as a percentage of costs
- Often times we calculate our overhead as a function of revenue
- This is a common mistake that can cost you – make sure you are comparing the right numbers
- Another common mistake is not calculating overhead properly or regularly to adjust markups
- Review your overhead in detail
- Don’t just rely on your Profit / Loss statement – dig into the details and verify
- Double check your markup percentages – will your markup give you enough money to cover overhead
- Create your new budget for 2017 and compare to projected revenues to adjust markups