Percentage of O & P to add to a bid.
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Percentage of profit would be whatever you want it to be, or can get away with.
The percentage of overhead would be exactly that, whatever your overhead is. If you don't know what your overhead is, you can't logically add a percent to cover something that you don't know the number of.
The percentage of overhead would be exactly that, whatever your overhead is. If you don't know what your overhead is, you can't logically add a percent to cover something that you don't know the number of.
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1,390 Posts
O&H is unique to each business, based on your numbers and your goals. As PWG said, it isn't logical to ask others what to add. Either you know your numbers or your don't. If you do, you wouldn't ask the question. Since you did, you better learn your numbers yesterday, or tomorrow you won't be around to ask what went wrong.
Brian Phillips
Brian Phillips
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30,726 Posts
hmmm, "LeeCoburn" ??? I always thought they looked alike - Lee Marvin & James Coburn
I don't got much to add. Just saw the thread and thought I could advise, but PWG and Brian already said what we all know to be true.
If you don't know your numbers yet, start by sharpening your pencil and figuring out all those costs that incur just by running a business. Vehicle expenses, office help (that's YOU if you are a one man shop), phone, insurance, equipment wear and tear, and so on. I have to assume that you are just getting going in the business and don't have these numbers built up for a long period, so all you can do now is take an educated guess.
But as you progress down this path and save all those figures, you can come up with an intelligent determination. And don't worry, you will always be fine tuning.
good luck
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36 Posts
overhead costs
Lee--here's a rudimentary formula. It's quick and dirty, but it's better than nothing.
Take a piece of paper and write down all the monthly payments that you think should be included in your overhead--the business-related payments you have to make whether you work or not. Including insurance, payment on the work van if it is for business only, etc.
Divide the monthly payments by 20 workdays (If that's how many days you work in a month). You can charge the customer that rate for every day you think you'll be on the job.
Some people think 7 percent is a reasonable profit to take home. I find that I usually make less than I intend to, so I add more profit and hope to end up with a reasonable amount.
Lee--here's a rudimentary formula. It's quick and dirty, but it's better than nothing.
Take a piece of paper and write down all the monthly payments that you think should be included in your overhead--the business-related payments you have to make whether you work or not. Including insurance, payment on the work van if it is for business only, etc.
Divide the monthly payments by 20 workdays (If that's how many days you work in a month). You can charge the customer that rate for every day you think you'll be on the job.
Some people think 7 percent is a reasonable profit to take home. I find that I usually make less than I intend to, so I add more profit and hope to end up with a reasonable amount.
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14,407 Posts
Add 55% to what?
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Their you go Scott. With such a broad question, I was really just being a:jester:
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14,407 Posts
Thats kinda what I thought. And I agree with the broadness of it.
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