Virgil,
Overhead is "the cost of doing business."
Your telephone is free?
Post office delivers your mail for free?
You carry no insurance?
No licensing fees? (I know better)
Do you pay an accountant?
Those free estimates aren't really free, the time spent is a part of overhead.
I could go on, but you should be getting the picture.
I've been known to charge for tools. Yours never wear out or get broken? I rarely need my conduit threader but someone has to pay for it & it won't be me.
If you're legit, you've got overhead. If you're a wood butcher working for cash (Virgil's competition), you don't.
Most contractors in North Central WV use a 25% markup (minimum) & this means only a 5 to 7% profit on the material. Think about that, you bust one fitting at 5% profit, that means you have to sell 20 more just to pay for it.
If you can find it, "Small Time Operator" is one of the best books I've ever seen about running a small business. Check your library. It is an eye opener.
Tom
[This message has been edited by Tom (edited 07-13-2001).]
