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#157943 - 02/26/06 07:07 PM Overhead Per Hour  
Tiger  Offline
Joined: May 2005
Posts: 706
Crystal Lake, IL USA
I've figured out my overhead, but have a problem figuring it into my rate.

The problem is that my invoiced hours vary between 1,000 and 1,500 hours per year. While I'm trying to build business, my advertising expenses (and overhead) are increasing.

Any suggestions from the experienced would be greatly appreciated.


Business, Office, Estimating, Legal:

#157944 - 02/26/06 08:43 PM Re: Overhead Per Hour  
wilkie  Offline
Joined: Apr 2005
Posts: 39
South Carolina
I use numbers cruncher for this. Its not an easy calculation that you can find on a web site. The short ones will get you close though. Numbers cruncher cost me $300 I think, which in turn was figured into our overhead.

#157945 - 02/27/06 09:13 PM Re: Overhead Per Hour  
Active 1  Offline
Joined: Feb 2003
Posts: 687
Grayslake IL, USA
Hey Dave,

It sounds like you need to create your budget for the year. I went back over the last few years year end statement to get the expence totals. Then I figured the average change (mostly increase). I multiplied that change by last years number. Then I adjusted for expences that are no longer. I adjusted for expences that I plan to spend much more than the past. Added them up plus my income & co. proffit. I added 10% of my material cost to cover waist and unbilled. I had my number. Devided by 12 months, 52 weeks, then the week by 5 days. Now I know how much I need per year, month, and day.

I devided my day OH by 4,6, & 8. Now I use those numbers for bidding the job depending on the efficency I estimate.

For an example I will use $800 per day OH with 2 workers.

If it's a project we are there a number of days all day I will use my 8 hour number which works out to $50/hr each person.

A 6 hour job I will try to get $75 each/hr. With drive time and haveing to get the job done that day normally kills the day.

A 1/2 day job with no other work I need $100/hr each.

In the end I still need the $800 per day minimum.

I'm strugeling like many others to make a living so take it at your own risk.


#157946 - 03/01/06 08:33 AM Re: Overhead Per Hour  
Tiger  Offline
Joined: May 2005
Posts: 706
Crystal Lake, IL USA
That's a creative solution to the problem Tom. I've always thought it would be great to get $10,000 per hour & just work a few hours a year.

I've always thought that it would be great to have 4 or 5 techs with a part-timer. You keep the techs working full-time and the part-timer's schedule fluctuates with the extra. It gets slow & the part-timer stays home. It gets busy & the part-timer works overtime.

Unfortunately, I think the reality is that when it gets slow you have trouble making payroll & you're tempted to low-bid to keep the techs busy, which creates a downward spiral.

I have my budget figured very well, and the business is growing steadily, so I guess I'll relax about the invoiced hours. I'm having a super first quarter & if it keeps up this way the invoiced hours will be over 1500 hours.


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