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What's a good overhead to add to my invoice?

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Posted by: from Brantford
3/19/2016 at 8:27:17 PM

Just curious when I'm invoicing. I have a job right now doing a landscaping project for $3145.86. The total material cost is $1722+tax with a $100 delivery fee and my labour for the project is $1100.

What I'm wondering is how would I include overhead to something like this? I've been reading lot's online but have mixed opinions Would I just add another 10% to the overall job total of $3145.86 and what would I put on the invoice - just a line that says overhead cost, business expense or something?

REPLIES (6)
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Date/Time3/20/2016 at 8:21:06 AM

Just ad 15% to your invoice amount to the $3145.86. Overhead is much more than 10%.

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Mark from EX-Men Renovators in Amherst
Date/Time3/20/2016 at 9:12:28 AM

What other overhead do you expect to incur? On most jobs u should put 10% in for waste or material, never labour.

Hope this helps.

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Jason in Brantford
Date/Time3/20/2016 at 9:44:03 AM

Overhead cost I expect to incur are my insurance, vehicle expenses, tools, things like that so 15 percent would be good to add to the final total of the invoice?

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Date/Time3/20/2016 at 12:01:40 PM

You can add %10 -%15 to your total labor and materials costs. You just invoice the scope of work adding this % to the total without going in more details in the invoice.

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Jason in Brantford
Date/Time3/20/2016 at 8:54:42 PM

Ok awesome so add say 15% to the total of $3145.86 which will put the total to $3617.74. Which means I earn an additional $471.88 to split into my overhead and profit accounts, I then also take 20% of my earnings of $1100 to cover taxes at the end of the year for cpp and provincial tax.

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Dave from 360renos in Navan
Date/Time3/21/2016 at 7:00:35 PM

Hi Jason,

Do some reading of Michael Stones book Mark up and Profit to help you understand your business numbers. Although American publication it still applies to the Canadian market.

Another good resource - Re-modelers Advantage. American again but good solid advice

http://www.remodelersadvantage.com/

You've got to know your TOTAL overhead numbers. Because you need to know what kind of mark up is required to ensure that those costs are covered and paid for. Also you need to have a profit so what kind of mark up do you want to ensure there is money to grow and expand your business or buy tools, etc?

If you don't understand mark up; then you got some home work and reading to do. Adding 15% will NOT give you 15% profit

Good luck.

Dave

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