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?
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?
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.
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
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
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