The Overhead Formula Every Contractor Needs to Know

🔗 ⁠https://www.foundationacs.com⁠ Hey, Profit Hackers, Jeremy Lott here with Foundation Accounting and Consulting. In this episode, we’re breaking down overhead, what it really is, how to calculate it, and why most contractors underestimate it. Overhead isn’t just your rent or insurance. It’s every hidden cost that keeps your business running, and if you don’t track it properly, it can quietly eat away your profits. I’ll explain how to identify your true overhead percentage, how to separate direct and indirect costs, and how to adjust your bids so you’re covering everything without overcharging clients. By the end of this episode, you’ll know exactly how to make overhead work for you, not against you, and why understanding it is one of the most important steps toward running a truly profitable company. 00:00 – Intro: What overhead really means for contractors 01:25 – The hidden costs most owners miss 04:00 – Breaking down direct vs. indirect costs 06:40 – How to calculate your real overhead percentage 09:15 – Why tracking overhead monthly matters 11:40 – Using overhead data to improve bids 14:10 – How to reduce unnecessary overhead expenses 17:05 – The link between overhead and cash flow 19:20 – Final thoughts: control your costs, control your profit 💬 Question for you: What’s one overhead cost in your business that always surprises you?