Overhead and break-even

Overhead is what it costs to run the business whether or not you're on a job: the shop, trucks, insurance, phones, software, advertising, office help.

Divide yearly overhead by what you expect to bill. If overhead is $120,000 and you bill $600,000, overhead is 20% of every dollar. A job has to keep at least 20% after its own costs just to break even. That's where your minimum margin starts, and your target margin adds profit on top.

Bigger jobs don't escape this: a $100,000 commercial job at a 15% margin, with 20% overhead, loses $5,000.