Calculate and Understand Your Overhead

according to their spec bill didn't mention something like this so if you guys have a chance to talk to him about overhead I want to hit this this is a business killer all right your overhead will kill you they kill you okay this will kill you you guys if you don't know what your overhead is this is that magic mystery number where you go where did all my money go all year long I know how much I paid my guys I know how much my materials cost me and I hold the government how much money I don't even have that much in my bank account that happens to guys and it's all because of that one thing called overhead there's a number of different ways to calculate your overhead and you need to dive deep on it but one of the simplest things that I found consistently time and time again no matter what I'm doing is lines it's a blue-collar trade I found that my overhead is $100 per man per day okay just overhead so if I run a 10-man crew all right I'm gonna paint you a picture what that actually looks like if I'm running ten men I know that my overhead not my wages my overhead is gonna cost me about a thousand dollars per day really a rough number okay you guys need to actually calculate your overhead for yourselves but I want to start to just put what this means into your business that means if you work five days your business lost $5,000 if you didn't allocate enough overhead into your jobs to cover that extra $5,000 this is the business killer and it's tough because nobody likes doing it but the easiest way to start to understand overhead it's the - take how much money you did last year okay take out how many hours you worked how much you paid your guys how much you paid for materials take that as a second separate category and then the remaining balance can be then started to allocate towards overhead and you divide by the number of days you work then there's a number of different ways to really come up with those good numbers but if you haven't done anything with overhead to this point please just do that it's gonna take you 30 minutes tonight it's gonna take you 30 minutes and that's gonna start to put in perspective like when you work one extra day on a job why that job costs you money instead of you making money okay go for it Keith no let's walk through it though you guys write down the formula you take what you made last year and fill will you clarify this for these guys so you can separate out you can pull up profit and loss statement and you can separate out…