PRICING OVERHEAD INTO YOUR BIDS.
Overhead is the cost of running your business that no single job carries, which covers office staff, rent, insurance, equipment payments, vehicles, and software. It has to be recovered through your bids, which means the rate in your bid template has to match the rate the business is running at. When it doesn't, the difference comes out of gross margin on every job you win.
The error compounds. An overhead rate set three years ago and never rechecked is wrong by the sum of everything hired, bought, and subscribed to since, and every job priced off it gives away that difference for the full duration of the job. Nobody notices in the month it happens, because the job still looks like it made money at the gross line. It surfaces at year end, as a net profit number that doesn't match how busy the year felt.
WHAT IT MEANS.
Overhead is the cost of running your business that no single job carries: office staff, rent, insurance, equipment payments, vehicles, and software, all of which have to be recovered through your bids.
WHERE THE RATE GOES WRONG.
Your overhead rate in bids is lower than your actual overhead rate
If you're using 10% overhead in bids and your actual overhead runs 16% of revenue, you're subsidizing 6% of every bid out of gross margin. On $5M of revenue that's $300,000 of overhead you're absorbing annually that should have been billed to clients. The distance between bid overhead and actual overhead is one of the most common and most expensive margin leaks in construction.
You're using a flat percentage without calculating the real number
Most subcontractors use the same overhead percentage they've always used, because it felt right at some point, or because that's what the old estimator set up, or because everyone in the trade uses a similar number. Whether that number reflects your overhead today is rarely verified, and verifying it takes about twenty minutes.
Overhead grows without your bids catching up
You added an office manager. A new truck. A software subscription. Each addition felt justified on its own. Together they pushed your overhead rate from 12% to 17% over three years, and your bid template still shows 12%. Every job you've won since then has subsidized the difference.
WHAT IT LOOKS LIKE IN DOLLARS.
Using 10% overhead in bids while actual overhead runs 16% of revenue means subsidizing 6% of every bid out of gross margin. On $5M of revenue that's $300,000 a year absorbed by the business rather than billed to clients.
An office manager, a truck, and a software subscription added over three years took the overhead rate from 12% to 17% while the bid template stayed at 12%. Each hire and each purchase was justified on its own. None of them made it into the rate.
THE RATE, CHECKED MONTHLY.
Add up every expense that isn't a direct job cost for the trailing 12 months: office staff, rent, insurance, equipment payments not allocated to jobs, vehicles, software, marketing, and owner draws above field wages. Divide by total revenue for the same period. That percentage is your actual overhead rate. Compare it to what you're using in bids, and if they're more than 2 to 3% apart, your bids are wrong.
The first method is percentage of direct cost: multiply your overhead rate by total direct job cost and add the result to the bid. It's simple and it matches how most estimating software works. The second is percentage of revenue: build overhead into your target margin so the bid price, after direct costs, generates enough gross profit to cover overhead plus target net profit. Both work when used consistently. The problem is switching between them without realizing it.
SPM calculates your actual overhead rate monthly for all clients and tracks whether it's moving up or down relative to revenue. When the rate changes materially it goes on the monthly meeting agenda, so bid overhead gets updated before you price another 30 jobs at the wrong rate. Overhead rate in ControlQore is a managed number rather than an annual calculation.
FLAT MONTHLY FEE. NO SURPRISES.
Three tiers, priced by your trailing twelve month revenue. Which one you're in depends on how much of the work you want off your desk. No hourly billing, no payroll, and no add-ons.
| Last 12 months revenue | Monthly fee |
|---|---|
| Up to $1M | $1,900 to $2,900 |
| $1M to $3.5M | $2,600 to $3,900 |
| $3.5M to $6.5M | $3,800 to $5,700 |
| $6.5M to $9.5M | $5,100 to $7,100 |
| $9.5M to $12.5M | $6,100 to $8,500 |
| $12.5M to $15.5M | $7,400 to $11,000 |
| $15.5M to $18.5M | $9,400 to $13,500 |
| $18.5M+ | Quoted individually |
Range reflects the three tiers below. Which one you're in depends on how much of the work you want off your desk. No payroll. No hidden line items.
You stop guessing.
You get the CFO work. Job costing built against the way you estimate, a 13 week cash forecast, monthly WIP, and a meeting every month that ends in decisions rather than a report.
Your bookkeeper keeps doing the books.
You stop touching the books.
Everything in Core, and we run the bookkeeping and the controllership as well. Nobody in your office is answering coding questions or chasing a reconciliation at month end.
We do the books. No payroll.
Every job shows its margin while it's still running.
Everything in Executive, plus the job costing and WIP platform set up, loaded with your cost codes, and managed for you every month. You never have to learn it.
We do the job costing.
FREQUENTLY ASKED.
