When you bid for a project, do you know what the “truer” cost is to provide that job or service?
Let’s start at the beginning… there are some basic expenses that are easily tied to your project estimate ie, cost of goods or services sold, materials, costs of permits. Let’s say you bid for a particular job, you got it and completed the job as per your estimate.
Now you are reading your profit and loss report. First section ties just right to what the margin you expected to bring. But wait, as you glance further down the story changes. Are you profitable still?
Here comes the overhead section which paints a different picture. A number of these expenses could and should be part of your Job Costs. Expenditures used on the jobs such as vehicles, tools and liability insurance premiums, project management and equipment costs belong in the fist section.. directly tied to the revenue generated.
Understanding these expenses and how to quantify them in a potential bid will help bid to make a profit. And most importantly, see all your hard work compensated. Translation: Success