Quick quiz: what do trucks, insurance, coffee, software subscriptions, and the donuts you bought for the crew have in common?
👉 They’re all overhead.
And before you panic, no, overhead isn’t some mysterious accounting curse word. It’s just the cost of keeping your business alive, even when you’re not on a job site.
Why Business Owners Hate Talking About Overhead
Most small business owners avoid overhead like it’s kale on a dinner plate. Why? Because:
- It sounds boring.
- It feels complicated.
- You’d rather just focus on “real” costs (materials + labor).
But here’s the truth: if you don’t understand overhead, it’s quietly eating your profit like termites in the walls.A Relatable Example
Let’s say you’re a landscaper. You quote a job at $2,000.
- Materials: $500
- Crew wages: $700
So you’re thinking: “Sweet, $800 profit.”
But wait, what about gas for the truck? The insurance bill? Your phone, the software that schedules jobs, the shop rent, and yes… the donuts?
Once those hit, your $800 shrinks fast. That’s overhead in action.
The Simple Way to Think About It
Overhead = all the stuff that keeps the lights on.
- The Big Ones: Insurance, rent, vehicles, payroll taxes, admin salaries.
- The Sneaky Ones: Software subscriptions, uniforms, credit card fees.
- The Tiny-but-Add-Up Ones: Coffee runs, shop snacks, random hardware store trips.
If your pricing doesn’t account for these, you’re not really making money; you’re just covering the obvious costs.
Quick Exercise: Find Your Overhead Number
Here’s a 10-minute way to figure it out:
- Open last month’s expenses.
- Highlight everything that wasn’t tied to a specific job.
- Add it up.
- Divide it by the number of jobs you did.
That’s how much overhead each job needs to carry.
Why It Matters
When you know your overhead, you price with confidence. You stop underbidding just to “win” jobs. And most importantly, you actually take home what you deserve.
Crown Consulting Can Help
At Crown Consulting, we love making overhead simple. No jargon, no spreadsheets that make your head spin—just clear numbers that help you grow.
👉 Want to learn more? Listen to Beyond the Bank Balance for a deep dive. Or check out how we help businesses understand overhead and build profitable pricing models.
Overhead isn’t scary. It’s just like your business’s grocery bill. Ignore it, and you’ll go hungry.