Overhead
Overhead is everything it costs to run the contracting business that is not attributable to a specific job: insurance, licensing, vehicles, tools, office and software, estimating time, and the owner's unbilled hours. It is real cost, and it is invisible in cost before markup.
Overhead lives inside markup. When a bid applies +25% over cost before markup, part of that 25% is overhead recovery and only the remainder is profit, which is another reason bidding near cost before markup is quiet self-destruction.
How much overhead does a small GC actually carry?
It varies with fleet, staff, and volume, but the important discipline is knowing your own number: total annual overhead divided by expected annual revenue gives the minimum share of every bid that overhead must recover before any profit exists. A contractor who has never computed it is guessing at every bid.
Price your next job from the same cost data these figures come from, adjusted for where the job is. You set your markup and approve every line before you bid.
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