In this video, I’m breaking down everything you need to know about overhead percentage and how to handle customers who question your fees without losing your cool or your paycheck.

Alright, let’s get into it. overhead percentage is basically the slice of your total costs that covers all the stuff besides labor and materials, like insurance, tools, permits, office expenses, and even that random coffee you grab to stay sane on a long day. Charging around 10-20% overhead is pretty standard in the construction world, especially if you’re running a small crew like me. You gotta remember, customers usually want the lowest price possible, and yeah, some will lowball you just to see if you’ll budge. But here’s the thing. you’ve got to stand your ground because if you start dropping your overhead just to please everyone, you’re basically working for less than you deserve. I always tell folks, precision matters. like my framing is within a 1/16 inch every time, which is no joke and takes skill and time, so that overhead covers all the behind-the-scenes work that makes the final product tight. Plus, in places like California, folks bill carpenters at $93.50/hr and then tack on a 20% markup for materials and labor, pushing rates over $110/hr easily. Electricians and plumbers typically charge even more per hour, with electricians around $125 and plumbers hitting $180/hr. So yeah, your 10% on materials isn’t out of line. it’s just part of how contractors keep things running smoothly.

One of the biggest mistakes I see when people talk about overhead percentage is either undercharging because they don’t fully understand their costs or letting customers bully them into cutting fees too low, which leads to burnout or losses. Another common issue is not being transparent about what overhead covers. if you explain it clearly, most clients get why it’s there and are less likely to push back. Lastly, some contractors forget to factor in all those hidden costs like insurance or equipment maintenance, which can wreck profits if ignored. The fix? Know your numbers inside out, be upfront with clients about why overhead exists, and don’t be afraid to say no when someone tries to lowball you. it’s business, not charity.

BigHomeProjects.com is a solid spot for homeowners who want to find reliable local contractors without all the hassle and guessing. Plus, if you’re a contractor looking for steady work, they make it easy to connect with folks who actually need your skills and value what you bring to the table.

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