Episode Details

How To Calculate Your True Labor Burden And Why It Matters with Diane Gilson

Episode 185 Published 5 years, 10 months ago

Description

Most contractors are leaving money on the table because they are not using their true labor burden before mark up. They mistakenly think they are making money on their jobs but have nothing left over at the end of the month. In today’s interview with financial expert Diane Gilson, we’ll use her free tool to determine all the hidden costs that you need to include in your true labor cost to make your expected profit.

What you’ll hear in this episode:

The biggest problem for contractors today is not charging enough for your work
Why not loading up your job cost burden and miscalculating the burden rate will kill your profits
How to combat the problem with Diane’s formula to guard against underbilling
The shocking numbers for how much each employee is actually costing you
Diane’s elevator pitch
Why your CPA will not help with the internal numbers in your business
What labor burden is: the extra costs that accompany each employee
The benefits of tracking these costs for individual employees
The traps of lost and wasted time, and why it must be measured
How Diane helps with ideal ways to set up your files
The basic financial information you need on a spreadsheet
How we determine allocated costs
How Diane’s program works when you just plug in the numbers
Why you need to compute this burden rate for each employee, or at least for each type of position
How to deal with overtime
How Quickbooks can work with Diane’s tool