You just signed a $150,000 job. You estimated $120,000 in materials, subcontractors, and direct labor.
You do the math. $150,000 minus $120,000. Thirty thousand dollars. Twenty percent of the contract. Not bad.
Except you haven't paid for your business yet.
01
The invoice nobody sends you
Every month, whether you're building one job, three jobs, or sitting at home waiting for the phone to ring, your company costs money. The truck payment doesn't pause because the inspector failed you. General liability doesn't care that the customer hasn't made the next draw. And your own time is the first thing you give away for free.
Call that collection of costs your standing invoice. Nobody mails it. But every month, you pay it.
02
Watch the profit disappear
Move the sliders. Nothing here touches your saved numbers.
- Contract
- $150,000
- Direct costs
- $120,000
- Profit on paper
- $30,000
- What each job carries per month
- $5,000
- Overhead allocated to this job
- −$20,000
- Profit after allocation
- $10,000
Share of the paper profit the standing invoice took: 67%
Move a slider and watch what happens to the money.
03
The test that separates your costs
One test decides where a cost belongs. If the phone stopped ringing tomorrow, would the cost continue? If yes, it belongs on the standing invoice. If it only exists because one specific job exists, it's a direct job cost. Truck payment: standing invoice. Concrete delivered for the Smith job: direct cost. Estimating software: standing invoice. Subcontractor invoice for the Jones pool: direct cost. Some costs are mixed. Fuel, equipment hours, portions of insurance all move with production. Those need a consistent allocation method. The principle stands: you cannot price correctly until you know which costs belong to the job and which belong to operating the business.
04
The contractor who works for free
Cal pours concrete. Truck, some equipment, home office. No receptionist, no shop, no sign. Ask him his overhead and he'll tell you, "Not much."
His cash operating costs: $1,939 a month. But Cal spends another 20 hours every month estimating, scheduling, calling customers, doing paperwork. At $75 an hour, that's $1,500 of his own time. Total monthly economic burden: $3,439.
Cal doesn't write himself a check for those hours. But he worked them. If he wants the business to run without him answering every call, someone eventually will. And that person won't do it for free. That's why we measure it.
05
What the total buys you
The standing invoice total does two jobs. It sets the floor: every month, your revenue has to clear that number before anyone profits. And it prices your capacity: divided by what you produce, it tells you what every job must carry. One number, instead of a hundred guesses.
MIKE'S EXAMPLE
Mike · General contractor, 43
Mike is 43. He started his own general contracting company in his early thirties. He ran his standing invoice for the first time on a Sunday night, three months of statements, one yellow pad.
- Standing invoice: $9,600 per month
- Jobs running at once: 4 on average
- What each job carries: $2,400 per month
- Overhead rate: 16% of production
He had guessed "maybe five grand." The real number was nearly double. Which meant every bid he'd ever written had been carrying half a truck instead of a whole one, and the other half had been quietly coming out of the profit. He took the next Monday off to reprice everything.
06
Your First Overhead Estimate
Your real numbers, monthly. This is the only part of the lesson that saves.
- Your monthly standing invoice
- $0
- Annual equivalent
- $0
- Weekly equivalent (annual / 52)
- $0
- Your unpaid time, priced
- $0
- Total economic burden (standing invoice + your time)
- $0
Your time shows here but does not save into the standing invoice. Lesson 6 turns it into a real draw.
Saved with your numbers. Only you can see it.
Saves in this browser when you stop typing.
07
Check Yourself
Answered 0 of 3
08
Enter Your Number
Your estimated monthly standing invoice. Save it. Lesson 2 consumes this exact number to price a real bid.
Nothing saved yet. Fill in your estimate above and it saves here.
It will save in this browser.
Numbers saved in this browser stay on this device. Create an account to keep them with you. Creating an account costs nothing. No card needed.
09
Put This Lesson to Work
Run your audit in Overhead Builder Pro. It takes the same costs line by line and turns them into what every production hour has to carry. What you enter there stays in your browser. Then come back and update your estimate here.
10
Next
Lesson 2: now that you know what staying open costs and what each job must carry, the question becomes the number you write on the bid. And why most bids quietly carry only half the truck.