This month's column will now take our real cost of doing business and help us determine what our breakeven cost per hour is.
Over the past five months we have devoted a lot of space to how to determine what the real cost of doing business (from a cash flow perspective) is for your company. We first determined the cost of replacing your equipment, which was followed by determining your largest single cost-the cost of nonbillable time. Next, we looked at markups and then profit margins for the materials and spare parts that you sell. After that, we covered the cost of company matching taxes. In the May issue, we connected all the dots together to determine what our total cost of doing business really was. Many readers, I suspect, found out just how expensive it is to run a company and how other contractors can under bid you. Most under bid for one reason and one reason only-they don't really know what their real cost of doing business is and what to charge to cover that cost while generating a reasonable profit.