The Capacity Based Markup Workbook

A Spreadsheet Tool For Help Determining "How Much Should I Charge?"

For contractors and anyone running a service businesses type of operation where you are selling your services and or expertise by the hour the The Capacity Based Markup Workbook answers the big huge questions so many small business owners have…’

How Much Should I Charge?

The Capacity Based Markup Workbook is an Excel Workbook for assigning Labor Burden to help the user correctly determine a Loaded Labor Rate and/or an appropriate Labor Markup for Contractors Using a Capacity Based Markup Methodology (aka PROOF/Indexed/Labor Allocated Overhead).

Since 2004 thousands of contractors have downloaded and used the The Capacity Based Markup Workbook to help them figure out a hourly labor rate based on their real financial numbers and not just guesswork.

In non-contractor speak the workbook can be used by any service type business where you need to accurately figure out a hourly rate to charge for your and your employees.

A Little History as to How The Capacity Based Markup Worksheet Came About

As part of a discussions in the Journal of Light Construction Online Forums back in 2004 regarding use of what is known as a Capacity Based Based Markup (also sometimes known as PROOF or Indexed or Labor Allocated Overhead markup so hence the PILAO acronym for the worksheet) I created this Excel Workbook. For more information regarding using a PROOF/Indexed/Labor Allocated Overhead markup method in general click to read the the Quietly re-Thinking Out Loud Blog post entitled: The Potential Problem Using a Traditional Volume Based Markup.

The Introduction

The Introduction Worksheet provides a basic overview of the spreadsheet’s framework and navigation links to the individual worksheets.

The Labor Cost Worksheet

With the Labor Cost Worksheet in the yellow shaded data entry cells you set the wage rates, and then the costs that make up your  Labor Burden i.e. the employer costs such as benefit costs, and other miscellaneous Variable Overhead  expenses you want to cover such as car and/or truck payments, vehicle maintenance, small tools, etc.

The Billable vs. Non-Billable Hours Worksheet

On the Billable vs. Non-Billable Worksheet you account for items such as paid holidays vacation time, training, downtime and other non-billable but paid hours that you and your employees will generate.

The Fixed Overhead Costs Worksheet

With the fixed Overhead Worksheet you enter you cost or budgets for all of your Fixed Overhead  items such as Capital Tools, General Office Expenses, Marketing, Insurance , Professional Fees, Local & Regional Business Taxes., Loan Payments, Contingency, Owners Compensation, Sales Cost and the Net Profit  you want your business to generate.

The General Summary Information Worksheet

The General Summary Information Worksheet displays the calculated Labor Billing Rates for you and your employees along with a breakdown based on all of the entered data as to what your costs and projected Net Profit are per employee and/or per hour, per day, per week, per month or per year.

The Owners Information Worksheet

And after setting up and answering the questions in the yellow shaded cells the Owners Information Worksheet displays the Owner’s Compensation package based on all the data entered.

Do you think the Capacity Based Markup Workbook can help you figure out …

How Much To Charge?

You Can Hire Us To Analyze Your Company's Markup Method and Give You A Professional Evaluation

We Offer a Complimentary Initial Consultation: In our initial meeting we learn more about you and your specific goals and desires. We explain our programs and together we determine which ones might be appropriate for you. If we decide to work together, we will provide you with a proposal outlining our fees and services and you’ll provide us with a small retainer to begin working on your project.

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