Included in every session will be one or more Skill Set exercises to help you engage with the Big Ideas presented. While this is optional, don’t cheat yourself and move through the Roadmap without applying the concepts you’re learning! Challenge yourself to complete every Skill Set activity and see what changes in your business as a result. We promise good things will happen.
Calculating overhead
Have you ever created an exhaustive list of all overhead costs? If you feel like something might be slipping through the cracks, or if you need to recategorize something before continuing to scale your business, now is the time! Make a list of all overhead costs that you know of. Use the suggestions below to make sure you’re not missing anything. If you are in doubt about some of the items to include, consult a peer and ask them how they categorize or have them check your list to see if you’re missing anything.
- Rent
- Utilities
- Insurance
- Office supplies
- Travel
- Advertising expenses
- Accounting and legal expenses
- Salaries and wages
- Depreciation
- Government fees and licenses
- Property taxes
Overhead Rate
To calculate the overhead rate, divide the total overhead costs of the business in a month by its monthly sales. Multiply this number by 100 to get your overhead rate.
For example, say your business had $10,000 in overhead costs in a month and $50,000 in sales.
Overhead Rate = Overhead Costs / Sales
The overhead rate is $10,000 / $50,000 = .2 or 20%
This means that the business spends twenty cents on overheads for every dollar that it makes.
Do you know what your overhead rate is for your monthly sales?
