# Overhead Recovery & Markup
Your price has to cover three things: **direct job cost + a share of overhead + profit.** Miss the middle one and you'll "make money on the job, lose money in the business."
## Direct cost vs. overhead
- **Direct cost** — labor, material, equipment, subs *for that job*.
- **Overhead** — the cost of running the company: office, insurance, admin, vehicles, your salary.
## Recover overhead in your markup
Estimate your **annual overhead**, then build a recovery rate into every bid (e.g., overhead ÷ expected revenue). Then add **profit** on top.
## Markup vs. margin (again, because it matters)
To hit a target **margin**, mark up by **margin ÷ (1 − margin)** — 20% margin needs **25% markup**. Add a **contingency** for risk on tougher jobs.
**Takeaway:** If your markup doesn't include overhead, you're paying for the office out of profit.
> *Educational content — not legal, financial, or accounting advice. Run your numbers with your CPA.*
