Finance: The Contractor’s Formula to Success for Good Times and Bad

Overhead cost increases during economic growth spurts should be treated as temporary

June 02, 2015
Finance: The Contractor’s Formula to Success for Good Times and Bad

With the right formula, the successful contractor of the future will generate profit in good days or bad, writes educator and management consultant Thomas C. Schleifer, Ph.D.

“Some say the overhead paradox is that you can't get half a person, half a truck, or half a piece of equipment. But actually, you can,” he writes, adding that overhead costs should be between 15 percent and 25 percent, and more importantly, be flexible and regarded as temporary.

“The 15%-to-25% range should accommodate the concern and skepticism of many who will suggest this concept is impractical and too expensive,” Schleifer writes.

Learn more about the formula to success at Engineering News-Record.

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