Project Bid Estimate

Definition: The wages, payroll taxes, and costs directly tied to the personnel physically performing the billable work on the job site.

Examples: A lead carpenter framing a wall, a licensed electrician pulling wire, or a plumbing technician installing pipe.

Note: Office staff and general management are excluded and handled under overhead.

Definition: The apportionment of fixed, ongoing business operating expenses that keep your business running but cannot be directly attributed to a single specific billable job.

Why it's there: It ensures that project revenue contributes to your baseline business expenses so you don't lose money on day-to-day operations.

Examples: Commercial vehicle insurance, trade software subscriptions, business licenses, phone bills, advertising, and shop/office rent.

Definition: The percentage added directly to the raw cost of labor, materials, equipment, or other project costs.

Why it's there: It ensures that every individual category of a project contributes its share toward gross profit and business growth rather than just breaking even on wholesale expenses.

Definition: A flat financial safety net set aside to absorb unexpected job-site surprises.

Why it's there / What it's used for: It is used to protect your profit margin from being wiped out by unforeseen problems (such as hidden water damage, rusted pipes behind drywall, or sudden material price spikes) so you never have to pay for unexpected site challenges out of your own pocket.

Definition: An initial cash payment collected from the client prior to breaking ground or ordering specialized materials.

Why it's there / What it's used for: It ensures you never finance a client's project out of your own working capital, covers initial material packages and permit fees, and verifies the client's serious financial commitment.