Overhead
Overhead is what it costs to be in business, even on a day you do no work. Examples are insurance, your vehicle, tools, software, and a phone line. Build it into your price.
What it means
It is easy to price a job from the visible costs only: materials and your time on site. The costs that show on no single invoice get forgotten. Insurance, fuel, tool replacement, part of your phone bill and a yearly accountant stay the same in a slow week. None of it gets paid unless it is built into your price.
Here is a simple way in. Add up a year of overhead. Divide it by the hours you expect to bill that year. That gives an overhead-per-hour number to add on top of your labor rate. Skip this step and a job can "make money" on paper. You can still be short for the insurance bill in January.
Your yearly overhead for van, insurance, tools and phone comes to $9,000. You bill 900 hours a year. That is $10 an hour to add to every job just to break even on overhead. You have not yet made a cent of profit.
Pricing a job from materials and labor alone and treating overhead as something that comes out of "profit" later. A slow month shows there was no profit to take it from.
See also
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