Costs Of Goods Sold <-> COGS

Think of your COGS as the VARIABLE costs. If the job doesn't go, then there are no COGS.

Regardless of whether you have a job underway, you still have FIXED costs.

Knowing your COGS is absolutely CRITICAL!

If you haven't calculated your COGS then you are shooting in the dark when it comes time to provide your customer a proposal.

COGS include job specific charges:

Material (plus the tax on materials)
Labor to do the job
Worker's Compensation & Additional Taxes on the Labor costs
Fees (permits, fuel surcharges, etc)
Additional Anticipated Charges (subcontractors, rental equipment, etc)

If you can't predict your COGS, then how are you going to predict your required Mark Up which will enable you to cover not only your overheads, but will also ensure that you've enough profit to buy your spouse that new appliance for the house.

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Costs Of Goods Sold <-> COGS

Knowing your COGS is absolutely CRITICAL!

COGS include job specific charges:

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