The Capacity Based Markup Worksheet
(also known as the " PILAO" Worksheet):

An Excel Spreadsheet for Determining Billing Rate & Labor Markup for Contractors Using a Capacity Based (aka PROOF/Indexed/Labor Allocated Overhead) Markup Methodology. Wondering just what is a Capacity Based Markup and how should you go about using it? Vist the Paradigm-360.com Bookstore and take a trip through the Markup, Pricing, & Financial Management category and look for David Gerstel's; Running a Successful Construction Company and Ellen Rohr's How Much Should I Charge?: Pricing Basics for Making Money Doing What You Love.

A Little History as to How The Capacity Based Markup Worksheet Came About

As part of a discussions in the Journal of Light Construction Online Forums back in 2004 regarding use of what is known as a Capacity Based Based Markup (also sometimes known as PROOF or Indexed or Labor Allocated Overhead markup so hence the PILAO acronym for the worksheet) I created this Excel Workbook. For more information regarding using a PROOF/Indexed/Labor Allocated Overhead markup method in general click to read the the Quietly re-Thinking Out Loud Blog post entitled: The Potential Problem Using a Traditional Volume Based Markup.

 

The Introduction

The Introduction Worksheet provides a basic overview of the spreadsheet's framework and navigation links to the individual worksheets.

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The Labor Cost Worksheet

With the Labor Cost Worksheet in the yellow shaded data entry cells you set the wage rates, employer costs, benefit costs, and other miscellaneous Variable Overhead Expenses you want to cover such as truck payments, vehicle maintenance, small tools, etc.

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The Billable vs. Non-Billable Hours Worksheet

On the Billable vs. Noninflammable Worksheet you account for items such as paid holidays vacation time, training, downtime and other non-billable but paid hours that you and your employees will generate.

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The Fixed Overhead Costs Worksheet

With the fixed Overhead Worksheet you enter you cost or budgets for all of your Fixed Overhead items such as Capital Tools, General Office Expenses, Marketing, Insurance , Professional Fees, Local & Regional Business Taxes., Loan Payments, Contingency, Owners Compensation, Sales Cost and the Net Profit you want your business to generate.

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The General Summary Information Worksheet

The General Summary Information Worksheet displays the calculated Labor Billing Rates for you and your employees along with a breakdown based on all of the entered data as to what your costs and projected Net Profit are per employee and/or per hour, per day, per week, per month or per year.

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The Owners Information Worksheet

And after setting up and answering the questions in the yellow shaded cells the Owners Information Worksheet displays the Owner's Compensation package based on all the data entered.

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A $10 Sharewareware Download

To download your own copy of the The Capacity Based Markup Worksheet you'll need to follow this link over to our 360 Difference Software web site where it resides.

 

The Capacity Based Markup Worksheet (also known as the " PILAO" Worksheet)