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Reply To: Calcuating overhead costs in project budgets

Chip Griffin
September 28, 2020 at 10:17 am #7667

You have two choices on how to handle Overhead in your per-project budget calculations. You can take your $2000 total and assign a fixed amount to each project (e.g. every project takes $250 in overhead expense). This works best when all of your projects are roughly the same size. Alternatively, you can take a percentage of the project cost and add that as the overhead number. For example, if your total expenses (including salaries) equal $1000 for the project and you estimate that 20% of your agency’s expenses (excluding items you get reimbursed for by clients) are overhead and not included in the project expenses, then you would end up with $200 (20% of the total $1000 project cost).

Chip Griffin founded the Small Agency Growth Alliance (SAGA) to help PR and marketing agency owners achieve their goals.

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