Overhead
Indirect business costs that aren’t tied to specific client projects, including rent, utilities, software subscriptions, administrative salaries, and insurance.
Example
An agency calculates their monthly overhead at $25,000 (office rent, tools, admin staff, insurance). With 4 team members delivering 500 billable hours monthly, they determine an overhead cost of $50/hour that must be factored into their rates to remain profitable.
Related article:
Agency Pricing: How to Choose the Right Pricing Strategy
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