Re: overhead

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Posted by Bob on November 21, 2002 at 08:04:14:

In Reply to: Re: overhead posted by M.R. Daniels on November 13, 2002 at 06:08:51:

That portion, according to the IRS, should be the percentage of your home used exclusively for the business. In other words, if your studio is 25% of your home, then count 25% of the heating, cooling, mortgage, etc.
: There is a page on this web site that tells you how to figure costs, and it is the most comprehensive I have read anywhere.

: Doesn't matter if you work at home. If you get very successul and need to rent studio space, or buy and have a mortgage, you will have to figure those costs as well and it would greatly affect your pricing. Even the IRS allows you to deduct a portion of your rent and utiliies for a home business!
: Our studio is on our premises. For overhead I figure in the electricity we use minus the normal home usage, heating the studio, a portion of our mortgage, phone for business, advertising, insurance, printing costs, anything it takes to run the business other than labor and materials. I add up a month's worth of expenses and divide the total by the number of hours I spend in the studio per month to get my hourly overhead. That rate is added in with labor and materials.
: Otherwise, you are working for nothing.
: MR

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