Why Overtime Is Killing Your Business Profit

First, let's agree and understand overtime is a profit leak.

It's if you ever cut yourself shaving, I don't know if you use a razor.

Sometimes I do.

And then you just cut yourself on the neck.

And like an hour later, you're still dabbing yourself or you see it's on your shirt.

That is a leak.

You're leaking from your neck because you did a bad job shaving.

But profit leaks are just like that, too.

There are these tiny little cuts in the business and they're so innocent.

It's easy to ignore them, and it's easy to forget them.

But like I said a few seconds ago, if you have a couple of guys doing overtime, getting paid, let's assume their standard wage is $22.

I used Ohio numbers for this, but let's say the average wage is $22 for a medium-trained technician, whether you've got carpenters or demolition team or finishers or delivery guys, just say $22.

and you're paying them time and a half, they're going to make around that $33 range, right? At 33 bucks, if they work 10 hours, that person's going to make 330 bucks.

If you've got two guys at 660 bucks and so on and so forth.

So think about that 660 bucks.

If I just pay that out in overtime without needing it, it wasn't built into the original estimate.

Money certainly is going into my guys' pockets.

We're going to talk about that in a second because some like that and some don't, and I get it.

But at the end of the day, that profit, that extra money you're paying to the team should be going to you.

And so literally, I mean, you are actually just giving money away.

There's just no other way to say it.

You are giving money away.

So over the years, we've seen a whole bunch of different opinions about overtime from different shops, from different crews.

Here's some examples.

I remember working with Greg in Rhode Island, I believe.

First, let's agree and understand overtime is a profit leak.

It's if you ever cut yourself shaving, I don't know if you use a razor.

Sometimes I do.

And then you just cut yourself on the neck.

And like an hour later, you're still dabbing yourself or you see it's on your shirt.

That is a leak.

You're leaking from your neck because you did a bad job shaving.

But profit leaks are just like that, too.

There are these tiny little cuts in the business and they're so innocent.

It's easy to ignore them, and it's easy to forget them.

But like I said a few seconds ago, if you have a couple of guys doing overtime, getting paid, let's assume their standard wage is $22.

I used Ohio numbers for this, but let's say the average wage is $22 for a medium-trained technician, whether you've got carpenters or demolition team or finishers or delivery guys, just say $22.

and you're paying them time and a half, they're going to make around that $33 range, right? At 33 bucks, if they work 10 hours, that person's going to make 330 bucks.

If you've got two guys at 660 bucks and so on and so forth.

So think about that 660 bucks.

If I just pay that out in overtime without needing it, it wasn't built into the original estimate.

Money certainly is going into my guys' pockets.

We're going to talk about that in a second because some like that and some don't, and I get it.

But at the end of the day, that profit, that extra money you're paying to the team should be going to you.

And so literally, I mean, you are actually just giving money away.

There's just no other way to say it.

You are giving money away.

So over the years, we've seen a whole bunch of different opinions about overtime from different shops, from different crews.

Here's some examples.

I remember working with Greg in Rhode Island, I believe.