My $200,000 Lesson: Understand Your TRUE Labor Costs
Modern Craftsman
Modern Craftsman
4.9 • 1.1K Ratings
🗓️ 30 June 2025
⏱️ 58 minutes
🧾️ Download transcript
Summary
Nick shares the story of a $200,000 mistake that could have been avoided with one clause in his contract. This episode unpacks the real cost of labor — from hidden overhead and labor burden to inefficient pricing strategies — and shows how even experienced builders can leave money on the table. Nick and Tyler break down how they calculate true labor costs, the ripple effect of inaccurate billing, and why it's time to rethink how you estimate, price, and protect your work.
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Show Notes:
Contractors Coalition Summit Recap and Labor Burden Introduction (0:00)
Sponsorship Announcements and CCS Event Highlights (1:12)
Labor Burden Calculator and Financial Lessons (12:46)
Practical Advice for Calculating Labor Burden (24:33)
Overtime and Labor Burden Considerations (53:27)
Conclusion and Call to Action (56:22)
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Transcript
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| 0:00.0 | I ended up writing a client a check for $200,000 because I made a pretty big mistake. |
| 0:06.4 | I call my lawyer. I'm like, hey, you know, what did we miss? And he goes through our contract and |
| 0:11.2 | goes, you need to have an exhibit in your contract that states the billable rate. |
| 0:18.3 | Welcome back to the Modern Crafts and Podcast. Today we are going to dive into two things. One, |
| 0:23.7 | a recap of our most recent Contractors Coalition Summit and two, more exciting, labor burden. What is labor |
| 0:32.6 | burden? It is the total cost of business incurs to employ a worker beyond their direct hourly wage or salary. |
| 0:40.4 | It includes all additional expenses associated with that employee, such as payroll taxes, insurance, |
| 0:45.8 | benefits, and other indirect costs. So many of us are not accounting appropriately for labor |
| 0:52.2 | burdens. So Nick and I are going to dig into the stakes that |
| 0:55.6 | we've made, what it's cost us from a financial perspective, and how we account for the labor |
| 1:01.5 | burden associated with employees, both as per Nick's business and my business, because they |
| 1:07.2 | are a little bit different. And then we are going to give you the offer of a free labor burden calculator if you're |
| 1:16.7 | signed up for the newsletter. |
| 1:18.3 | So definitely hang around, talk a little bit about CCS, how much fun it was, what you missed |
| 1:23.6 | out on, and why you should sign up for Chicago and then also diving into labor burden |
| 1:29.7 | and how if you are not accounting for that, you are leaving a ton of money on the table and |
| 1:33.9 | most likely putting work in place that is not profitable. With that being said, this podcast is |
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| 2:01.9 | and has the ability to hold up to high heat, even in dark colors. And unlike some of the vinyl |
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