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    What costs go into each bucket for a services startup?

    Same question, your business

    Quick answer

    For services, direct costs are mostly people's billable time plus project expenses, are your office and tools, sales & marketing wins clients, and G&A runs the business.

    The breakdown

    • Direct costs (COGS): the cost of your team's time on client work, plus project-specific costs — subcontractors, travel, tools bought for a job.
    • Overheads: office, software and tools your team uses, benefits, training, and non-billable staff time.
    • Sales & marketing: business development, proposals, client relationship management, commissions, and marketing.
    • G&A: finance, HR, admin, accounting and compliance.
    • R&D (if any): developing new service offerings, methodologies, or internal tools.

    Our honest take

    In services, your people are both COGS (when billable) and overhead (when not). That's why utilisation — the share of paid time that's billable — is your make-or-break number. Idle expert time is your most expensive cost.