There’s no single universal target, but a commonly cited general benchmark is keeping overhead under roughly 35% of revenue, with meaningful variation by industry and business model.
Why the benchmark varies so much by industry
- A service business with minimal physical footprint may run well below that benchmark
- A retail business with physical locations and inventory storage typically runs higher
- An early-stage business intentionally investing ahead of revenue may temporarily exceed typical benchmarks by design
Using the number correctly
Track your own overhead percentage over time and treat sudden jumps as a signal to investigate, rather than fixating on hitting a specific external benchmark that may not reflect your actual business model.
What matters more than the raw percentage
Whether overhead is trending up faster than revenue is a more useful signal than the percentage itself at any single point in time — overhead naturally rises in absolute terms as a business grows, the question is whether it’s outpacing the growth that’s supposed to be funding it.