Overhead!!

[bnclawncare]

I am looking for a "template" or preferably an 'Excel worksheet" that I can use to calculate my overhead expences. Does anyone have a sheet that automaticly calculates this when you enter in the numbers and that is willing to share? Thanks in advance.

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www.bnclawncare.com

[Steve]

Lawn care business tips

Are you trying to figure this out by the month or down to the hour?

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[picframer]

In accounting Overhead refers to "all non-labor expenses required to operate your business. These expenses are either fixed or variable" Maybe you could give us a little more insight into what you are trying to achieve. Are you running accounting software like Quick Books or Simply Accounting? If so, you can generate these reports anytime you wish, brake them down, export to excel for analysis etc.

[Steve]

why is labor not included in overhead?

[picframer]

Overhead refers generally to the ongoing administrative expenses of your business which cannot be attributed to any specific business activity, but are still necessary for the business to function. Examples include rent, utilities, and insurance, depreciation etc.

[Steve]

Ok, so even if you decided not to do anything tomorrow and take the day off, you will still have costs for that day and that is the overhead to keep everything going.

[picframer]

Originally Posted by Steve

Ok, so even if you decided not to do anything tomorrow and take the day off, you will still have costs for that day and that is the overhead to keep everything going.

Yes that is correct, things like insurance, rent, heat etc they are fixed overhead costs, we can't do anything to change them, labor is variable as are sales costs as it depends on workload and what the sales is bringing in.

[Steve]

At what point should a business owner consider labor costs when trying to determine the financial health of their business?

[picframer]

Originally Posted by Steve

At what point should a business owner consider labor costs when trying to determine the financial health of their business?

Any day of the week actually, run an income statement.

Because it was our first year I checked up on every job we did to measure the profitability, now I have a very good handle on what we need to charge, we lost on three but all in all we made it up and I am very pleased with the after tax income, I finished the financials almost a week ago and everything is filed and finished for 2009.

What is important to me is why did we loose and change the problem or whatever the issue is right away, I know we made money but undercharged on a few also which has also been corrected.

I find/found the hardest jobs to quote were wood cutting and chipping, so we are straight by the hour and if you are not happy about the progress you can stop us any time, I will give you a rough guess but it's impossible quoting downfall, we can cut trees down, block them up and chip the brush two to three times as fast as cleaning up downfall as it always a major mess.

[Steve]

I think that is fantastic you do that. Would newer lawn care companies have a tough time doing that though? Keeping track of different job categories to see which category they tend to make more money on and which they lose money on?