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cost of doing business

Discussion in 'Business Operations' started by lawnboy82, Jul 31, 2001.

  1. what does this phrase mean to us, "cost of doing business"
     
  2. Fantasy Lawns

    Fantasy Lawns LawnSite Bronze Member
    Posts: 1,913

    for me it is a value invested ....(both real $ .... & .... time, sweat, headache,etc) which I must invest or put into.....of which I either control Directly (ALL bills) or Indirectly (Damage or things like .... well sure a F250 will do ...but I Love the Crew Cab ) to return a value which is greater than the original value invested ;->
     
  3. Pauls Mowing

    Pauls Mowing LawnSite Member
    Posts: 207

    Cost of doing business is the cost of all equipment ( truck, mowers trimmers ect; insurance on the business, all office supplies and equipment, cell phone, fax, letterhead, computer ect. advertizing, so that you are in business and ready to perform your advertised service. You also need to know what that cost is so you know how to set your rates.

    Paul
     
  4. MATTHEW

    MATTHEW LawnSite Senior Member
    from NE OHIO
    Posts: 665

    These things are definately included. But think of all the things that you have that are really perks. Things that you have that you get to write off. Cell phone. Computer. Nice truck. Great equipment to cut your personal lawn with.The list goes on. Most people have these things but it is a total "loss expense" if you will.
     
  5. ok, thanx guys. because the reason i ask this is that i got burned for some money a few years ago. guy told me that it was the cost of doing business.
     
  6. thelawnguy

    thelawnguy LawnSite Silver Member
    Posts: 2,412

    Yup, definitely an added cost, maybe not a "perk" but a real one nonetheless.
     
  7. MJ

    MJ LawnSite Senior Member
    Posts: 312

    I think I would consider getting beat out of money owed me as "cost of doing business" only if I were in the business of lending money - like a bank or credit card company.
     
  8. thelawnguy

    thelawnguy LawnSite Silver Member
    Posts: 2,412

    If you do not collect money owed you at the time services are provided, you are also in the business of lending money.
     
  9. Lanelle

    Lanelle LawnSite Bronze Member
    Posts: 1,361

    I've thought of the 'cost of doing business' as being those unexpected expenses that fall outside of the norm. Sometimes it is making a decision to give something to a customer to maintain a spirit of good will and avoid negative publicity. Sometimes it is absorbing some unusual cost that was not bid into the job.
     
  10. HBFOXJr

    HBFOXJr LawnSite Bronze Member
    Posts: 1,706

    "Bad debt' is overhead.

    Other overhead items are:
    advertising
    phone
    postage, stationary
    professional fees and licenses
    educational cost
    dues and subscriptions
    property damage you pay for
    computer and support
    tax prep and bookkeeping
    facility lease, rent, repair
    sales vehicle

    and more.

    Production expenses are:

    Labor
    production labor wages, taxes, insurance ie: workmans comp and liability, helath ins
    uniforms, help wanted advertising

    Production Equip
    ins, lic and reg
    oil & gas
    depreciation
    parts & repairs
    shop supplies

    Materials - anything installed on a job
     

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