Who Knows Their Numbers?

Discussion in 'Business Operations' started by Drew Gemma, Mar 22, 2005.

  1. Drew Gemma

    Drew Gemma LawnSite Bronze Member
    Posts: 1,510

    I hope Rodfather sees this one. I have been looking at the previous years numbers. My top expenses are as follows:

    New Equipment purchases

    Fuel

    Maintance and parts

    Cost of doing business expenses
    Insurance
    Lic./ Reg
    Plates
    Fees
    Office supplies
    Ect....

    Mulch

    So what percentage should they be and which ones should be on the top. If your gross is $100,000. What should the percentages of the above be just general idean I know their are tons of variables. But what formulas or numbers do the proffessional shoot for. Thanks guys I know this one is a pain.
     
  2. MacLawnCo

    MacLawnCo LawnSite Bronze Member
    Posts: 1,847

    Drew,

    your largest expense should be your labor costs. Depending on whether you acccount for your personal wages(if you are a sole proprietor) as direct labor or overhead will make it either a direct or indirect cost respectively. Generally field labor will be direct cost and supervisory positions/office will be indirect costs (overhead). The percentages for this will vary depending on how well you pay your employees.
     
  3. Drew Gemma

    Drew Gemma LawnSite Bronze Member
    Posts: 1,510

    your right I am sorry I wanted to mention do not include labor since we all know this kills all profits. thanks for reminding me of the mistake.
     
  4. tiedeman

    tiedeman LawnSite Fanatic
    from earth
    Posts: 8,745

    my top 5 expenses for 2004 (my misc expenses are broke down into categories though for 2005), not including labor

    12.89% fuel
    12.89% Equipment
    12.09% misc expense (uniforms, tools, etc)
    8.20% Insurance
    8.11% Equipment Maintenance
     
  5. rodfather

    rodfather LawnSite Fanatic
    Posts: 9,501

    Labor 29.02%
    Parts & Service 5.66%
    Fuel 5.22%
    Depreciation Expense 4.9%
    Insurance 4.31%

    BTW, new equipment acquistion is not an "expense" line item per se under general accounting practices. New equipment purchases show up on your Balance Sheet.
     
  6. RoyalZ

    RoyalZ LawnSite Member
    Posts: 46

    I need to understand this because i am simply setting my fixed assets to a equipment expense category in Quickbooks.
     
  7. rodfather

    rodfather LawnSite Fanatic
    Posts: 9,501

    As I mentioned, equipment purchases (whether new or used) fall under Assets of your Balance Sheet. If not, then you can't figure out what your Depreciation Expense will be for the year.
     
  8. MacLawnCo

    MacLawnCo LawnSite Bronze Member
    Posts: 1,847

    to add to Rod's last comment, the only way your equipment purchases end up on the income statement is through the line "depreciation expense".
     
  9. walker-talker

    walker-talker LawnSite Platinum Member
    from Midwest
    Posts: 4,771

    What about advertising? Of course this is going to be higher for newbies and much lower for establised business that can rely on WOM for new business.

    Rodfather, glad to see you labor rate at where you stated. I think thats about average for this industry, maybe even a little lower. I know a guy that pays his help 50% of gross income. Then the other 50% he has to pay himself and his expenses. Calls his business a hobby. It's a good thing, because he's not making any money.
     
  10. rodfather

    rodfather LawnSite Fanatic
    Posts: 9,501

    Matt, my numbers came right from QuickBooks. BTW, we've never advertised in 11 full time years...all referral.
     

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