Summary: http://www.gopherforum.com - Have you ever heard of the term overhead costs? If so, could you name three of your overhead costs? When was the last time you created an income statement to check on your profitability? Do you create one after each job you bid on? Some business owners do that often and have a great understanding of their financial circumstances. If you are kind of stuck on this topic, here is a great discussion on it from the Gopher Lawn Care Business Forum. One lawn care business owner wrote "In accounting the term overhead refers to all the non-labor expenses that are required to operate your business. These expenses can be either fixed or variable. Overhead generally refers to the ongoing expenses of your business administration which aren't attributed to any specific business activity, but are necessary for the business to function. For examples overhead costs would include utilities, rent, insurance, and depreciation etc. So even if you decided not to do anything tomorrow and take the day off, you would still have costs for that day and that is the overhead to keep everything going. We generally can't do anything to change our overhead costs from one day to the next. Labor costs are variable as are sales costs as it depends on workload and what the sales are bringing in. 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. You should be able to run an income statement at any time to check the pulse of your business. In our first year of operation, I checked up on every job we did to measure the profitability. Now a bunch of years later, I have a very good handle on what we need to charge. I must admit I did lose money on three landscape jobs this year which became apparent to me after running an income statement during those jobs but all in all I feel I made it up and I am very pleased with my after tax income. What is important to me is why did we lose money on those jobs and then change the problem or whatever the issue was right away. I know we made money in the bigger picture but undercharging on a few jobs is something that needs to be corrected. If you are in need of free lawn care marketing material for your lawn care business, please visit our site at http://www.gophersoftware.com. We have hundreds of free lawn care logo, flyer, door hanger and web templates you can download and use for your lawn care business. We also have free lawn care business contracts, estimate and proposal forms. Download our trial version of Gopher Lawn Care Business Software. Gopher will help your lawn care business schedule and invoice more customers in less time, allowing you more time to grow or enjoy your life. Check out my lawn care business blog at http://www.lawnchat.com and my lawn care business forum at http://www.gopherforum.com and visit http://www.lawnchat.com
