Variation on a Theme

These three profit-and-loss chart of accounts forms are customized for maintenance, lawn care and design/build operations. Your company may provide one or more of these services. You’ll need to adjust your budget accordingly.

Some key differences to note:

• Advertising costs are higher in the lawn care business
• Subcontracting and equipment rental costs may increase in the design/build sector
• Cost of materials for lawn care is higher than for maintenance; but demand for labor is lower for lawn care and net profit margin is significantly higher (on average)
• Most indirect overhead costs are the same across these sectors
• As you develop two budgets for 2010 (best- and worst-case scenarios), keep in mind these more flexible direct costs:
• Labor
• Materials
• Adjusting certain indirect overhead costs is more difficult, including:
• Insurance
• Rent
• Licenses and bonds, etc.