Costs of running a business..

[welwell]

We sold all our chip last year. Probably 12 arctic loads. It's worth a couple of grand even after loading..! I never give it away any more, unless it helps the job! Each truck load is £10-£20..

 

Who did you sell it to?

[skyhuck]

How on earth can you include the vat payments to your running costs, they have nothing to do with it. When you say 'fixed rate scheme', is that the 'flat rate scheme'? If so, my understanding was that you only qualified for this sscheme if your turnover was less than about £80k ish, in which case your running costs alone put you bang on that.

 

I could not understand why your running costs where so high unless you were running big kit such as mulchers, tree bunchers etc.

 

Remove the vat and that will give you your running costs.

 

Not so, I think they want your turnover to be under £150K, but it was a few years ago when I joined, so it could higher now.

 

The VAT threshold is £77K so a maximum of £80K for the FRS would not be much good.

[Hodge]

That has made me just work all mine out transit truck and new chipper all fuel breakages and spares blar blar is £33.83 minus my wages with my wages its £126.83 a day

 

That seem low James?

[benedmonds]

Not so, I think they want your turnover to be under £150K, but it was a few years ago when I joined, so it could higher now.

 

The VAT threshold is £77K so a maximum of £80K for the FRS would not be much good.

 

I believe the Flat rate scheme threshold is now £250K a year.

 

I included VAT payments as to me they are a payment that goes out of the bank like everything else. I can't see why folk are arguing with my figures. I'm not making them up. I am not saying they are good, bad, high or low..

 

All I did was divide what I spent (excluding wages and drawings) by the numbers of work days in the year. As I see it that is what the daily cost this year has been to run my business.

[eddiegts]

I think every company is going to be different. some people have different yard rates, insurance advertising etc.. Mine was about the £295 mark last year but I cut back on rubbish that I did not need poor marketing old trucks (got new stuff so repair bills dropped loads) looked after saws better made chains last that bit longer worked smarter etc..

Also as we all know its not about turnover its profit.

[tuttle]

I believe the Flat rate scheme threshold is now £250K a year.

 

I included VAT payments as to me they are a payment that goes out of the bank like everything else. I can't see why folk are arguing with my figures. I'm not making them up. I am not saying they are good, bad, high or low..

 

All I did was divide what I spent (excluding wages and drawings) by the numbers of work days in the year. As I see it that is what the daily cost this year has been to run my business.

 

my numbers were about starting and running from zero, so if no work comes in for a month, the dent does not hurt much.

 

the thing with high turnovers is profit - if its good, GREAT! if it knocks you for six every month.....alot of people think 'whats the point?'

 

only a few odd words

[likeitorlumpit]

I believe the Flat rate scheme threshold is now £250K a year.

 

I included VAT payments as to me they are a payment that goes out of the bank like everything else. I can't see why folk are arguing with my figures. I'm not making them up. I am not saying they are good, bad, high or low..

 

All I did was divide what I spent (excluding wages and drawings) by the numbers of work days in the year. As I see it that is what the daily cost this year has been to run my business.

 

ben

You can't include VAT in your overheads as your customers pay this on top of your bill.

Theres fixed overheads and variable overheads

Fixed are those that don't vary whether you are busy or slack

Variable are dependent on how busy you are. Therefore if you are really busy your fixed overheads won't change much but your variables will

Unfortunately without working them out separately you can't determine a pricing structure properly. The busier you are the cheaper you can be

It's called economies of scale and is one reason why big companies succeed.

[Marc Lewis]

Not so, I think they want your turnover to be under £150K, but it was a few years ago when I joined, so it could higher now.

 

The VAT threshold is £77K so a maximum of £80K for the FRS would not be much good.

 

Of course skyhck, my mistake. It was the £77k figure in my head, but knew that the cut off threshold was quite low.

 

That is good news that they have risen it to £250k benedmonds, I can save a small fortune on that scheme.

 

You still shouldn't include your VAT bill as an overhead though, because it isn't, you simply add it to your invoice and the client pays it.

[Jonny69]

So you could say you run 3 teams then, so if the average for 1 team truck and chipper is £130 pd why is it so hard to believe that running x3 teams will be x3 times more overheads bearing in mind extra marketing to keep the teams going, extra H&s as I would presume you are employing more then 5 blokes now, extra Maintanance, Insurence, yard space the list goes on and on and I've not even mentioned fuel!!

 

Bearing in mind that x3 teams should equal x3 turnover!!!

 

Running three teams should be cheaper (per man, per day) than one team. Better negotiations when you want three chippers and a grinder or new trucks. Cheaper rates for training multiple people, bulk buy chain reels and oil, fuel bowser at the yard etc.

[skyhuck]

Running three teams should be cheaper (per man, per day) than one team. Better negotiations when you want three chippers and a grinder or new trucks. Cheaper rates for training multiple people, bulk buy chain reels and oil, fuel bowser at the yard etc.

 

Soon dig a very big financial hole if work slows though.