Costs of running a business..

[Ty Korrigan]

But does that not ring true for any business investment?

I think one of the biggest 'costs' to a business is down time, either for mechanical reasons, physical (health) or lack of clients.

Regular investment in reliable quality kit as part of your business plan helps smooth running.

Also, investing in publicity, get out there now rather than later.

By the time your diary is full of holes its too late, your ship is sinking.

Ty

[Rick2517]

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.

 

You're right it's never going to be adsact math but its not far off and in this equation the end figure of £330 is £60 less then the x3 £130 for 1 team (if that makes sense )

It's unlikely that you will be in the fortunate position to be able to buy x3 chippers at once but I get what you're saying.

However fuel will be x3 and this is my biggest expense

Maintanance bills will be x3

Tools purchases will be x3

It highly likely that admin staff will also be required as this will need to be incorporated into overheads

This means that more office equipment will be needed, not to mention getting an office in the first place and once you have an office and per infant members of staff in there this opens up issues with paying business rates and insuring H&s is up to scratch which may mean bringing in a third party for advice, the list goes on and on.

My advise would be to stay small and keep it simple

[Gareth Dalzell]

I think a lot of you are all being a bit negative about expansion here. If you have a good business model and it is working well, a little growth can be a good thing up until the point that you get to a position that you are still comfortable and the hassle v profit ratio is acceptable to you.

 

For some, small is beautiful and works for them and I realise that, but careful planned expansion is exciting and rewarding when done correctly and need not compromise your existing business.

[likeitorlumpit]

I think a lot of you are all being a bit negative about expansion here. If you have a good business model and it is working well, a little growth can be a good thing up until the point that you get to a position that you are still comfortable and the hassle v profit ratio is acceptable to you.

 

For some, small is beautiful and works for them and I realise that, but careful planned expansion is exciting and rewarding when done correctly and need not compromise your existing business.

 

Plus and this can be a big plus. It means change and thats a good motivator

[benedmonds]

ben

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

 

I am not an accountant, I just divided the number of days worked by the cash I had to spend. With the Flat rate VAT scheme you pay a fixed percentage (9% i think) on all sales even though you charge 20%. To us it it just a cost like anything else. Yes it will go up with sales but so will fuel use, chain use etc etc..... It willl inflate the daily costs but cash comes in and goes out...

[tuttle]

I think a lot of you are all being a bit negative about expansion here. If you have a good business model and it is working well, a little growth can be a good thing up until the point that you get to a position that you are still comfortable and the hassle v profit ratio is acceptable to you.

 

For some, small is beautiful and works for them and I realise that, but careful planned expansion is exciting and rewarding when done correctly and need not compromise your existing business.

 

depending how you look at it, i'm a one man band, with over 15 local contacts with access to everything, from labourers, climbers, chippers to a tractor with 20ton trailer etc etc.

 

so the size of a job is no problem, just plan it, work out costs and your starting from zero.

[testcricket01]

That seem low James?

 

Well ive cut down alot of overheads everything is alot cheaper now, also my advertising is under £100 a year which is a massive cut from year before in yellow pages etc

[Al Cormack]

I am not an accountant, I just divided the number of days worked by the cash I had to spend. With the Flat rate VAT scheme you pay a fixed percentage (9% i think) on all sales even though you charge 20%. To us it it just a cost like anything else. Yes it will go up with sales but so will fuel use, chain use etc etc..... It willl inflate the daily costs but cash comes in and goes out...

 

You can apply to join the flat rate scheme if your turnover is £150,000.00 or less excluding vat. Once your turnover exceeds £230,000.00 including the vat you have to leave. I've been on the scheme for about 4 years now, and pay less vat each quarter than I did when on the normal scheme.

I use the rate for forestry & fishing which is 10.5%, (there is a 1% discount in your first year).

[likeitorlumpit]

But does that not ring true for any business investment?

I think one of the biggest 'costs' to a business is down time, either for mechanical reasons, physical (health) or lack of clients.

Regular investment in reliable quality kit as part of your business plan helps smooth running.

Also, investing in publicity, get out there now rather than later.

By the time your diary is full of holes its too late, your ship is sinking.

Ty

 

Absolutely spot on which is why we're all shaving prices at the moment just to keep busy. It can't last forever. Can it??

[Gareth Dalzell]

depending how you look at it, i'm a one man band, with over 15 local contacts with access to everything, from labourers, climbers, chippers to a tractor with 20ton trailer etc etc.

 

so the size of a job is no problem, just plan it, work out costs and your starting from zero.

 

No problem with you methods, it takes all sorts of businesses in a society - no rights or wrongs.

 

I,m just saying that you don't have to stay as a micro business you could develop into a small business.

 

I know many land based companies divide their costs into a 40-45 productive weeks in a year depending on how flexible their work cycle is.

 

We developed a costing spreadsheet years ago that takes in all our costs and as staff levels change or other costs change you simply enter the new figure and the all in hourly rate recalc,s at the bottom, Cost per hour, per day and per week, per crew