Typical Expense Breakdown

B

brwill2005

New member
I would like to share some of my 2009 expense reports. Mainly for the aspiring entrepreneurs who would like to start a detail business. This is for a home based mobile operation. What I am going to list is the expense category and the percentage it makes up of total expenses. Obviously the actual dollar amounts have been omitted.



Advertising and Marketing- 18%

Equipment- 3.6%

Insurance- 4.6%

Office Supplies- .5%

Clothing/Other- 2.6%

Owner Salary- 42%

Supplies- 5.4%

Taxes/Licenses- 1.9%

Vehicle Expenses (mileage method)- 20.45%

Tolls- .85%
 
Great info, Brad. Mine looks very similar and this is extremely useful for anyone looking to start their own detail business.
 
Thanks for posting Brad. I assume that you're paying taxes out of the 42% (owner salary) category?



This should definitely help those people just getting started. :)
 
mshu7 said:
Thanks for posting Brad. I assume that you're paying taxes out of the 42% (owner salary) category?



This should definitely help those people just getting started. :)
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Yea, that was not factored into the breakdown. Have to consult with an accountant on those types of things.
 
David Fermani said:
What is the total $ amount of all these Expenses??
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David, I would prefer not to get into the actual dollar amounts. This was just to illustrate what the money goes toward, in the typical mobile detail operation.
 
driving impress said:
I order most of my supplies over the internet. Can you deduct the shipping and handling charges? Or just the cost of the products themselves?
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I do expense the shipping and handling for things I order online.
 
brwill2005 said:
David, I would prefer not to get into the actual dollar amounts. This was just to illustrate what the money goes toward, in the typical mobile detail operation.
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I’d like to be able to discuss how realistic or “typical” these expenses are, but w/o a little more info, I’ll just try taking an educated guess. Anyways, based on $50,000 in total expenses, your figures for Advertising($9000), Equipment($1800) & Vehicle Expenses($10,225) seem excessive. If $50K is the expense figure and a business earns $100,000 per year (which is unlikely), this business would earn a profit of about $70,000 before Income Tax is paid. The expenses you listed are Fixed & Variable, so without knowing the total Sales & Expense volume, these %s aren’t really actual. It might be better to list potential Variable & Fixed Expenses w/o assigning %s to them instead. Or, list a price range for each expense instead. I like the idea behind the thread and I’m just trying to help out.
 
David Fermani said:
I’d like to be able to discuss how realistic or “typical” these expenses are, but w/o a little more info, I’ll just try taking an educated guess. Anyways, based on $50,000 in total expenses, your figures for Advertising($9000), Equipment($1800) & Vehicle Expenses($10,225) seem excessive. If $50K is the expense figure and a business earns $100,000 per year (which is unlikely), this business would earn a profit of about $70,000 before Income Tax is paid. The expenses you listed are Fixed & Variable, so without knowing the total Sales & Expense volume, these %s aren’t really actual. It might be better to list potential Variable & Fixed Expenses w/o assigning %s to them instead. Or, list a price range for each expense instead. I like the idea behind the thread and I’m just trying to help out.
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Well David, the percentages are based on my actual expenses for 2009. Why would $9000 be an excessive expense for advertising? You have to advertise to get business don't you? As for the vehicle expense, when you are a mobile detailer, a big part of your expenses is your vehicle. This is especially true when you service an entire metropolitan area, like I do. I use the mileage method as opposed to the actual expense method. This means I document the miles I drive for business related reasons. This year the government has set it at 55 cents per mile. You are correct in that many of these expenses are variable, but would not change all that much from one year to the next. Like I said it is just to give the aspiring business owners an idea of what expenses they will be paying.
 
Pull your salary out of the equation and re-do your %'s to make it more useful as a comparison. Your salary isn't an expense, it's a reward.



I'll post my %'s from my fixed location when I get my P&L done.
 
todd@bsaw said:
Salary/wages/labor are all part of operating expenses whether you're a corporation, sole-prop, or partnership.
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Only wages paid to employees are considered operating expenses. He is an owner and as such collects a draw, which is a balance sheet item.
 
So how would you calculate your P/L when you are collecting a draw over a set wage percentage when you are an owner? (I'm not arguing with you. I'm not an accountant, so any info on calculating books is good info.)
 
todd@bsaw said:
So how would you calculate your P/L when you are collecting a draw over a set wage percentage when you are an owner? (I'm not arguing with you. I'm not an accountant, so any info on calculating books is good info.)
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No worries. I actually was an accountant for a few years before I opened my shop.



A profit & loss statement, aka income statement, is simply your income minus your expenses. Consider your expenses to be the "cost of doing business" or anything you spent money on to be able to make that income. As an owner you get paid after all bills are paid. You can pay your self a weekly/monthly sum but technically you are only paying yourself from the profits. So even in a one man operation, you do not account for your salary as an expense.



There is a lot of free info on the web about basic accounting. What we are talking about here are financial statements, specifically an income statement (income minus expense over a period of time) and a balance sheet (assets & liabilities at a given point in time).
 
MichaelM said:
Pull your salary out of the equation and re-do your %'s to make it more useful as a comparison. Your salary isn't an expense, it's a reward.



I'll post my %'s from my fixed location when I get my P&L done.
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I have to consult with the accountant on whether or not I can expense 'owner salary'. I think with or without this as part of the breakdown, the information is still useful to others.
 
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