You then calculate what profit you would like, taking into account an owner wage, return on capital, other expected returns.
This will arrive and a back-up of your total overhead and profit level expected.
We begin by calculating your budget overheads
The Labour Costing Model can calculate charge rates for labour in the service industry.
It is a budgeter:
You turn to the next field which calculates your gross profit and other income including expected profit, including materials,
any vehicle running or any other standard charges made, eg call out fee's etc. The income from these sources are then
deducted from your overhead and profit figure, to arrive at the return you need from labour.
You then go to your employees, you can do this as groups or individually. WE work out there hourly cost rate, number of
hours per week, number of employees - take off non-productive time to arrive at available hours per employee to charge,
this is then matched against what profit you need from labour and the calculator will work out using your present charge
rates, what you need to increase them by to achieve your expected result.
You can check your calculations as there is summarised profit and loss showing what profit will come from your changes.
In summary this model works out what you should expect form labour and the most important issues relating to that include:
What is your productive hours that you have available for charging
What rates or extra employees do you need to generate a profit that would be acceptable to the business owner
The model is for sale for $300 + GST. Additional training will incur extra charges as necessary.
It is a simple calculator, easy to use and will result in an excellent guide to planning your income for the future.