Industry Standards

Learn about performance standards and methods to monitor your company’s results against industry standards. There a multitude of tools and principles to guide the business owner to success.

Cost Codes – Subset of Item Codes

Cost Codes

Cost codes are unique identifiers assigned to items in an inventory sold individually or as a part of an assembly. The goal is to track the final outcome of the item(s) sold against the original estimated cost of the item. It is used in both financial and cost accounting.

Occupancy Rate – How to Evaluate

Temporary housing includes hotels, motels, resorts, apartment complexes and rental homes.   The number one tool to measure performance is occupancy rate.   This is the number of nights the facility is occupied against total available nights. 

P&L Statement – Best Format for Salons

P&L Statement - Best Format for Salons

An owner of a hair salon needs a well organized and properly formatted profit and loss statement (income statement) to properly evaluate performance.   There are multiple presentation formats used in the service industry, but after 25 years of accounting I advocate for the functional presentation arrangement.   This form of a profit and loss statement allows the owner to quickly and decisively determine performance throughout the entire operation.

Financial Leverage in Real Estate

Financial Leverage

Financial leverage refers to using a third party’s money to increase profit for the borrower.  In real estate the profit or equity in the property is the weight being lifted by the use of a lever (borrowing money) on the fulcrum (the property).

Replacement Reserves- Understanding the Fundamentals

Replacement Reserves

Long and short term housing rental businesses use a financial operations tool to maintain, repair and upgrade the physical facilities.  This tool is known as replacement reserves in the real estate industry.  In almost all cases it is a contractual agreement requirement between the mortgage lender and the borrower.

Business Dynamics of Hauling

Business Dynamics of Hauling

One of the industries in the transportation sector is materials hauling.  This is your dump truck industry.  All of us see these trucks out on the highway usually hauling gravel or dirt.  To profit well, efficiency is the primary business principle .  Lack of efficiency drives up fuel costs, loss of time in hauling; increased maintenance and repairs, and finally customer dissatisfaction.  This article is an introduction to this industry as a part of the transportation sector of our economy.

Retaining Stylists In The Salon Industry

Retaining Stylists in the Salon Industry

The constant movement of stylists from one salon to another is actually bad business. So how do you, as the owner, prevent or minimize this employee turnover? The answer lies in basic employee desires and needs in comparison to the salon’s needs and priorities.

Using Cash in Construction

Debt or Equity

There is a notion in business that using cash to pay for materials or service is illegal.  IT IS NOT ILLEGAL TO PAY FOR MATERIALS OR SERVICE WITH CASH.  It is illegal to do this if you do not properly document the transaction.  This is especially true in the construction industry.

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