Service

The service industry ranges from medical care to professional services. Its value is driven by man hours and not the sale or production of widgets.

Cost of Services Rendered

Cost of Services Rendered

Service based operations do not use the traditional retail based format for the profit and loss statement which utilizes a 'Cost of Goods Sold' section, instead the service industry uses a 'Cost of Services Rendered' segment.   The presentation format is very similar though.

This content is for Bronze, Silver, One-Time and Contractor's Diagnostic members only.
Log In Register

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.

This content is for Bronze, Silver, One-Time and Contractor's Diagnostic members only.
Log In Register

Booth Rental – Legal and IRS Compliance

Booth Rental - Legal and IRS Compliance

A long standing custom in the hair salon industry is owners of salons leasing out booths to hair stylists.  If not properly documented and exercised appropriately, the owner opens the door for many legal issues.  Booth rental has both legal and IRS compliance issues that need to be addressed.  Booth rental is legal in many states but you must adhere to several contractual compliance requirements to completely separate your salon from the renter.

This content is for Bronze, Silver, One-Time and Contractor's Diagnostic members only.
Log In Register

Hair Stylist Compensation Model

Salon Compensation Model

One of the most fascinating business models is the hair salon industry.  Many salons are poorly managed and rarely generate adequate profits.  To make matters worse, the stylists are like professional sports players.  One week they are playing for this team, and next week they are on a new team.  In effect, they switch salons.

Format of the Profit and Loss Statement for Service Related Businesses

Profit and Loss Statement for Service Related Businesses

Service related businesses require a different format than the traditional profit and loss statement AKA the income statement.  The traditional profit and loss focuses on sales of products and a corresponding cost of goods sold section to help the reader evaluate the gross margin.  But in service, the owner needs a profit and loss statement formatted to key in on overall productivity and costs of that productivity.

This content is for Bronze, Silver, One-Time and Contractor's Diagnostic members only.
Log In Register

Labor Availability – How to Calculate Maximum Available Hours

Labor Hours

Every service related business wants to maximize the hours the staff bills or provides services to customers.  When they are working, the business gets to bill for time and generate revenue.  Maximum revenue means the best chance at creating the highest profit.

This content is for Bronze, Silver, One-Time and Contractor's Diagnostic members only.
Log In Register
Follow by Email
Facebook
Google+
https://businessecon.org/category/performance-standards-in-various-industries/service">
Twitter
LinkedIn