Budget: FAQ

Within this article you will find the most Frequently Asked Questions regarding your Budget!

Select from the list below to jump to its spot within the article!

• Where do I get help creating my company's budget?
• My estimates are coming out with the wrong profit margin/Profit margin is lower than I'd like. How do I fix this?

Budget Formulas FAQ

• What if I want a Different Profit Margin for One Department vs. Another (e.g. Maintenance vs. Install)
• How do I calculate my field labor burden %?
• What is Throughput?
• How do I calculate Unbillable %?
• What does the Revenue Per Hour section mean?
• What is my company capacity? How is that calculated?

Budget: Overhead FAQ

• How do I know if a cost should be in my Overhead Budget?
• Why don't I enter my payroll taxes (labor burden) costs in my overhead budget?
• What if an Employee works both in field and in overhead?
• Should Disposal Fees go in my Material Budget?
• Why don't I enter my depreciation costs in my overhead budget?

Budget: Equipment FAQ

• Can I include All my Fuel and Repair in my Equipment Budget?
• Does Equipment I have at the yard and trucks, like the owner's truck or sales vehicles, go in the equipment budget?

Budget: Labor FAQ

• Is temporary or temp labor, Field Labor or a Subcontractor?
• How should I Budget if we do a mix of Union/Non-Union Work?

Budget: Tips & Tricks

• What's a Typical Goal to increase sales by?
• What if I don't know what my sales will be?
• How detailed should I break down my sales goals?
• Can I copy my budget?
• How do I archive a budget?
• Can I hide my budget from other employees?
• How do I delete my Default Budget?
• Can I create more than one company budget?
• We track lots of material expense accounts in accounting. Should I setup my budget the same way?
• My accountant puts my equipment in overhead. Should I put it there or in overhead?
• Can I add different Work Breakdown Areas?
• What do I enter in the Chargeout Rate Per Hour Box?
• What if I pay my staff a higher pay rate for certain kinds of work (e.g. snow + ice)?
• Troubleshooting: User can't save their own Budget

Where do I get help creating my company's budget?

You have a few good options that have helped thousands of landscape companies across North America build a profitable operating budget.

Option 1:  Come to A Workshop!

Every year we teach between 30 and 100 budgeting/estimating/job costing workshops across North America and beyond.  Our partners include major vendors like Caterpillar equipment, Unilock, and over 30 state and national landscape associations.

Costs range from $99 - $249 for a 2 day workshop, depending on location and host, and that includes 2 full days and your lunches.  Workshops are taught by actual landscape owners who run some of the top-100 landscape companies in North America.  

Click here to view our events calendar for a list of all our workshops

Option 2:  Register and sit in on a LMN Live Virtual Academy (LVA) course!

Designed exclusively for LMN Customers where a Certified LMN expert is ready to dig in and pave your path to success. Attend our Live Virtual Academy courses, and leave with the business skills to leverage the LMN platform, improving efficiency and establishing a truly profitable business. Budgets classes are held every Mondays, click the link below for more information. 

Click here to view our events calendar for a list of all our Academy courses

Option 3:  Schedule a Free Budget Review (online webinar)!

LMN offers amazing support which includes budget review webinars. To schedule a budget review webinar, please contact your designated Customer Success Manager or email support@golmn.com. 

My Estimates Are Coming Out With the Wrong Profit Margin/Profit Margin is Lower Than I'd Like. How do I fix this?

When estimates come out with a different profit margin than you'd like, it's because your budget is setup with a profit margin that's something different than you'd like.  If your budget it set to a profit margin of 5%, then every estimate you create using that budget will also come out, by default, with a profit margin of 5%.

You want to fix this... and the easiest way is to tweak the sales goal in your Budget so that your Budget P+L.  You want to add (or subtract) revenue from your final sales budget until your company profit margin is what you're targeting.

If you're asking yourself - but wait - why am I doing that?  I can't just change my sales goals, can I?   You can!  And the easiest way to understand why might be to think about how you'd price a job:

• You’re doing a job – you think the price should be around $10,000 and you want to make 10% profit
• You do an estimate for the job adding up all the costs – but the costs are a little more than you thought - if you charge $10,000, you’ll only make 5% profit
• So, to make your 10% profit, you change your price to $10,500 (or whatever) and you’re ready to go.  You don't change the costs of the job to hit the profit target - you change your price.

The way you’d change your price on a job is really no different than changing the revenue targets in your sales budget.  The sales goal is simply not enough (or too much, depending on whether you’re high or low) to cover you company costs AND make the profit you’re targeting.  So – you change your sales goal.

Don’t forget!  Your sales goal was an arbitrary number that you came up with at the beginning of the budget.  Maybe you said “I want to grow by 15%” – or something like that – and presto – there’s your sales goal.  But, now you’ve added up all the costs and overhead in your budget and you’ve realized that arbitrary sales goal doesn’t meet your financial objectives for profit.  So, now you can add (or subtract) sales from your budget to hit your target company profit margin.

But make sure it's still realistic!  After making any adjustment revisit your ratios and your efficiency score.  If your ratios (especially labor and materials) are all significantly under the industry average and your efficiency rating is much higher than industry average (e.g. above 90%), you've got a very aggressive budget.  Maybe one that's not even realistic to achieve.  In this situation, it's likely that you'll have to grow your sales revenue and your costs (labor, materials etc.) - without adding to overhead - until you hit your profit objectives.  It's a slower way to profitability, but at least you're likely to achieve it!

If you have questions, be sure to hit us up at support@golmn.com - we're happy to help look at your budget and make recommendations with you.

What if I Want a Different Profit Margin for One Department vs. Another (e.g. Maintenance vs. Install)

If you have 1 company budget, but a different target profit margin for your two divisions, you can do this in two ways.

Let's assume that you have a maintenance division and an install division.  You want to target 5% net profit for your maintenance estimates and 15% net profit for your install estimates.  Here's how to do it.

The Long Way

1. 1. you keep 1 budget and your set your net profit margin to either 5% or 15%. If most of your estimates are install estimates, you'd set your budget to 15% profit to minimize changes.
   2. When you do install estimates, it will automatically default to 15%. No action needed.
   3. When you do maintenance estimates, you'd set use the Set Profit button to override the profit to 5%.

The Short Way.

1. Make your company budget.  Call it the Install Budget. Set its net profit to 15%.
2. Use the Copy button to copy this budget and create a new budget called Maintenance Budget
3. On the Maintenance Budget, drop your sales goals until the budget's net profit margin is 5%
4. Save your new budget (the Maintenance Budget)
5. Now you have 2 budgets - one for estimating install, one for estimating maintenance. Let's setup the default budget for both divisions so you don't have to change anything when making an estimate
6. Click the Settings gear at the bottom left of your screen > Estimate Settings
7. Set the Default Standard Estimate Budget to your Install Budget
8. Set the Default Service Estimate Budget to your Maintenance Budget
9. Click Save to save changes
10. NOTE: EACH USER MUST REPEAT STEPS 7 THROUGH 12, AS DEFAULT BUDGETS ARE SET ON A PER USER (not PER COMPANY) BASIS

How do I calculate my field labor burden %?

Field labor burden refers to the cost of payroll expenses over and above the employee's raw wages.  Typically, labor burden would include:

• Payroll taxes (employer's contributions only)
• Workers compensation (employer's contributions only)
• Unemployment insurance (employer's contributions only)

Note that there may be other payroll expenses in your state/country/region over and above those listed.  Some other examples might include things like:

• Mandatory vacation pay
• Health care benefits

... but the expense should only be considered Field Labor Burden if it pertains to all employees.  (other expenses that only pertain to a few key employees should get entered as an overhead expense)

HINT:  Talk to your payroll professional to make sure you are calculating your labor burden expenses accurately.

Once you've identified the costs that you should treat as labor burden, then this formula will help you calculate your labor burden percentage.

Costs of Labor Burden (e.g. payroll tax, workers comp, UI)

divided by

Total Wages (straight wages, no burden costs)

The "normal" labor burden differs greatly from country to country and even from state-to-state, but labor burden typically averages somewhere between 13% and 25%, depending on where you're from.  If you're outside that range, we recommend consulting your bookkeeper or payroll professional to make sure you're calculating your burden correctly.

What is Throughput?

Throughput is a term made popular in the manufacturing industry.  It measures how effective your resources are at generating revenue.  Its helped managers shift decision making from "how much does this cost?" to "what net gain does this decision have on the company?".

Throughput is based on a few simple assumptions:

1. That material, rentals/other, and subcontractors are simple to increase - and do not have significant associated costs along with them.  Since vendors manage these costs, they are called Totally Variable Costs.
2. That labor, equipment, and overhead - although you can increase these costs too - cost far more to add.  These too are costs, and they can be variable, but these costs are more expensive to increase than total variable costs.

The goal of Throughput is to measure how effective your company's expensive resources (labor, equipment, and overhead) are at generating revenue for the company.

The formula is simple.  Throughput is the revenue remaining after you pay totally variable costs.

Throughput = Revenue minus Total Variable Costs (material costs, subcontract costs, other costs)

Throughput simply measures how much revenue your company keeps after your vendors are paid.  The higher the throughput on a job, the more revenue it is generating for your company.

We can also take throughput one step further.  Labor hours are the most expensive, and difficult, cost to increase.  You can add longer workweeks (OT) and even work weekends to a point, but eventually, to increase labor, you'll need to add more crews.  Adding a crew costs far more than just the costs of payroll.  You're going to need:

• A truck
• A trailer, equipment, and tools (which also requires more fuel and repairs
• Cell phone, uniforms, and other admin-related HR costs
• Training
• Eventually - increasing crews need more yard space, more supervision (overhead staff), more people selling work (sales staff), and more...

Because labor the most difficult cost to add/manage, we want to maximize throughput per hour - this measures how much revenue is retained by the company per hour worked.

Throughput Per Hour = Throughput divided by Field Labor Hours

To measure a job's throughput per hour, you'd do the following:

1. Find the job's throughput:  Job Price minus (Job Material Costs + Job Subcontractor Costs + Job Other Costs)
2. Find the job's throughput per hour:  Take the Throughput calculated in Step 1 and divide that number by the number of labor hours on the job

By maximizing throughput per hour on jobs, you're identifying the jobs that generate the most (retained) revenue for your company in the least amount of labor hours.

How do I calculate Unbillable %?

Start with your unbillable %.  You need to estimate how many payroll hours are not recovered via job estimates.  These are likely payroll hours spent:

• Loading/unloading/driving (if you don't include that time in estimates)
• Mistakes, unforseen problems, delays
• Going over budget on estimates
• Working around the shop
• Warranty + rework
• Meetings and hanging around
• Doing deliveries, disposals and moving equipment (where this time was not included in the estimate)

Basically you need to try to calculate how many hours you paid out in payroll that were not recovered via customer estimates.

The average unbillable time varies, but here are some averages (note these are just industry averages - make your best attempt to calculate your unbillable %):

Install companies that estimate in full days (e.g. - every hour spent loading/driving/at the job/driving and unloading):  10% - 15%

Install companies that don't include load/unload/shop/driving time in their estimates:  20 - 30%

Maintenance companies that include driving time in their estimates:  10% - 20%

Maintenance companies that don't include load/unload/shop/driving time in their estimates:  25% - 35%

What does the Revenue Per Hour section mean?

Lots of companies make the mistake of looking at that section and asking "Is that what I'm supposed to charge per hour for my work?"  

Definitely not.

When we talk about the Revenue Per Hour on a job, it includes the total selling price of the job - including all labor, materials, equipment, subs, overhead and profit - divided by the number of hours estimated.  It's the total revenue your crews are producing per man hour.

On your budget, your revenue per hour is calculated by taking your budget's total sales, and dividing it by the number of man hours in your field labor budget minus the % of unbillable hours that you have.

So, if your company had $1,464,000 in sales and 23,750 man hours in the field labor budget, with 10% unbilled factor, the math looks like this:

1,464,000 sales / 23750hrs X (1-10%)

1,464,000 / (23750 x .9)

1,464,000 / 21,375 = 68.49

Which equals $68.49.  What that means is, the average revenue per hour on your jobs needs to be $68.49 per man hour in order to hit your sales budget.

Note that the average revenue per hour for maintenance work will be a lot lower than the average revenue per hour for construction installation work.  Here are some averages:

Remember that maintenance jobs have a lot less material and therefore don't produce as much total revenue (sales) per man hour as construction/install jobs.

What is my company capacity? How is that calculated?

Your company capacity can be best defined as this:

Company capacity is what your company should earn in revenue, if it accurately estimated all its job costs, and finished its jobs on-time.

Your next question is likely, "Well, how do you know that?".  The answer is in your own numbers.

To calculate your company's capacity, we need one number that's not in you budget - what's your average chargeout rate per hour.  What we're looking for here is "On average, what's your hourly rate for labor that you charge your customers?"  The industry average is somewhere between $35/hr and $50/hr depending on the type of work and the location/region of the contractor.

To calculate your company capacity, we do this:

1. Assuming you charged all your labor hours correctly - your field labor budget tells us how many "crew" or "billable" field hours are available, so we multiply that number by your average hourly rate to estimate what you should earn in revenue from labor.  (Total field hours x Average Chargeout Rate/Hr = Total Potential Revenue From Labor)
2. Next, you should also recover your equipment costs in your estimates, and recover some overhead and profit on those as well.  So we take your equipment costs, add the overhead you should add (using whatever overhead recovery method your selected) and then add the net profit that the budget is targeting to estimate what you should recover from your equipment (Equipment Costs + Overhead Markup on Equipment + Budget's Net Profit Margin)
3. Next, you should recover all your material costs in your estimates, so we take your material cost total, add overhead and profit - using your budget's overhead recovery system and target net profit to calculate what you should earn in revenue from installed materials  (Material Costs + Overhead Markup on Materials + Budget's Net Profit Margin)
4. Repeat the same for your subcontractor costs  (SubcontactorCosts + Overhead Markup on Subs + Budget's Net Profit Margin)
5. Finally - add equipment rental costs, plus profit (Equipment Rentals + Budget Net Profit Margin)

And there you have it.  Those are all your job costs.  If you markup those job costs, the way you are supposed to, for overhead and profit, you will arrive at your capacity - what you should earn in revenue based on your costs.

Your efficiency rating is your Forecast Sales divided by Your Company Capacity.  Basically it tells you the % of revenue you hope to earn vs. the percentage of revenue you should be earning if your company was firing/estimating/executing on all cylinders.  The difference between your capacity and forecast revenue is waste and inefficiency.

Realistic, profitable companies tend to fall in between 80% and 87% efficiency.  Really productive efficient companies are between 87% and 95% efficient.

What if my efficiency is more than 100%?

That's saying your sales goal is greater than your job costs + the right overhead and profit.  You'd have to, on average, charge more than LMN is telling you to charge to hit that goal.

It might be realistic if you do all kinds of plant material/irrigation/lighting work.  Profit margins in those sectors tend to be greater than average, however we'd be likely to recommend that take a more conservative sales goal.  It's not very likely that you'll recover every job cost at the right price and finish every job on time or under budget!

What if my efficiency is less than 80%?

Somehow, you're not charging for 20% (or more!) of your job costs.  This can come from any of the following: 

• too many unbilled hours/too many payroll hours not producing revenue
• consistently going over budget on estimated hours  (either because the estimates are too aggressive or your crews are too slow)
• estimators consistently missing job costs (such as disposal costs, delivery charges, materials, equipment costs)
• not charging enough for overhead 
• guesstimating
• square foot pricing
• unit pricing for materials (e.g. cost of the material x 2.5)

How do I know if a cost should be in my Overhead Budget?

If you don't include this type of expense when you're estimating, it should be in your overhead budget.

There are only 2 ways to recover an expense in your estimates.

1. It's built into the cost of a line item calculated in your estimates (e.g. 100 labor hours or 1200 sq. feet of pavers)
2. It's recovered in the price you charge for the items that you estimate (and overhead markup is a part of your price)

So for expenses that you don't include in your estimates, they have to be part of your overhead budget so that they get recovered in the price you charge for your estimated costs.

Common examples include:

• Building/yard/shop rent
• Utilities
• Cell Phone/Internet
• Software/Computers
• Office Wages/Salaries
• Meals + Entertainment
• Accounting/Professional Fees
• Advertising
• Insurance
• Overhead vehicles (e.g. the owner's truck, a salesperson's vehicle)
• Small, consumable materials (garbage bags, string line, marking paint)
• Small tools + equipment
• ... and many more

Why don't I enter my payroll taxes (labor burden) costs in my overhead budget?

Labor burden costs are calculated using the Labor Burden % fields at the top of both your field labor and your overhead budget(s).  You can have a different labor burden for overhead staff, since worker's compensation rates may be lower.

By doing it this way, LMN will automatically calculate the forecast costs of your field labor burden by adding that percentage to the wages you enter.  This makes it far easier to budget for payroll costs. Otherwise, everytime you changed the # of payroll hours or a wage, or added an employee, you'd have to go back to overhead to recalculate your forecast labor burden expense totals.

You can see how much labor burden is being accounted for your field staff in the tiles at the top of the field labor budget.

The overhead budget also adds the labor burden costs using the labor burden % at the top of the overhead budget.

What If An Employee Works Both in Field and in Overhead?

This is a fairly simple situation, once you decide how you're going to split their time.  You're going to enter the employee in both budgets, but the important part of this problem is deciding how many hours to put in one budget vs. the other.

TIP:  Remember to only include the hours you will include in your estimates (estimated hours) in the field labor budget!  If you have a supervisor that works in the "field" but you don't include their time on estimates - they are overhead, not field labor!

Here's how to split an employee's time:

1. Decide how many hours you can recover of their time in estimates
2. Enter the estimated hours, and cost of wages in the Field Labor Budget
3. Enter the remaining cost of wages in the Overhead Budget (Wage Section)

Here's an example:

Jake is an owner-operator who works in the field "on the job" sometimes, but you also do all kinds of "office" work, like selling, estimating, managing, etc.  

• Jake starts by estimating how much of his time he is going to recover by including those hours in estimates.  He guesses about 25 hours a week, 36 weeks a year.  (Total:  900 hrs per year)  Jake also estimates that he works about 2500 hours per year (he is an owner!), so he estimates about 36% of his total hours.
• Jake enters himself in the Field Labor budget.  

• For Hourly Employees:  Jake enters 900 hours in the field labor budget, and a rate of $28/hr (the rate he wants to pay himself for "field hours")
• For Salary Employees:  Jake enters 900 hours in the field labor budget (salary section) and then enters 36% of his desired annual salary.  If Jake wanted to make $70,000 per year, he'd enter $25,200 (which is $70,000 x 36%) in the field labor budget

• Jake still needs to be compensated for his "non-estimated" hours, so he enters the remainder of his annual wage in the Overhead budget.   If Jake wanted to make $70,000 per year (total) and he'd already included $25,200 in the field labor budget, then is overhead wage budget must be $44,800.

Should Disposal Fees Go In My Material Budget?

Typically, yes.. but disposal fees often belong in both your material budget and your overhead budget.

So while most companies do charge disposal fees to some jobs - there is almost always waste/disposal brought back to the yard that is not recovered in estimates and therefore must be in your overhead budget.

So most companies:

• Have a disposal line in their material (COGS) budget which is where the expense costs for disposal bins etc. hired out specifically for jobs
• Have a disposal line in their overhead budget too - this is where the costs of dumping or hauling waste from the yard is expensed

Why don't I enter my depreciation costs in my overhead budget?

For most companies, depreciation is about how much wear and tear was put on your equipment - and how much it decreased in value.

LMN's equipment budget calculators (found on both the Equipment and the Overhead budgets) calculate the average amount of annual depreciation for your trucks and equipment and therefore you shouldn't include your accountant's depreciation in your overhead budget.  

Depreciation is already built in to your equipment budget, your overhead budget, and your equipment cost calculators (both hourly and daily rates).

Example:  Depreciation In Your Equipment Budget

Example:  Depreciation In Your Overhead Budget

Can I Include All My Fuel and Repair In My Equipment Budget?

Almost definitely not. Although most of your fuel/repairs can be recovered when you estimate jobs (the hourly/daily rates the LMN calculates for your equipment include fuel/repair/insurance/etc) you almost certainly put fuel/repairs/etc in overhead vehicles/equipment (like the owner's truck!)

Estimate how much fuel goes to field vs. overhead and then put fuel/repairs/insurance in both field and overhead.

Example:

Jake runs a landscape company.  He never includes costs for his own truck in estimates, but his company has 4 crew trucks that he can estimate to jobs.  Since 1 out of 5 of his trucks are "overhead":

• Jake puts 80% of his forecast fuel/repair/vehicle insurance costs in his Equipment budget.  These costs will get recovered in Jake's estimates as part of the hourly/daily costs and prices calculated for his crew trucks.
• Jake puts the remaining 20% of his forecast fuel/repair/vehicle insurance costs in his Overhead budget.  These costs will get recovered as part of each job's overhead markup, since Jake does not include his truck, or its costs, when he's estimating jobs.

Note:  You can treat all your fuel/repair/insurance/etc as an overhead cost, if you prefer.  However, if you do this, do not include the costs of fuel/repair/insurance in LMN's equipment catalog cost calculator.  If you do, you will be recovering those costs twice, and are likely over-pricing your estimates.

Example:  LMN's Equip Cost Calculator when Fuel/Equip/Repair are in the Equipment budget 

Example:  LMN's Equip Cost Calculator when all Fuel/Equip/Repair costs are in the Overhead budget

Does equipment I have at the yard and trucks like the owner's truck or sales vehicles go in the equipment budget?

No, these types of equipment go the overhead budget.  The reason:  you wouldn't include these pieces of equipment in an estimate.  

Because you're not estimating this equipment, it's not getting recovered directly in estimates therefore it must be in your overhead budget so that these costs get recovered as part of your overhead markups.

If you accidentally included it in your equipment budget, don't worry - it's easy to fix!

Simply go into your equipment budget and click the ACTION button beside the equipment that you put in equipment instead of overhead.  Choose the option to Move to Overhead and it will automatically move it to the equipment section of your overhead budget.

Is temporary or temp labor, Field Labor or a Subcontractor?

Temporary (temp) labor should be considered labor and not a subcontractor.  The reason is the markup.  Temp labor is priced like labor... you might pay staff $15/hr for their labor, but you'd charge them to your customers at a high markup - something like $40/hr.

A subcontractor is used when markups are small.  For instance, your subcontractor charges you $1200 for a job, and you charge them to your customers for $1350.   Subcontractors typically have a small markup like 5%-20%.

TIP:  When entering temp labor, remember that the labor burden (payroll tax, workers comp, unemployment insurance, etc.) is likely already included in the hourly rate you pay the temp agency.  So, when entering temp labor, you should deduct the rate you're using for labor burden from the hourly wage of your temp staff so that you don't count on labor burden for temp help.

For example:

1. Your temp labor agency charges you $15/hr for temp help and all payroll taxes etc. are included in that rate.  
2. You entered 20% as your labor burden in your field labor budget
3. Divide $15 by 1.20 (which is 1 + 20%) to get their labor rate before labor burden = $12.50
4. Use $12.50 for your wage rate for temp labor in your field labor budget because your field labor budget will automatically add the labor burden (20%) on all field labor.  Now you'll be budgeting for the accurate $15/hr.

How Should I Budget If We Do A Mix of Union/Non-Union Work?

When setting up your Labor Budget with a mix of unionized and non-unionized field staff, you would need to make your best effort to forecast how much unionized and non-unionized work you will produce. 

• If your mix of unionized work is either closer to 100 percent or a very low percentage, you can move forward with 1 (ONE) budget.

OR

• If this is not the case, we would recommend creating 2 (TWO) separate budgets for the following reasons:
• if your mix of work leans heavily towards unionized work, the overhead markup for labor on non-unionized work would be significantly higher since the wages would be lower than unionized work
  
  
• if your mix of work is closer to 50/50, you will find that your price on labor would be too high on unionized work and too low on non-unionized work (meaning you would need to recover more via overhead). 

What's a typical goal to increase sales by? 

The size of your company really dictates 'typical' sales growth. 

10% growth for a $10M company would be an increase of $1M - and would require three or four new crews, trucks and likely some level of sales/management to get there.

10% growth for a $300K company is just a few new jobs - and could likely be done without the need for any more hires, equipment, or overhead expenses.

There is no one-size-fits-all goal for companies.  Start with a reasonable, realistic goal, then fill in the rest of your budget.  Your profit and loss summary will help you decide whether you need to grow more aggressively or not.

What if I don't know what my sales will be?

Forecasting your sales goals is a bit of an 'educated guess'.  No one knows exactly what their sales are going to be, but the more experience you have - the better you get at guessing.

If you're just starting your budget - don't worry about this too much yet. When you're finished your budget - you'll know whether your goals are high enough to be profitable - or so high that they're unrealistic.  In the meantime, just keep these tips in mind:

• Be realistic - falling short of your sales goals will mean falling short of your profit goals too.  You don't want that.
• Don't be too pessimistic - If you're too conservative, your overhead markups will end up high - as you'll try to recover all your overhead on a small sales goal.  This will make your pricing more expensive than it needs to be.

Do your best to set a realistic target, then finish your budget.  When you review your forecast Profit / Loss at the end, you'll be able to dial in your sales goal much more accurately.

... then you just have to hit those goals!

How detailed should I break down my sales goals?

Many companies like to break down their sales budget by setting smaller sales goals for each division.  Something like:

If you want to setup your sales budget this way, that's great.  Just don't get too detailed.  Trying to forecast 25 different revenue streams is confusing and unnecessary.   Try to group work-types together so you're forecasting 1-5 different revenue streams to arrive at your company total.

Note: If you really want to forecast 25 different revenue streams - go for it - LMN can handle it - but it will likely make things more confusing (and more work) than it needs to be.  You won't be splitting your overhead into 25 different segments, so it's not important to break your revenue down by each and every segment, like you might do in accounting.

Can I copy my budget?

Copying a budget is the easiest way to create your 2nd, 3rd, and subsequent budgets.   You've already entered all your labor, equipment, overhead, etc.  All you need to do is edit the numbers to build new forecast(s).

To copy a budget:

1. Open the budget you wish to copy
2. On the first tab (Budget Info), click the Copy button

   

    

   Enter a new Budget Name and you'll have a 2nd copy of your original budget ready for modification.

How do I archive a budget?

If you require further assistance, please contact our Support Team via email at support@golmn.com or reach out to us through our Live Chats feature or by Phone: (888) 347-9864!