This guide walks you through building an LMN Operating Budget end to end—covering Budget Info, Sales, Field Labor, Equipment, Materials, Subcontracting, Overhead, Profit/Loss, Overhead Recovery, and Analysis. You’ll set Work Breakdown percentages to drive industry‑average benchmarking, forecast division sales, configure labor burden and overtime, calculate equipment recovery with owned/leased/group equipment calculators, and enter materials and subcontracting forecasts. In Overhead, you’ll separate expenses, wages, and overhead equipment, then review Profit & Loss to verify margins and totals. Finally, choose an Overhead Recovery method—MORS (recommended), FLH, or SORS—analyze KPIs like Revenue per Man Hour and Capacity, and activate the budget so estimates price against it.
In this article:
The Budget Information Page
Navigate to: Budget > + New / Edit
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BUDGET INFO The Budget Info panel gives a snapshot of the budget’s key targets and status: the Quick Summary lists your Sales Goal, Profit Goal, and Profit Margin at a glance; Budget History shows the owner and created/updated timestamps; Status indicates whether the budget is currently active; and badges reveal if it’s set as the Standard Default and/or Service Default for estimating, ensuring new estimates price against the correct budget when defaults are configured. | |
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BUDGET PROPERTIES Add your Budget Name and select your Budget Year to begin. The Budget Status will be set to "Under Construction" until you Activate the Budget. Indicate the percentage of work you do in the Work Breakdown fields provided. |
WORK BREAKDOWN The Work Breakdown records what percentage of your sales come from LMN’s fixed divisions (Design/Build/Install, Grounds Maintenance, Irrigation, Snow + Ice). |
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⚠️ Note: We do not view/look at user's LMN data for statistical analysis We originally gathered 6 public, industry studies and averaged out the numbers. We've since vetted those benchmarks with our own experiences. We've taught over 3,000 contractors how to build a budget in our workshops and we've kept an eye on industry benchmark studies as they are released. We continue to re-analyze and update (if necessary) our benchmarks each year to ensure we're supplying the best data we can. Hitting the benchmarks provided doesn't guarantee success or profits, but they're good representations of financially successful companies in the landscape and snow and ice industry. |
Build Your Sales Budget
Navigate to: Budget > + New / Edit > Sales tab
On the Operating Budget’s Sales Budget tab is where division-level revenue is entered and compared year over year.
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SALES Sales mini‑chart: horizontal bars visualize each division’s relative contribution (e.g., Maintenance, Installation, Snow + Ice). |
PREV. VS. FORECAST Prev. Vs. Forecast compares last year’s total sales to this year’s forecasted total so you can see the overall target at a glance. |
CHANGE OVER PREVIOUS Change Over Previous shows the percentage increase or decrease of the forecast versus the previous year. |
Division Sales Table columns defined:
Acct. ID |
Division |
Previous $ |
Forecast $ |
% Diff |
Comments |
| Optional accounting code for each sales line; use this to align LMN divisions with your accounting system’s account IDs if you track them externally. | The name of the revenue stream you’re budgeting (e.g., Landscape Installation Sales, Maintenance, Snow + Ice). | Last year’s actual (or prior period) sales for that division; used for year‑over‑year comparison on this page. | Your target sales for the budget year; this is the key driver value LMN uses across the rest of the budget and analysis. | The calculated percent change between Forecast $ and Previous $ for that division. | Free‑text notes for context or assumptions behind the forecast for each line. |
Sales Forecast Information
The key number in the Sales Budget is the Forecast, which will indicate your Forecast Sales for the budget year; Your Previous numbers would be from the year prior.
Sales Forecast Tips
💡 We recommend breaking your sales down by Division Type (see screenshot below).
💡 If you use an accounting software and wish to add your Account IDs to your LMN Budget, use the Acct. ID field provided.
💡 Include all cash sales in your LMN budget - even if you don't report those sales in your accounting. Without cash sales, your numbers and profit margins, will be inaccurate and will cause pricing errors.
💡 Review the Forecast Sales in the middle tile at the top of the sales budget. Make sure your forecast is realistic. Being too aggressive, or too conservative can lead to mistakes in pricing.
💡 Don't worry about creating a perfect budget right away. When you get to the Analysis Tab of your budget, you will have a chance to review and edit if desired. Even after a budget is activated, it can still be updated.
💡 Use your Sales Budget as a tool for setting up the default profit margins for your estimates. If your budget's net profit is set to 4%, then your estimates will default to 4% as well.
💡 By setting your sales budget to achieve a specific net profit, you'll make sure your estimates' pricing defaults to the same net profit.
💡 If you do not want to adjust your sales goals as they stand, you can add a new line to your sales tab, called Adjustment to indicate the adjusted sales amount used to increase your profit margin, as shown below.
Create your Sales Budget Video
To view a video tutorial on creating your Sales Budget, click HERE
Build Your Field Labor Budget
Navigate to: Budget > + New / Edit > Field Labor tab
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KEY FACTORS Labor Burden: Percent added to raw wages to cover payroll taxes, workers’ comp, unemployment insurance, vacation/paid time off, etc. You set the burden percent here so LMN can add it to wages when calculating Field Payroll. Overtime Multiplier: Factor applied to overtime hours when computing wages (commonly 1.5×). Adjusting this updates the wage math in the table and summary. |
FIELD LABOR SUMMARY Total Hrs: Sum of all regular hours across listed roles and headcounts. Total Wages: Dollar total from regular hours + overtime hours at the set wages and OT multiplier, before burden is applied. Total Burden: Dollars added by applying the Labor Burden percentage to total wages. Field Payroll: Combined cost of wages + burden (equals Total Wages + Total Burden). |
FIELD LABOR RATIO Your Ratio vs Industry Avg: Shows your field labor spend as a percent of forecast sales compared to an industry benchmark to flag over/under-spend trends. |
| HOURLY FIELD STAFF tab | |
| Employee Type | Role-based lines (e.g., Install Foreman, Maintenance Labor). Best practice is to enter roles, not individuals, to simplify maintenance and protect pay privacy. |
| # Staff | Headcount for that role; LMN scales hours and wage math by this number. |
| Hrs/Yr (Ea) | Regular hours per person per year used for wage calculations and capacity planning. |
| OT Hrs (Ea) | Overtime hours per person per year, costed at the Overtime Multiplier. |
| Avg Wage | Average base hourly wage for the role; LMN uses this with hours and OT to compute wages. |
| Bonus | Optional annual bonus per person; included in the wages total for the role. |
| Wages/Yr | Computed dollars for the role line, factoring # Staff, regular and OT hours, Avg Wage, OT Multiplier, and Bonuses; rolled up into Total Wages in the summary cards. |
| Row controls | Use the Action menu to edit/delete lines and the New button to add additional role lines. |
SALARY FIELD STAFF tab | |
| Employee Type | The role title for this salaried field position (enter by role, not by individual person). |
| # Staff | Headcount for this role; LMN multiplies salary and bonus by this number to compute the total wages for the line. |
| Ann Hrs (Ea) | Expected annual hours per person; used for capacity and analysis (e.g., Revenue per Man Hour). |
| Ann Salary (Ea) | Base annual salary per person for this role; drives wage calculations for the line. |
| Bonus (Ea) | Optional annual bonus per person; added to salary when calculating the line’s total wages (leave as 0 if unknown). |
| Ann. Wages | Computed total wages for the line = (# Staff) × (Ann Salary + Bonus); LMN adds your Labor Burden elsewhere to arrive at total Field Payroll. |
Field Labor Information
- Make sure you've added Field Labor Burden % to budget for payroll taxes, worker's comp fees, and unemployment insurance (national average is between 15% and 25%). Unsure how to calculate your Labor Burden?
- If you pay overtime, ensure you have selected the correct Overtime Multiplier.
- Make sure you've only included staff whose time you estimate on jobs! (e.g. crew leads, crew members, lead hands, operators).
- Try to be general when adding your Employee Types - we suggest breaking this down by Employee Role as opposed to adding individual staff members by name.
- Average your staff wages out to have one line for each position type in your company (e.g. Construction - Crew Lead, Maintenance - Laborer, etc.)
- We have two options for staff on this page: Hourly vs. Salary (see more information above ^). Make sure you add any staff who are paid by the hour to the Hourly Field Staff area and any staff who are on salary to the Salary Field Staff area. You can click on the header to switch between the two pay types.
Field Labor Tips
💡 Make sure you have not included anyone whose time you do not include on estimates (e.g. mechanics, office admin, estimators). Have a staff member that divides their time between the field and the office?
💡 Check your payroll hour forecasts. Compare it with last year's payroll records for accuracy. If your forecasting significantly more sales, make sure you're budgeting for more payroll hours to get the increased work done. You may need more staff and/or more hours.
💡 Check wages for updates. If you plan on raise(s), make sure they are in your budget.
💡 Unsure if you will be giving bonuses? Leave as zero for now.
Field Labor Budget Video
To view a video tutorial about creating your Field Labor Budget, click HERE
Building Your Equipment Budget
Navigate to: Budget > + New / Edit > Equipment tab
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GENERAL EXPENSES Enter forecasted non‑itemized equipment costs: Forecast Fuel, Forecast Repairs, Insurance + Misc. |
EQUIP SUMMARY Breaks out Equipment Expenses (from the grid below), “Plus Other” (the General Expenses above), the resulting Total Equip Expenses, and a separate field for “Plus Equip Rentals.” |
EQUIPMENT RATIO Compares your equipment costs as a percent of forecast sales (“Your Ratio”) to the industry average for benchmarking. |
Equipment Table Defined
| Equipment Type | Name of the asset or kit (e.g., Backhoe loader, Crew Truck, Trailer packs). Each row represents one type you recover through estimating. | |
| Qty | How many of this equipment type you’re budgeting; LMN uses this to scale annual costs for the line. | |
| Class | Costing method for the item. Options include: | |
| Owned |
Assets you own or are financing to own. Tips for the Owned Equipment Calculator: |
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| Leased | Assets you lease. Use the Leased equipment calculator for equipment that you lease. (e.g., monthly payment × months in use per year). |
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| Group |
Bundled kits. Tips for the Group Equipment Calculator: |
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| Custom | Use the Custom equipment calculator if you want to enter your own annual equipment recovery costs. | |
| Description | Free‑text notes about the item or group for internal clarity. | |
| Cost/Yr/Ea | The calculated annual recovery per unit for this equipment type, derived from the class‑specific calculator (Owned/Leased/Group). You can open the row calculator to review or adjust inputs. | |
| Total | The annual total for this row (all units of that equipment type). This rolls up into Equipment Expenses in the summary panel. | |
| Action | Row‑level menu for managing the line (e.g., edit or remove). Use the New button below the grid to add additional equipment lines. | |
Equipment Information
- Only include vehicles/equipment that go onsite to jobs. Any other equipment (e.g. owner's truck, a loader at the yard, small tools/equip) belongs in the overhead budget.
- In the General Expenses section, make sure you do not include 100% of your costs. Some of your fuel/repairs/insurance/other goes to overhead vehicles. Estimate the % you should assign to your equipment budget vs. the % you should assign to your overhead budget. (e.g. if you spent $25,000 in fuel and you have 1 owners truck and 4 crew trucks, you might allocate 80% of fuel to your equipment budget and 20% to your overhead budget).
- Do not forget to include a forecast for Equipment rentals in the Equip Summary.
Equipment Tips
- You should budget for all of your equipment, even if it's "paid off". You should be charging your customers to use it and saving to replace it.
- Remember - your budget is a forecast. If you plan on buying more equipment this year, you should include that equipment in your budget.
If I own my equipment & have no payments, do I still need to include it in my budget?
Absolutely. One of the biggest mistakes contractors make is not charging for equipment they own.
Once equipment no longer has any payments, it doesn't show up as a 'cost' anymore on the books. When it stops showing up as a cost, many contractors fail to charge for it.
The consequences are predictably terrible.
- You are giving away one of your biggest assets to people you barely know! (your customers)
- Your profits are paying for the fuel, repairs, etc. incurred in operating the equipment
- You are not recovering any money to replace the equipment when its run out of useful life.
This results in equipment that gets old, breaks down often, causes all kinds of wasted hours and inefficiency and worst of all, the contractor is often stuck with this older equipment because they don't have the cash-on-hand to replace the equipment without payments.
It's essential that you include equipment recovery costs in your budget to ensure your customers are paying for the use of your equipment, and that you can afford to equip your crews with the most efficient vehicles and equipment for the job.
Equipment Budget Video
To view a video tutorial to create your Equipment Budget, click HERE
Build Your Material Budget
Navigate to: Budget > + New / Edit > Materials tab
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KEY FACTORS Material Tax: Enter a material tax percent only if you pay tax on material purchases and those tax costs are not already included in your totals; LMN will factor this into material costs. |
MATERIAL SUMMARY Shows Previous Total and Previous Ratio, plus Current Total and Current Ratio, so you can see dollars and percent of sales for materials year over year. |
MATERIAL RATIO Compares Your Ratio (materials as a percent of sales in your budget) to the Industry Avg benchmark. |
Materials Table Defined
| Acct. ID | Optional accounting code to align each material expense line with your accounting system. |
| Material Expense | The category or description for the material cost (e.g., Installation, Maintenance, Snow + Ice, Disposal). |
| Previous $ | Last year’s actual (or prior period) material spend for that line, used for comparison. |
| Forecast $ | Your budgeted material spend for the current budget year; this is the figure LMN uses in totals and ratios. |
| % Diff | The percentage change between Forecast $ and Previous $ for the line. |
| Comments | Free‑text notes to document assumptions or context for each line. |
| Row actions | Use the Action menu to manage a line, and the New button to add additional material expense rows. |
Material Information
Most companies can leave the Materials Tax section at 0% because sales taxes paid on materials are already included in their accounting totals for material spending last year. Only use the material tax section at the top if:
- You pay sales tax on all materials AND
- The cost of sales taxes are not included in your forecast amounts.
- Similar to your Sales Forecast, we recommend breaking your Materials down by Division Type:
- The key number in the materials budget is the Forecast which will indicate your Forecast for the budget year. Your Previous numbers would be from the year prior.
Materials Tip
💡 Make sure you're forecasting enough materials to keep up with your forecast sales goal (e.g. if you're forecasting more sales than last year, you're likely going to need to forecast more materials)
Materials Budget Video
To view a video tutorial on creating your Material Budget, click HERE
Building Your Subcontracting Budget
Navigate to: Budget > + New / Edit > Subcontracting tab
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SUBCONTRACTING SUMMARY Shows last year’s totals and ratio (Previous Total, Previous Ratio) alongside this year’s forecasted totals and ratio (Current Total, Current Ratio) so you can see dollars and percent of sales at a glance. |
SUBCONTRACTING RATIO Displays your subcontracting spend as a percent of forecast sales for this budget (e.g., 1.6% in the example). |
Subcontracting Table Defined
| Acct. ID | Optional accounting code so each subcontracting line can map to your external accounting system, if used. |
| Subcontract Expense | The category of subcontracting cost you budget for (e.g., Irrigation Subs, Carpentry/Deck/Woodwork Subs, Electrical & Gas Subs, Snow Subcontractors). |
| Previous $ | Last year’s actual (or prior period) spend for that category; used for year‑over‑year comparison. |
| Forecast $ | Your budgeted spend for the current year; this drives the Current Total and Ratio above. |
| % Diff | The calculated percent change from Previous $ to Forecast $ for that line. |
| Comments | Free‑text notes to capture assumptions or context behind a line’s forecast. |
| Row actions | Use Delete on each line to remove a category; click New to add a new subcontracting line to the table. |
Subcontracting Information
- We suggest adding your Subcontract Expense in by type of work (ie. Gas + Electrical, Fences + Decks, etc).
- The key number in the subcontracting budget is the Forecast which will indicate your Forecast for the budget year. Your Previous numbers would be from the year prior.
Subcontracting Tips
💡 Make sure you're forecasting enough subcontractors to keep up with your forecast sales goal (e.g. if you're forecasting more sales than last year, you might(?) need more subs).
💡 If you had a special circumstance last year where you used far more (or far less) subcontracting than ever before, don't budget for the same % of subcontractors unless you think that special circumstance is going to happen again!
Subcontractor Budget Video
To view a video tutorial to create your Subcontractor Budget, click HERE
Building Your Overhead Budget
Navigate to: Budget > + New / Edit > Overhead tab
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KEY FACTORS Sets the Labor Burden percentage specifically for overhead salaries so LMN can add payroll taxes/benefits to overhead wages |
OVERHEAD SUMMARY Rolls up three components—Overhead Expenses, Overhead Wages, and Overhead Equipment—to show your current totals at a glance. |
OVERHEAD RATIO Compares Your Ratio (overhead as a percent of forecast sales) to the Industry Avg for benchmarking (e.g., 22.5% vs 25.6%). |
We have three sections in the Overhead tab: Overhead Expenses, Overhead Wages and Overhead Equipment. You can click on the header to switch between the different Overhead types.
| OVERHEAD EXPENSES tab | ||||||
Acct. ID |
Overhead |
Previous $ |
Forecast $ |
% Diff |
Comments |
Action |
| Optional accounting code used to map each overhead expense line to your external chart of accounts. | The overhead category name (e.g., Marketing–Advertising, Finance–Interest Expenses, Admin–Office Supplies) | Last year’s (or prior period’s) actual spend for the category—used for year‑over‑year comparison and % change calculations. | Your budgeted amount for the current year; this drives the Overhead Summary totals and Overhead Ratio. | The calculated change between Forecast $ and Previous $ for the line (positive or negative) | Free‑text notes to explain what’s included or assumptions for the budgeted amount (e.g., “Credit card interest + annual fees,” “Postage + courier”). | Row menu to edit or remove a line; use the New button to add additional overhead expense rows. |
Overhead Expenses
💡 Your Overhead Expenses should include all non-estimated costs of doing business.
Some examples are as follows:
- Rent/Property Insurance/Property Tax
- Advertising/Website/Uniforms
- Shop-Small Tools, Shop-Consumable Materials
- Software/Computers/Cell Phones
- Professional Fees/Legal/Accounting/Consulting
💡 The key number in the overhead section is the Forecast which will indicate your Forecast Overhead for the budget year. Your Previous numbers would be from the year prior.
💡Your overhead expenses don't always increase/decrease the same as sales. For example, just because you are forecasting 20% more sales, this doesn't mean your utilities or your accounting fees will increase by 20%.
💡Don't include payroll tax, worker's comp, or unemployment taxes in your overhead budget. You have already covered those costs by entering a Labor Burden % on both your Field Labor and Overhead budgets.
💡Don't include Depreciation in your overhead budget. It's typically in your accounting as an overhead line item, but you've already covered your vehicle and equipment depreciation costs in your equipment budget and your overhead equipment budget.
💡Don't forget some fuel/insurance/repairs - you likely included most of those expenses in your equipment budget, but you should have some budgeted for your overhead vehicles as well.
OVERHEAD WAGES tab | ||||
Salary |
Previous $ |
Forecast $ |
% Diff |
Comments |
| The role/title for an overhead staff salary line you’re budgeting (e.g., Office Admin, Designer, Owner office time). | Last year’s (or prior period’s) actual salary dollars for that role; used for year‑over‑year comparison. | Your budgeted salary dollars for the current budget year; this feeds your Overhead totals and ratios. | Automatic percent change between Forecast $ and Previous $ for the line. | Notes/ assumptions for the line (e.g., “adds 0.5 FTE mid‑year”). |
Overhead Wages
💡Make sure you've budgeted for a wage for the owner, even if the owner takes a salary in draws/dividends (instead of a typical paycheque). You still need to make sure the owner's salary is being covered in your estimate pricing, no matter how the owner draws their salary!
💡If you don't pay payroll tax/worker's comp/employment insurance on the owner's wages, enter the owner's wages as an expense, not a wage
💡Make sure you only include staff whose time is not built into estimates (e.g. mechanics, office admin, estimators). Have a staff member that divides their time between the field and the office?
💡Check your employee wages for updates since the previous year. If you plan on raise(s), make sure they are in your overhead wages budget.
OVERHEAD EQUIPMENT tab | |||||
Equipment Type |
Qty |
Class |
Description |
Cost/Yr/Ea |
Total |
| The overhead asset you’re budgeting for (e.g., owner’s truck, yard loader, shop tools) that is not charged directly to jobs. | How many units of this overhead asset you have; LMN multiplies annual cost per unit by this quantity. | Costing method used by the equipment calculator—Owned, Leased, or Group—so LMN can derive an annual recovery amount appropriately. (See more details below) | Free‑text notes to clarify what’s included in the line (model, purpose, location, etc.). | The calculated annual overhead cost per unit from the selected class calculator (e.g., replacement value over useful life for Owned, or payments × months‑in‑use for Leased). | Line total for this asset type = Qty × Cost/Yr/Ea; rolls into Overhead Equipment in the Overhead Summary. |
Overhead Equipment
💡Include any equipment or vehicles that don't get estimated on jobs (e.g. owner's truck, ops manager or sales vehicles).
💡The Overhead Equipment area will include the same Equipment Calculators as the Equipment area of your budget.
| Owned | Use the Owned equipment calculator for any equipment that you either own outright, or are financing with the intent to own. |
| Leased | Use the Leased equipment calculator for equipment that you lease. |
| Group | Use the Group equipment calculator for groups of equipment that go together (e.g. Maintenance Trailer + Tools). |
| Custom | Use the Custom equipment calculator if you want to enter your own annual equipment recovery costs. |
Overhead Information
- Make sure you've added Labor Burden % to budget for payroll taxes, worker's comp fees, and unemployment insurance (national average is between 15% and 25%) on overhead staff wages. Note that this % can be less than your Field Labor % to accommodate for lower worker's comp payments. Unsure how to calculate your Labor Burden?
Overhead Budget Video
To view a video tutorial about your Overhead Budget, click HERE
Reviewing Your Forecast Profit/Loss
Navigate to: Budget > + New / Edit > Profit/Loss tab
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NET INCOME Your forecasted bottom line for the budget year. Net Income is calculated as Gross Profit minus Overhead. |
PROFIT MARGIN Net Income as a percent of Total Revenue; formula: Profit Margin = (Net Profit ÷ Total Revenue) × 100. |
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Sales Revenue
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Cost of Goods Sold
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Overhead
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Profit
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| Column legend | |
| Name/Category | The sales, cost, or overhead line being summarized. |
| $ Amount | Forecasted dollars for the current budget year, feeding the totals and ratios on this page. |
| % | The line’s percentage of Total Revenue, useful for benchmarking mix and margin. |
| Edit | Shortcut to the source budget tab to adjust inputs that drive the value on this line. |
Profit & Loss Video
To view a video tutorial about reviewing your Profit & Loss, click HERE
Overhead Recovery
Navigate to: Budget > + New / Edit > OH Recovery tab
Overhead Recovery in LMN uses your real company inputs to tailor how overhead is recovered in estimates so your pricing covers the true cost of running the business. On the budget’s Overhead Recovery tab, choose one of three industry‑standard methods—SORS (Single), FLH (Field Labor Hours), or MORS (Multiple)—as the active method for that budget. If you use divisional budgets, each division can select the recovery method that best fits its work mix, allowing different methods by division when each has its own budget.
| MULTIPLE OVERHEAD RECOVERY (MORS) - RECOMMENDED | |
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Concept: Applies different overhead markups to each cost type. Materials/subs/equipment usually get lower markups because they’re easier to manage; any remaining overhead is recovered through a higher markup on labor, which is hardest to control. Why recommended: LMN recommends MORS and sets it as the default because it spreads recovery across all cost types and aligns with industry practice inside LMN budgets. | |
| Forecast Overhead Costs | The total annual overhead the budget needs to recover. |
| Labor Markup (%) | Percent added to labor costs in estimates to recover a portion of overhead. LMN calculates labor’s share to pick up any remainder after the other cost-type markups. |
| Equipment Markup (%) | Percent added to equipment line items for overhead recovery; editable. |
| Material Markup (%) | Percent added to materials for overhead recovery; editable. |
| Subs Markup (%) | Percent added to subcontractors for overhead recovery; editable. |
| FIELD LABOR HOUR OVERHEAD RECOVERY (FLH) | |
| Concept: Recovers all overhead directly in the labor rate by dividing forecast overhead by forecast field labor hours to produce a $/hr overhead adder. | |
| Forecast Overhead Costs | Total overhead to recover. |
| Forecast Labor Hours | Total budgeted field labor hours for the year. |
| Field Labor Hour Markup ($/hr) | Computed overhead per labor hour = Overhead ÷ Labor Hours (e.g., $14.26/hr). |
| SINGLE OVERHEAD RECOVERY FACTOR (SORS) | |
| Concept: Uses one blended overhead percentage applied across all job costs to recover overhead with a single factor. | |
| Forecast Overhead Costs | Total overhead to recover. |
| Forecast Job Costs | Sum of all forecasted direct costs (labor, equipment, materials, subs, rentals) used to compute the single factor. |
| Single Overhead Recovery Markup (%) | Computed overhead percentage = Overhead ÷ Job Costs (e.g., 33.3% in the example). |
Overhead Recovery Tips
💡You can run different overhead recovery methods by division as long as each division has its own budget (each budget selects its own recovery method).
💡All three methods (MORS, FLH, SORS) are available in both Operating Budgets and Express Budgets; in Express you also choose the overhead recovery method, with MORS typically recommended.
💡The Overhead Recovery settings live on the budget’s Overhead Recovery tab and determine how estimates that reference that budget recover overhead; you choose one active method per budget at a time.
Overhead Recovery Video
To view a video tutorial about Overhead Recovery, click HERE
Analyzing Your Budget
| 🎥 Budget Analysis Tool Fundamentals Academy Video | ← Click the link and watch the video. In this video, we're going to show you how to analyze your budget in LMN. |
| Once you watched the above video, get started with the Budget Analysis tool on your LMN account: | |
| 🎥 Budget Analysis Tool - Tool in Action Video |
← In this video, we'll cover:
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The Analysis Tab of your Budget
Navigate to: Budget > + New / Edit > Analytics tab
The Analysis Tab of your budget has multiple areas which will prove useful when completing your LMN Budget. Please see these areas explained below.
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WHERE IS MY REVENUE GOING? A pie chart breaks total revenue into six slices: Profit, Wages, Equipment, Materials, Subs, and Overhead, each with its percent of sales for quick mix analysis. |
REVENUE PER MAN HOUR Shows the target average price per billable hour you need to hit your sales goal (e.g., $81.32/hr). Enter your % Unbillable Hrs to adjust the benchmark; description reminds you to divide total job price by job man‑hours to compare estimates to this target. See more tips below. |
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CAPACITY/EFFICIENCY Enter an Avg. Chargeout Rate/Hr to calculate your company’s theoretical Capacity based on budgeted costs and hours; the Efficiency bar visualizes how your chargeout rate compares to the rate implied by the budget. See more tips below. |
BUDGET THROUGHPUT Displays total Throughput (Sales minus Materials, Rentals, and Subs) and Throughput per Hour (Throughput divided by billable field labor hours) to highlight how effectively costly resources are turned into revenue. |
Revenue Per Man Hour Tips
💡Revenue per Man Hour is a suggested total selling price for all labor, materials, equipment, subs, overhead and profit on a job.
💡This will not affect your estimate numbers. It will instead serve as a suggested benchmark based on the numbers you have indicated in your budget. Your actual Revenue per Hour will be displayed on the Dashboard tab for your Estimates.
💡Revenue per Man Hour is calculated within your Budget using your Forecast Sales Revenue divided by the Total Hours indicated in your Field Labor tab, minus the percentage of % Unbillable Hours you indicate below.
💡% Unbillable Hours would be for loading/unloading, drive time, onsite internal meetings, etc.
Revenue Per Man Hour Video
To view a video tutorial about Revenue Per Man Hour, click HERE
Capacity/Efficiency Tips
💡Your company's Capacity/Efficiency will be calculated once you add an Average Chargeout Rate/Hr.
💡 The Company Capacity is what your company should be able to earn in revenue based off of your Forecast Job Costs.
Capacity/Efficiency Video
To view a video tutorial about Capacity/Efficiency, click HERE
Budget Ratio Analysis
- The Budget Ratio Analysis will compare your COGS Ratios to the Industry Averages.
- Industry Averages for your account are determined based on your Work Breakdown indicated on the Budget Info tab of the budget.
- The Budget Ratio analysis will provide you with suggestions on how to update your numbers if your Ratios differ (more than 2%) from the Industry Averages.
✅ Once you are comfortable with the information displayed in your budget, you can Activate it by clicking on the Activate button shown below!
Need more help? Contact our Support Team by email at lmn-support@granum.com, through Live Chat, or by phone at (888) 347-9864
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