The Jobs Budget worksheet — tab 4 — brings it all together; it’s where you determine a month-by-month project revenue budget (Figure 3). Note that we’re showing revenue in the month it’s recognized; jobs that take longer than a month have to be sold and started long before you show the revenue.
After you've entered income and overhead data in previous worksheets, the Jobs Budget worksheet uses your historical mix of projects along with your projected overhead and income requirements for the budget period to suggest a mix of projects for the coming year. You can then tweak the mix and spread the jobs by month and quarter to establish your income baseline.
Sections A and B are fed from the income and overhead worksheets. Section C suggests a mix of job types that will satisfy your overhead; the number of each job type is based on company history. Again, as you budget you can either accept last year’s numbers or tweak them in the green cells.
If you think you’ll see major changes in the mix of work for the next year — like dropping large-project remodeling altogether and tripling your handyman operation — don’t tweak anything here. Instead, save a copy of the entire workbook so that you preserve your historical data, and then modify the income worksheets in the copy to reflect the mix of work you’re expecting for the coming year.
Planning for profit. Section D is where the rubber meets the road. D1 simply compares your overhead from last year with overhead for the next budget period. The spreadsheet uses conditional formatting to let you know whether your overhead is on the rise or staying under control.
D2 expands on the scheduling I discussed in September. It shows how much overall contribution margin you need to generate hourly, daily, weekly, and so on to keep the doors open. D3 is where you enter your income goal over and above your break-even point — the profit you’re looking for after you’ve covered expenses and paid yourself a reasonable salary. D4 calculates a suggested mix of additional jobs required to cover the additional income you entered above. Again, you can tweak these in the green cells if you like.
Once you’re satisfied with the mix and number of jobs for the coming year, use table E — Budget: Completed Jobs by Month — to spread the work across the coming period. If a month or quarter winds up short of the contribution margin needed to meet your income requirements, the cells will turn red to show you exactly where the problems are. Spread your calculated workload in a way that makes sense for your company’s production capacity. In other words, don’t enter 30 repair jobs all in one week if you only have one handyman.
Dealing with long jobs. One thing I need to emphasize is that this workbook calculates recognized income. That’s different from when you sell or start jobs. Big jobs like room additions, custom kitchens, and new homes are not going to provide the total of their contract revenue in the month you sold the job. To deal with that in table E, simply enter the job income as fractions (Figure 4). If you budgeted one new home that will be started in April and will take five months, don’t put a “1” in August; instead, enter fractions in the preceding months that match your draw schedule.
Income from long jobs like new homes should be entered using percentages that match your draw schedule. In this example, April shows a 10 percent down payment (.1), with draws of 20 (.2), 25 (.25), and 35 (.35) percent in May, June, and July, and a final completion payment of 10 percent in August.