Benchmark Overhead

Before we compare your studio's overhead to the benchmark, please answer the following questions:

Is your studio home-based or retail-based?

Home-based
Retail-based

Do you use accounting software (like Quickbooks or SuccessWare) to manage your studio's financials?

Yes
No

Step 1 - Deposits

Add up your annual deposits from your bank statements and enter them in the field below.

If you use Quickbooks, you will want to have a "Standard Profit & Loss Statement open set to the period that you are analyzing."

Step 1 - Sales

Enter your total annual sales in the field below.

Step 2 - Sales Tax

Total the amount of annual sales tax payments made during the analysis period and enter them in the field below. If you use your accounting software to create invoices and calculate sales tax, then skip this step. Otherwise, total the amount of annual sales tax payments and enter them in the field below.

Step 3 - Refunds

Total the amount of annual client refunds you paid and enter them in the field below.

How much can you afford to spend in Overhead Annually?

How much are you currently spending annually in Overhead?

Overhead is a critical Benchmark for your business, because it has a direct effect on your studio’s profitability. A healthy business needs to keep these ongoing costs under control and should not exceed the recommended Benchmarks.

Here’s a short list of key Overhead expense items.  Enter how much your studio spends annually for each of the following and get the answer you need:

Step 1 - Building Maintenance

Total the amount you spend on building maintenance and enter it in the field below. 

Building maintenance includes:

  • cleaning, repairing and landscaping the studio
  • alarm system service, trash removal and pest control

Building maintenance DOES NOT INCLUDE the following:

  • repairs and maintenance on computer equipment or camera equipment

Step 2 - Real Estate Taxes & Mortgage Interest

If you own your building and you do NOT pay rent to yourself, total the amount of real estate taxes and mortgage interest you paid on the building and enter it in the field below.

Step 3 - Rent

Total the amount you pay yourself or a third party rent for your studio and any amount you pay for storage rent and enter it in the field below.

Step 4 - Insurance

Total the amount you paid in insurance, including general liability and property insurance and enter it in the field below.  DO NOT INCLUDE the amounts you spent on auto, health or workers compensation insurance.

Step 5 - Utilities

Total the amount you paid in expenses such as gas, electric and water/sewer and enter it in the field below.  DO NOT INCLUDE telephone or internet charges.

Confirm Your Information

Income

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Overhead

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Here's how much you can afford to spend monthly and annually in Overhead for your studio, given your current level of annual sales:

Here's how much you now spend annually in Overhead:

  Overhead Benchmarks
  Your Studio
 PPA Recommended All Studios Top Studios
Total Overhead Costs as a Percentage of Your Sales % % %
Your Maximum Annual Overhead Costs -
Your Maximum Monthly Overhead Costs -

 

Summary

If your Overhead expenses exceed the Benchmarks, your studio's bottom line profitability will be adversely affected.

What is your actual Overhead?

These are the types of expenses you'll need to consider as overhead expenses:

  Building Maintenance
Includes cleaning, repairing, landscaping, alarm system service, trash removal, pest control
Real Estate Taxes & Mortgage Interest
If you own your building and you do NOT pay rent to yourself.
Rent
If you pay yourself or a third party rent for your studio and any amount you pay for storage rent and enter it in the field below.
Insurance
Includes general liability and property insurance

Utilities (Does not include telephone/communications expenses)

If your Overhead exceeds the Benchmarks, your studio's bottom line profitability is adversely affected.

A key finding of PPA's latest Benchmark Survey is that the ability of a studio to control its costs (including Overhead) was the prime factor in deciding bottom-line performance for both home and retail studios. Learn more about strategies for controlling costs - and improving your bottom line - in PPA's Business Handbook.



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