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From: Lance (Accounting Points for Service Businesses)
Date: 03 Apr 2003
Time: 03:06:10
What kinds of things effect mobile service businesses P and L’s? Well this is an excellent question and as I see the Annual reports of companies who do mobile services, such as Ecolab, Service Master, Haliburton, Luftstanza Food Services, etc. I see many similarities. For instance we have noted as many of the others the climate conditions, El Nino effects, Mud Slides, road closures, snow. low temperatures, Hurricanes, etc. So obviously; (1) would be extreme weather conditions that affect the demand for such services services, this could be both good and bad. Another biggy is increased competition, So one would wish to point out; (2) competition in the markets served by their Service Businesses. (for instance the Halliburton contract over Schlumberger fo capping Saddams little petty setting fire of oil rigs). Then there are the problems we have encountered in the Silicon Bay area on labor issues during the dot com days. Similarly areas od Denver, Houston, Dallas, Atlanta, LA, Phoenix, Boston, NYC, Philly, Pittsburg, etc. No people to work ful employment and 3.1% unemployment are synonomous. 5% seems to be a good number in any state, it keeps the natives restless and all the work ethic of economies honest, so then we will call; (3) labor shortages or increases in wage rates effect service businesses of every sector. Well what else? Well on everyones mind is health care, underfunded pensions which include health care and increased costs in that industry and the cost assosciated with parasite attorneys suing for ungodly amounts and calling malpractice? Now then we will call; (4) unexpected increases in operating costs, such as healthcare insurance and HMO or perhaps PPO costs. But also realize after 9-11, insurance costs have nearly doubled in every industry. Ours included and the fixed site market participants as well; (5) Insurance Costs increases effect the bottom line as the liberals and attorneys attmept to make all that which is unequal, equal just the same, it is not and never will meanwhile all service business pay the price for these ideals as this country and it's service sector attempt to operate in an ever increasing sate of liberalist socialism. Did I say that? Yes, and it is ture, because all this does effect our bottom lines in the service sector and is carried on in increased costs to consumers as an over burden tax on all we are and all we have built in the most free country on the face of this Earth. Enough on that subject. Now let's talk about fuel costs. Yes increased fuel costs effect everyone and very much so in the mobile service sector therefore add (6)fuel prices. The President is right we must be careful of our energy appetites and fuel needs, pay attention this effects everyone and of course the P and L of every service business known to mankind. Well with the thought of transportation costs. Let us discuss the issues of increased traffic and road work delays in most states due to weak budgets bad fiscal policy and general inability to lead, manage and get one worthy piece of legislation that actually helps people out of committee at the state levels, CA being my best example of Hail Marry approach to fix bureaucracy of malfisence, back to the roads (7) traffic. Now lets dicuss the real problem plaguing the service sector, which so far has been the last to be destoryed due to it's very efficient nature and business model, especially the mobile side, although we can also look at Jack Welsh's comments to the board in 2000. Service is the future speech also renumerated to the 6 Sigma clan to be. (8) increased governmental regulation of all sorts. Now we can talk about the general across the board slowing of money flow due to not supply but rate of flow which is actually the same thing since money supply is so reletive really. (9)general economic conditions in the United States, especially as they consumer spending levels. We should also look at what we often discuss as the Chaos Theory, changing direction quickly is very important in the service sector more than anywhere else, as the consumers and Corporations move the direction of their expenditures, they vote with their dollars and must vote for you if you are to have nay kind of P and L at all. so then those costs associated with directional changes, training, marketing and overcoming delays with cash money for speed, ramp up cost money and the faster you go the more you pay. Ask any military commander or any previous commander in cheif, moving things costs money, moving fast is a hyperbolic curve similar to that of co-efficients of drag which is appropos to this particular conversation; (10) time and expenses associated with integrating and winding down businesses; and other factors which cannot be seen or predicted unless you learn to study the game. It may appear to be a game of chance, but chances are it is neither. The strong survive, does this make sence to you? http://www.oilchangeguys.com
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