What are overheads?
Poultry farm overheads are indirect expenses related to the running of your farm business.
Indirect means that these expenses are not directly related to bird rearing activities.
They relate to background business processes.
When you think of overheads and the nature of their cost,
Think less of action in the field and more paperwork at your desk.
A kind of golden rule to separate them out would be,
If I can see myself paying these regardless of what type of business I run …a poultry farm…cafe…hotel…
Then it’s probably an overhead.
Overheads are the kind of expense that occur because of your farms general running.
They also carry the description fixed and semi-variable.
A fixed overhead for your poultry farm would be rent, for example.
It is called fixed because regardless of your production levels, your rent doesn’t change.
Whether you sell more or fewer eggs or carcasses, you will owe the same rent.
A semi-variable overhead for your poultry farm would be a commission paid to sales personnel upon successful sales.
Their basic wage is fixed at a certain amount,
But the commission payout depends on how much they sell (variable).
Here is a list of typical overheads of a poultry farm.
- Property taxes
- Buildings insurance
- Interest on loans
The way I see these is like they are baseline outgoings which will be there regardless of success.
They are the kind of outgoings that a standing order should clear up.
As little time as possible should be spent on these.
Their costs are a necessary burden to carry (without them you’d have no business),
But they shouldn’t get under your feet whilst you run toward the finishing line.