Professional Business Practices 10% (Structures/License/Management) IDFX/IDPX Flashcards
Sole Proprietorship
IDPX
Company owned by ONE person
Professional Liability Insurance
IDPX
Protects the designer against acts, errors or omissions in the course of work on a design project
General Partnership
IDPX
TWO or more people that share equal profits + losses of the business
Limited Partnership
IDPX
Someone in addition to the working partners who have decided to INVEST in the business.
LImited Liability Partnership
IDPX
Limited to a certain type of partnership.
Limited Liability Companies (LLC)
IDPX
Hybrid of the general partnership OR sole proprietory and the corporation
* Member has no personal liability
Corporations
IDPX
An association of individuals created by statutory requirements
* Shareholders are the major owners
Joint Ventures
IDPX
Temporary arrangement between TWO or more people/firms for the purpose of completing a project
At projects starting point
Ball Park Budgeting
IDPX
Quality Ranges
3-4 quality ranges of manufacturers to do business with
Use of Typical
Typical layouts that they developed for a starting point
SF Estimating
Estimate by square footage
Later in the project
More Detailed View Budgeting
IDPX
By Department or Division
Lump sum amounts. Cost center
By Person or Room
Each item in the space is listed, counted + priced.
Floor by Floor
Each floor is budgeted
Life of Cycle
Life cycle cost of item(s).
Accounting Statements
Types
IDPX
Balance Sheet
Summary of ALL assets + liabilities and shows financial positions of a business
Profits + Loss (Income Sheet)
Lists ALL the income + expenses of a business for a certain period of time
Cash Flow Statement
Shows the actual inflows + outflows of cash or cash equivalents
Financial Ratios
Types
IDPX
Current Ratio
Total Current Assets/Total Current Liabilities
Quick Ratio
Current Assets - Inventory/Current Liabilities
Net Profit Margin
Net Profit Before Tax/Total Annual Revenue
Overhead Rate
Total Overhead Expenses/Direct Labor
Accounts Payable
IDPX
Claims from the supplier, goods or services but NOT yet paid for
Accounts Recievable
Money that OTHERS OWE to the business through invoices for services
Balance Sheet
Liabilities + Equity
Types
IDPX
Current
Obligations that ARE DUEwithin one year or less
Other
Obligations that ARE NOT DUEwithin the next year (long term debt)
Equity: (Discretionary distribution)
Voluntary distribution of profits to owners + non-owners (bonuses, profit sharing, compensation)
Balance Sheet
Assets
Types
IDPX
Current
Resources of business that are converted to cash within one year (cash, inventory, supplies, account receivables, etc..)
Fixed
*Resources used by the business and are long term
Other
Misc. resources (copyrights, trademarks, licenses, etc..)
Accounting Methods
Accrual Accounting
IDPX
Revenue + Expenses are recognized at the time they are earned or incurred
Mandatory for some types of business
Owners Insurance
IDPX
Owner is required to carry liability + property insurance
Accounting Methods
Cash Accounting
Revenue + Expenses are recognized at the actual time the business receives the cash or pays a bill
Simple and used by single person or small firms.
Workers Comp. Insurance
IDPX
Protects employees in the event of a “work related” injury
Automobile Insurance
IDPX
Covers damage to the vehicle owned by the business
General Liability Insurance
IDPX
Protects against claims of property damage, liability and personal injury caused by desiner or anyone hired by designer
Product Liability Insurance
IDPX
Covers injuries caused by products that are designed, sold or specified by the interior designer
Property Insurance
IDPX
Protects the designers building and supplemental insurance may be needed for its contents
Personal Injury Protection Insurance
IDPX
Protects the designer against charges of slander, libel, defamation of character, etc..
