Profit margins

[dmk395]

Just curious what you all shoot for, I know a large company often looks at 10% as being good, however what about some of the smaller operators here.

[GreenQuest Lawn]

whats a profit:D

on paper I like the loss

for now

[geogunn]

I'm afraid I cant live off of the loss on paper.

and 10% of say...$100k is $10k and I can't live off of that either.

I do much better than 10%.

GEO

[dmk395]

For a large company 10% of 10 million isnt too shabby.

[GreenQuest Lawn]

I never said I didnt make money.

Are you talking profit as the amount you take from the company?

To me that is not profit.

I make good money BUT when tax time comes the CPA does a great job of showing I dont.

[David Gretzmier]

when you want to borrow money to buy a house, get credit for a large purchase, or sell your business, they all want to see your tax forms. If you show year after year of liitle or no income, guess what- you ain't gettin squat. I report all sales and all expenses and show a reasonable profit.

I hear of profit margins from 10% all the way to 60%. a solo with helper should run in the 80-100k range, and I would put that in the 40-60% profit range or take home of 32-60k. a multiple crew setup on 250-500k should be close to 25-30% meaning 60-150k for the owner before tax. the drop is obvious, the owner cant do all the work. It seems in pro and turf as you go up from there the margin decreases as you get into the millions. the overhead on shop and trucks should be linear, but you need more backup stuff, and loads more shop space. Rain days cost you lots more with 10 trucks idling than 1. you have to pay folks 40-60k to help manage big companies, and more to manage really big companies. that is why 10 million$ comanies only do 5-10%, they spend ALOT on senior managers. but the owner is taking home 500k+ so he isn't complaining. Dave g

[Guido]

I got a few e-mails on this and some guys were confused about what this meant. That 10,30,or 60% profit is AFTER you pay your own wages. Its what the business makes after everything is said and done.

Hope this helps!

[Evan528]

I guess my bussiness profits zero then! Im am not a corp. and I dont give my self a weekly check. My salary is whats left after business expenses! One week it can be $1000 and the next it can be $2,000.

[John Allin]

DaveG isn't too far off.

[Guido]

Originally posted by Evan528
I guess my bussiness profits zero then! Im am not a corp. and I dont give my self a weekly check. My salary is whats left after business expenses! One week it can be $1000 and the next it can be $2,000. to pay yourself (unofficially). You need to make money for your family, house, pocket, etc. AND your business needs to make money to repair and replace machines, expand, etc.

Its not good practice to run your personal life out of your business money. It should be two seperate deals.

[tpirobert]

I pay myself weekly the same amount My wife takes care of all our family financial needs from that check. The business has to pay it's own expenses with it's own budget. Any "extra" money in the business account is there for taxes, equipment etc.. If I can afford giving myself a year-end bonus...great, but if there is a cash shortage I reduce my pay.

[Guido]

Originally posted by tpirobert
I pay myself weekly the same amount My wife takes care of all our family financial needs from that check. The business has to pay it's own expenses with it's own budget. Any "extra" money in the business account is there for taxes, equipment etc.. If I can afford giving myself a year-end bonus...great, but if there is a cash shortage I reduce my pay.

My Point exactly!

Works pretty good right??

[tpirobert]

It's the only way that makes sense to me.

[Guido]

Paul, Rooster and Myself had a talk with Evan and I think we straightened him out on this one in the chat room the other night! :)

Sometimes thats what it takes, and thats why that chat room is such a good asset to the forum. You should try it sometimes if you don't already!!