net / gross tax income question

[PORTER 05]

Hey guys i was wondering what the average % of net income is about right for a landscape company. We are doing weekly lawn mowing, spring/fall clean-ups, tree work, ect , also snow plowing in the winter. I am looking for the # that "me" the owner would be seeing after i pay all employees, all exspenses, all purcheses and all taxes, and was wondering after all that what % is about right compared to how much you gross in the landscape biz.

After doing taxes all week long im thinking that im around 36% after paying everything , paying all my taxes and buying a new dumptruck, this is what ill take home 36% of the total gross income i brought in in 2008.

Sorry if this is a little confusing , just looking to see if this is about right , really high or really low, i want to make sure to make changes if it is to low.

Thanks alot!

[CLARK LAWN]

im about 30% so id say you are doing pretty good

[Perfect Image TLM]

Sounds pretty good, I am right around there as well...

[Runner]

What you're talking about is referred to as gross profit margin,..commonly known as gpm. If you guys are doing 30 and 36%, you guys are doing real well.

[FYS777]

so say if you gross 100k you would net 36k after all expenses, is this correct, = 36%

then I guess I am doing very well also, kinda gives an idea what other parts of the country is doing.

[topsites]

Yes, I am a firm believer in the rule of thirds, if this is something you understand then
I might mention the 33% bit can also apply to cost though it's in a bit of a rough way,
as well as taxes, so that: 1/3'rd cost, 1/3'rd tax, 1/3'rd profit...
And it doesn't always work out that way but it tends to hold true over time.

So roughly speaking, but yes.

[PORTER 05]

FYS777 , are you doing 36% after or before taxes are paid?

[FYS777]

FYS777 , are you doing 36% after or before taxes are paid?

Those are examles but after taxes, for the last 2 years have been running 12% higher then said above, I do nothing but full maint, no installs. some bark jobs, up to 7 cu yards, all within 9 month season.

[FYS777]

just wont to add to though its different in different parts of the country,

[FYS777]

Another add, I do all my own repair and manit,work on all my equip. I dont no if that makes the difference.

[TMlawncare]

Usually your net income is before you pay your taxes. So if you did 100k gross and all your expenses totaled 70%. Your net income would be 30k. The 30k is also what you will pay Federal, State and self employment taxes on.

[FYS777]

Usually your net income is before you pay your taxes. So if you did 100k gross and all your expenses totaled 70%. Your net income would be 30k. The 30k is also what you will pay Federal, State and self employment taxes on.

the other way around, time I take out state feds, tax and the other. I get around 50% within a couple %.

[TMlawncare]

the other way around, time I take out state feds, tax and the other. I get around 50% within a couple %.

That might be the way your doing it but your wrong. Your net income does not include taxes. You can not write your own taxes off can you? If you pay quarterly tax vouchers you apply them at tax time on your net income. The only taxes you can write off are payroll taxes.
In the eyes of the goverment, personal taxes are not an tax deductible expense. Therefore they can't be considered a business expense either.

[FYS777]

I know that, I guess I should have said, after all exp. and pay tax is calculated, my net is some were around 68% and because I profit that much I owe state and fed so much, I took that off, 48 to 50% is actually mine.

[grasschopperofchicago]

I run about 50-52% net of gross pretax, definition of net can vary depending on what you are figuring...if I gross sales $280,000 my gross profit after expenses is about $144,000 and then pay taxes on that amount....

[FYS777]

I run about 50-52% as well, definition of Net Income can vary if you aren't figuring it correctly...if I gross $280,000 I net about $144,000 and then pay taxes on that amount....give or take a % or so.

thats good, you have to make a good percent, :clapping::clapping::clapping: called efficiency, and planing well

[grasschopperofchicago]

2 New Dixie Choppers spanked me!---couldn't pass up the 0% financing for 3.5 years!!

[PORTER 05]

ya i did 37% after i paid my state/fed tax.

[ExtExc]

so to K.I.S.S. for everyone, and for future reference, lets use these terms.

Gross Sales
Net Sales
Gross income
Net income


:)