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NJlandscaper908
11-11-2010, 11:09 PM
If you guys don't mind sharing....how profitable is your lawn maintenance operation? I always made out quite well for myself but I have been out of the maintenance end of it for 4 yrs. A friend of mine recently said to me "theres no money in lawns", that you are lucky to make 10% profit. Do you guys find this true? Do you count on the lawns just to get you the "extras" or do you make a good living from them?

Greenboy24
11-12-2010, 10:56 AM
There has never been a huge margin on lawns so right now that is truer than ever. In order to make money on lawns you need to do 1 of 2 things. Work in volume. Event eh guys who sell themselves as an upscale service could never survive if they did not have some level of high voulume. Its always relative too, whats big for one is peanuts for another, you need to find the happy balance thats fits you, your crew and your equipment.

The second way is just do everything under the table with your neighbors craftsman that you took off his hands because it wouldn't start and it was just taking up space.

That being said I do believe 10% is on the lower side

Your call mi amigo

GlennZ
11-15-2010, 11:41 AM
I assume that 10% is after paying yourself fair market value? So many people quote profit without their own salary so it makes is sounds more impressive. I doubt many companies make 10% net no matter what service they do. More likely they are struggling to make a decent wage for themselves. I see it all the time.

DA Quality Lawn & YS
11-16-2010, 10:22 AM
There is money in mow and blow. Especially if you max yourself out with volume as a solo op. Keep your overhead down and you can net way over 10% easily, even after taxes.

Once you start to hire on, your volume had better go up substantially to keep pace, due to all the extra overhead you bring on.

GlennZ
11-16-2010, 10:37 AM
There is money in mow and blow. Especially if you max yourself out with volume as a solo op. Keep your overhead down and you can net way over 10% easily, even after taxes.

Once you start to hire on, your volume had better go up substantially to keep pace, due to all the extra overhead you bring on.

But are you running your solo op as a real business with all its expenses? Do you have business insurance? Is all your equipment being costed out to the company so you have the funds to replace them? Are you charging yourself fair rent value if you run out of your house?

My only point is that when people quote their net profit we are not comparing apples to apples.

juststartin
11-16-2010, 05:30 PM
I assume that 10% is after paying yourself fair market value? So many people quote profit without their own salary so it makes is sounds more impressive. I doubt many companies make 10% net no matter what service they do. More likely they are struggling to make a decent wage for themselves. I see it all the time.

IMO, the only reason people pay themselves a salary is to minimize ss taxes. 10% profit margin sucks.

snomaha
11-17-2010, 11:03 AM
IMO, the only reason people pay themselves a salary is to minimize ss taxes. 10% profit margin sucks.

What????????

snomaha
11-17-2010, 11:09 AM
I assume that 10% is after paying yourself fair market value? So many people quote profit without their own salary so it makes is sounds more impressive. I doubt many companies make 10% net no matter what service they do. More likely they are struggling to make a decent wage for themselves. I see it all the time.

Agreed.

In any service industry the market has a way of dictating net profit. 10% = good....15% = great...anything over 15% enjoy while you can because the market will figure you out and bring you back down.

Just my two cents.

Will P.C.
11-17-2010, 11:27 AM
Very good chance that if most guys sat down with an accountant they would not have made a dime in the first 2-5 years

juststartin
11-17-2010, 12:27 PM
What????????

Being as s-corp allows you to avoid paying ss taxes on your entire profit.

juststartin
11-17-2010, 12:28 PM
Very good chance that if most guys sat down with an accountant they would not have made a dime in the first 2-5 years

The way people buy stuff on this site.... new truck, trailer, skids, mowers I wonder if anyone ever shows a profit.

T.E.
11-17-2010, 12:29 PM
I assume that 10% is after paying yourself fair market value? So many people quote profit without their own salary so it makes is sounds more impressive. I doubt many companies make 10% net no matter what service they do. More likely they are struggling to make a decent wage for themselves. I see it all the time.


This the reason I seldom post in the "what is your profit margin", etc. threads. Way to easy to manipulate the numbers....like taking a small salary, etc.

Just my .02

juststartin
11-17-2010, 12:37 PM
This the reason I seldom post in the "what is your profit margin", etc. threads. Way to easy to manipulate the numbers....like taking a small salary, etc.

Just my .02

Why would you not take a small salary? Do you enjoy paying ss taxes?

juststartin
11-17-2010, 12:39 PM
Agreed.

In any service industry the market has a way of dictating net profit. 10% = good....15% = great...anything over 15% enjoy while you can because the market will figure you out and bring you back down.

Just my two cents.

So a company grosses 500k. The profit margin is 10% which leave a profit of only 50k. What would the salary for the owner be? Why would the salary of the owner need to be over 30k? If the owner's salary is 30k and he only shows a 50k profit that seems low unless it is low marging commercial work.

snomaha
11-17-2010, 03:03 PM
Being as s-corp allows you to avoid paying ss taxes on your entire profit.

Yes, as long as you are paying yourself a fair market wage.

T.E.
11-17-2010, 03:52 PM
Why would you not take a small salary? Do you enjoy paying ss taxes?

Hmmm you might reread my statement. Did I say one way or the other what my salary is? I simply stated why I usually ignore these type threads.

wbw
11-17-2010, 04:21 PM
So a company grosses 500k. The profit margin is 10% which leave a profit of only 50k. What would the salary for the owner be? Why would the salary of the owner need to be over 30k? If the owner's salary is 30k and he only shows a 50k profit that seems low unless it is low marging commercial work.

30K + 50K = 80K Not bad for cutting grass

stan the man
11-17-2010, 04:37 PM
i say i have done good for myself in this business