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View Full Version : Gross Profit Margins


cleancutsolutions
08-15-2011, 10:30 AM
We have been in the landscape business for about 5 yrs now and started doing irrigation installs and service this year. We were wondering what gross profit margins yall strive for with irrigation new installs and service work as well.

GreenLight
08-15-2011, 10:54 AM
I don't have a true answer for you about profit percentages, but I can give you my experience on the pros and cons.

Im in the southeast and pulling pipe is basically unheard of here, the ground just isn't conducive to that application. I see you are in louisiana and would venture to say you would likely be putting in PVC as well. Installation using pvc I have found to be a very low "profit" gig. It will generally pay bills and keep a crew busy, which isn't a bad thing, but you aren't going to get rich off of it without running 2-3 jobs at a time. The only good side of installation I have found is it keeps crews busy for longer stretches and you have time to accomplish other things as a business owner, so it basically helps to keep you from scrambling for work. The trade off for me is, it is basically an "everybody gets paid" scenario but there isn't much left after overhead and labor.

Service work on the other hand can be very profitable, but it's seasonal and you have to have well trained employees. I can confidently say, 1 good week of service work will make me more "true profit" than 1 solid month of installation. That doesn't mean I could carry a company on a weeks worth of service for the month, just means if I look at my total "profit" from a months worth of installation, the 1 week of service work can at times easily outproduce.

Without A Drought
08-15-2011, 09:41 PM
i have different GM for service and install.
install is very competitive; service, if you do a good job, you can write your own ticket.

pg

Mike Leary
08-15-2011, 09:47 PM
I paid my guys $20.00 hr., billed it out @ $80.00. Billed parts @ list or 45%. The only time I billed for myself was when I got my hands dirty.

Mdirrigation
08-15-2011, 10:24 PM
Done right the margins can be rather good on installs , and better than good on service. Plowing if you can in your area is the labor saver . Yuo only get out of it what you put into it