Register free!
Search
 
     

The Green Industry's Resource Center


Click for Weather
Reply
 
Thread Tools Display Modes
  #51  
Old 01-03-2013, 01:38 PM
jrs.landscaping's Avatar
jrs.landscaping jrs.landscaping is online now
LawnSite Silver Member
 
Join Date: Mar 2012
Location: Maine
Posts: 2,393
Quote:
Originally Posted by snomaha View Post
Good discussion on a relevant topic.

My experience has been that between start-up and $1,000,000 in revenue the owner is wearing many hats and takes sweat equity in lieu of a fair market wage. Once that 1m in revenue hits you better be profitable and paying yourself a fair market wage because you no longer can handle all the functional roles of the business - seems like around the 20 employee mark this happens.

The next jump from 1m - 3.5m in revenue is tough. You are adding management infrastructure to continue to grow which drives down profitability. I think this is one of the most important points i discuss with my accountant - you have to have capital in the business to survive the push from 1m - 3.5m. Live off your wage and leave the profit in the company to fund growth. This is also the point when many realize that managing the balance sheet is just as important as managing the P & L statement. Try and get a line of credit increased or consolidate equipment debt if your balance sheet is out of whack - banks don't like it!

just my 2 cents for now.....
Very true statements

The business owner oversees everything from maintenance to books until it become necessary to put other people into those roles.
__________________
Reply With Quote
  #52  
Old 01-03-2013, 04:28 PM
rbljack rbljack is offline
LawnSite Senior Member
 
Join Date: Aug 2012
Location: Texas
Posts: 545
this is a great discussion that im following closely. I started tracking my numbers a bit closer last year using an excel spreadsheet, so i can start to break down my numbers and see where Im at...and where im going. My resisdential crappy mower broke last season, so i went out and financed a new honda hrc 21 inch mower (most yards i do are smaller) and im very happy with it. Long story made short, at some point, that mower will have to be replaced. So even after its paid for, there still has be a way to replace that mower down the road, so it must be calculated into the man hours cost. Im taking notes yall....LOL.

Im taking a lot from this posting, so thanks to everyone for their contributions and points of view.

debt free or paid for equipment does allow you to be more competivite on your prices, but you still have to break down your numbers and determine what your costs are, and from there, determine what you want your profit margin to be based on where you are currently at. interesting..... and makes sense. As time goes by and the buisness grows (hopefully) the numbers game continues, and you must be staged to grow with the buisness and the grass that we mow...LOL.
__________________
Equipment Stolen/ Please Help and watch for:
6.5x12 Dual Ramp Trailer with 3 place trimmer rack and two blower racks
2012 21" Honda HRC-216 mower
2013 Exmark Commercial 30
2014 Exmark Lazer Z S Series EFI 52
2008 Stihl FS250R Trimmer
2010 Stihl FS90R Trimmer
200? Stihl FC75 Edger
2014 Stihl KM130R edger and trimmer shafts

2013 Stihl BR600 Backpack blower

Last edited by rbljack; 01-03-2013 at 04:32 PM.
Reply With Quote
  #53  
Old 01-03-2013, 05:12 PM
Sean Adams Sean Adams is offline
 
Join Date: Jun 1999
Location: Pennsylvania
Posts: 3,623
It is a great topic and hopefully this thread is read by many - good info @snomaha
Reply With Quote
  #54  
Old 01-03-2013, 09:33 PM
cpllawncare's Avatar
cpllawncare cpllawncare is offline
LawnSite Silver Member
 
Join Date: Apr 2011
Location: Greenville, SC
Posts: 2,647
I'm currently bidding landscaping jobs at 45/mhr with a 20% markup any subs prices and a 10% markup on materiel handling cost and take the total and add another 10% for uh oh factor so far it's worked out good, we dont get every job we bid but the ones we do get we make decent money. The market here won't really bear much more than that, I've been told on a few occasions we are high but it was a fair bid they just didn't have the budget. I think when you break down your prices within reason for the customer and educate them it makes them feel better about your bidding. I had a phamplet made up about RED FLAGS in the contracting industry and give it to the customer and tell them weather they choose us or not please be careful about the so called "Low price leader" and that great price usually comes with the long term consequence of a poor job. Just today, I was ask to bid on a repair job because the customer got a great deal but can't get in touch with the contractor to fix the poor workmanship he did.
Reply With Quote
  #55  
Old 01-03-2013, 09:44 PM
Duekster Duekster is offline
LawnSite Fanatic
 
Join Date: Jan 2007
Location: DFW, TX
Posts: 7,971
Well Some one spank me if I am wrong but Vander Kooi has some good info on mark ups and how to bid work.
Reply With Quote
  #56  
Old 01-04-2013, 02:33 AM
lawnpropm's Avatar
lawnpropm lawnpropm is offline
LawnSite Senior Member
 
Join Date: Aug 2010
Location: Spartanburg,SC
Posts: 560
Cant beat free info thats valid and relevant! Lawnsite needs more threads like this...Subscribed
Posted via Mobile Device
Reply With Quote
  #57  
Old 01-04-2013, 04:24 AM
GSO LAWNEN4CER GSO LAWNEN4CER is offline
LawnSite Member
 
Join Date: Jun 2012
Location: GSO NC
Posts: 83
A easy way to think of it is!

When you grow or expand,the profit level will drop as you expand.But as you expand the profit level will slowly catch back up. This will continue as you grow the business. Its a cycle that ALL business go through,its no way around it.
Reply With Quote
Reply

Thread Tools
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off

Forum Jump





Powered by vBulletin® Version 3.8.6
Copyright ©2000 - 2014, Jelsoft Enterprises Ltd.
Copyright ©1998 - 2012, LawnSite.comô - Moose River Media
All times are GMT -4. The time now is 01:35 PM.

Page generated in 0.06394 seconds with 9 queries