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Old 12-09-2001, 02:03 AM
wolfpacklawn wolfpacklawn is offline
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What is your profit margin?

Just wondering what kind of profits other lawn mowing business have. Mine is exactly 50% this year. 70k gross income, 35k net. I obviously have a pretty small business, just myself and one full time employee most of the time. I assume that as you add more employees that the profit margin goes down but i'm wondering how much. Please let me know what your margin is and how many employees.

thanks for any help

wolf
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  #2  
Old 12-09-2001, 09:32 AM
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brentsawyer brentsawyer is offline
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$70K gross revenues??? Is that after tax income???
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Old 12-09-2001, 12:23 PM
wolfpacklawn wolfpacklawn is offline
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Quote:
$70K gross revenues??? Is that after tax income???
Maybe i'm not using the right term but when I said gross income I meant by that the total amount of money that came in to the business from the work we performed. Do not include any money from loans in this amount.

Net income would be what I have left for personal use after all business expenses including payroll, payroll taxes, insurance, supplies, equipment purchases, etc.
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Old 12-09-2001, 04:18 PM
LoneStarLawn LoneStarLawn is offline
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you are using the right terms...that is what gross means.

The question is are you figuring your salary as an expense?

If not then that is not a true profit margin.
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Old 12-09-2001, 06:09 PM
Evan528 Evan528 is offline
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No, It seems as if he is doing it similar to I wich probly isnt the best way...but it works for me. My salary is what ever money is left after all business expences are paid. For example.....some months my salary could be 3,000 dollars....others 5,000 dollars. Takes budgeting!
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Old 12-09-2001, 07:55 PM
Matthew Morgan Matthew Morgan is offline
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Only 3 people know mine.
1) ME
2) The IRS
3) GOD

Sorry,

Matthew
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  #7  
Old 12-09-2001, 08:32 PM
paul paul is offline
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You mean the IRS knows exactly?
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Old 12-09-2001, 09:08 PM
MATTHEW MATTHEW is offline
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Just got done with the numbers which probably won't change unless we get some snow. 65% profit. Since I am 100% solo, it does include my pay. I do not separate a portion as pay. I just have to be wise about how much I can use and how much I need for those lean months.
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Old 12-10-2001, 08:12 PM
turfman99 turfman99 is offline
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To determine a true profit margin or return on assets, you need to set up a budget that has your salary in it.

Profit margin is money left over after all expenses have been paid, including the owners salary.

You can set your hourly rates fairly easy that way.

You should always know where you are at in relationship to your budget for the year at any time.

If your a solo operator, you still have overhead expenses that need to be paid. You have X amount of hours to recover all those expenses, so knowing hours is important.
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  #10  
Old 12-12-2001, 10:26 PM
MATTHEW MATTHEW is offline
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Yes, but for a solo operator who is non-incorporated, that "salary" number is totally arbitrary. We would still have to pay taxes on both the "salary" and "profits" so why separate them?
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