For those of you netting $200k or more....

Discussion in 'Lawn Mowing' started by lawncutterupper, Mar 1, 2006.

  1. lawncutterupper

    lawncutterupper LawnSite Member
    Posts: 61

    Im am curious of what your approximate rate of growth was. Im only looking for a simple year by year estimate, something like 1st year 15k,2nd year 25k, 3rd year-50k, 5th year-100k, 10th year 200k or however youd like to tell me. Thanks in advance for any input.
     
  2. YardPro

    YardPro LawnSite Gold Member
    Posts: 3,563

    net $200K is really good.
    you sure you do not mean gross??

    We did 1/2 mill on sales and only netted just over $50K
     
  3. Precision

    Precision LawnSite Silver Member
    Posts: 2,995

    Netting $200K would mean you did about $2-2.5 million in sales and you had good control on expenses.

    I would guess there are very few people on here netting that amount and the path to attaining that will be very different for each.

    Do they do mostly install work?
    Do they do mostly hardscapes?
    Do they do mainly full service resi?
    Do they do mainly mow and blow?
    Do they do mainly commercial?

    How do you fit into what they do?

    As far as gross goes, My first year out and mostly solo, I did about 85K. Netted about Zero. Year two I did about 160K according to quickbooks, netted about Zero. Both years it was due to growth, equipment purchases, giving myself pay raises and a few bad decisions. Next year is also a year of growth, so I don't expect my net to be too exciting, but I hope to have my second company take off and hopefully double my gross again this season.

    With stricter cost controls in place I hope to squeeze some net out despite the growth curve.

    The thing is if you want a high net you need a high gross. In order to have a high gross, you need to grow. Growth costs money so you net goes away. But at some point the growth curve slows and if you are smart, the net really jumps. My guess would be it would take 5-7 years minimum to get to that point.
     
  4. LwnmwrMan22

    LwnmwrMan22 LawnSite Platinum Member
    Posts: 4,372

    Many many variables here to put somewhat of a blanket statement, but I would agree with your 5-7 year point, ballpark.

    This is my 18th year.

    Due to the fact I started my business when I was 16, with no knowledge of ANYTHING, other than how to mow all week so I could build a $7000 stereo system in my '94 Dodge Ram full size pickup, it took me a little longer.

    This was before Al Gore invented the internet, so there were no sites like this to bounce ideas off of people.

    Anyways, most people on here say if you're not netting at least 30%, you're doing something wrong.

    IMO, as you get bigger, your net will get proportionally smaller, depending of course the accounts that you acquire, or the jobs that you're able to perform, etc.

    I'll start show some real net next year, but I too am spinning off another business, which my lawnmowing / snowplowing COMPLETELY subsidizes for another 2 years, so, as large purchases have been made ($40,000 +), as those debts come off the books over the next year to two, the net will really add up.

    However, I believe in tax breaks, so I'm sure I'll find more stuff to take it's place.

    But if you get back to the point about 30% net. I suppose if you were doing $1M gross, you MIGHT net $200k, but you'll have to have some VERY nice contracts, whether it's large maintenance, or lucrative installs, because the equipment / labor cost alone, never mind insurance, fuel, other expenses, will eat into that $1M drastically.

    I'm in the same ballpark as Precision, doing just under $100k gross in 6 months working solo, but I net somewhere $25-35k / year.
     
  5. Jpocket

    Jpocket LawnSite Silver Member
    Posts: 2,278

    I can tell you that the jumps from $50K-100K and the Jump from 100K -200K, are going to be the hard ones, because it's gonna cost you more money to do.

    $25k-$50K is easy
     
  6. kc2006

    kc2006 LawnSite Silver Member
    Posts: 2,442

    Just talk to Mac, 200K is pocket change for him. :D
     
  7. Az Gardener

    Az Gardener LawnSite Gold Member
    Posts: 3,899

    The other thing to keep in mind is what is your objective? Get the company showing profit to sell it? For me it is to make the company work for my family, so net is the farthest thing from my mind. I am working to find legal ways for the company to pay me and my children so we end up with little or no net. So tax's are less. It's not what you make it's what you keep that is important.
     
  8. Jpocket

    Jpocket LawnSite Silver Member
    Posts: 2,278

    LOL I believe it....I think there are few few others on here in that neighborhood too.
     
  9. JustMowIt

    JustMowIt LawnSite Senior Member
    Posts: 367

    I agree to net $200K on 2M sales sounds about right if you are doing landscaping, hardscape, fertilizing etc. , since so much of those gross sales dollars go to materials, managers, supervisors, plants, expensive heavy duty trucks, etc..... That is why large landscape companies have such huge sales figures 5, 6,7, 10 Million annually, but net dollars is only 10 or 11%.

    This same math does not apply to companies who only mow, net dollars is about twice that on poorly run operations and 3 times that on well run operations that watch expenses

    TJ
     
  10. The landscaper

    The landscaper LawnSite Senior Member
    Posts: 845

    Az Gardener, what type of entity do you have set up? Just curious as to what you mean by keeping the ne low to get around some taxes.
     

Share This Page