How big of a profit is expected??

Discussion in 'Lawn Mowing' started by 25nbl, Sep 7, 2004.

  1. 25nbl

    25nbl LawnSite Member
    Posts: 39

    How much of a profit do big lawn companies make after it is all said and done at the end of the year? If they did a million dollars in sales, what kind of percentage for profit do they average if they have employees doing all of the work and the owner is staying in the office? I want to expand, but I dont know if the bottom dollar and headache will be worth the end result? Any help or suggestions would be great!! from any of the BIG GUYS
     
  2. Little o

    Little o LawnSite Member
    Posts: 23

    My guess on a large business like that, they would be doing great if did 7-10% net income after all said and done. The bigger you get, the lower your profit margin will be. The economic principle is called; "The law of diminishing marginal returns".

    That number is if you were totally hands off. If you worked to eliminate a position, add that to your number

    Doug
     
  3. GreenQuest Lawn

    GreenQuest Lawn LawnSite Senior Member
    Posts: 822

    That figure could be all over the place. My old boss was at just under 2mil gross..........Just declared bankruptcy.....go figure

    All depends on what you buy, what you spend, and how well you manage.
     
  4. Little o

    Little o LawnSite Member
    Posts: 23

    Todd,

    You are quite correct, the profit can be zero or negative. I just wanted to point out that the larger a business grows, the bottom line percentage will shrink. Some people think that their net profit percentage will grow in line with their sales growth. It ain't gonna happen.

    Doug
     
  5. Lanelle

    Lanelle LawnSite Bronze Member
    Posts: 1,361

    This type of industry data is available from ALCA I think. It is based on size of company and type of work performed. It is updated every couple of years. As I recall, the largest and smallest companies had the lowest profit numbers and the ones in the middle tended to have better % profit.
     

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