Large owner salary

Discussion in 'Business Operations' started by dmk395, Nov 2, 2002.

  1. dmk395

    dmk395 LawnSite Senior Member
    from Ma
    Posts: 992

    For an owner doing mostly maintenance, how many millions in sales are needed to have a salary of $250,000? I am just curious because a friend of mine who works for a large competitor has been dreaming saying his boss makes at least this much per year? Has 8 employees..i know variables exist but just wanted to throw it out there
     
  2. Green Pastures

    Green Pastures LawnSite Silver Member
    Posts: 2,457

    I'm guessing here but I'd say a gross income of at least $3.5 million.
     
  3. Nebraska

    Nebraska LawnSite Senior Member
    Posts: 525

    A Gross of $800k could bring that in. It all going to come down to the margins your doing the work at.
     
  4. dmk395

    dmk395 LawnSite Senior Member
    from Ma
    Posts: 992

    Alot would depend too on wages, this guy pays good money, many employees making 15 an hour and up...I was guessing gross sales of at least 1 million, I am sure someone out here can more than speculate.
     
  5. Lanelle

    Lanelle LawnSite Bronze Member
    Posts: 1,361

    Another factor is whether the owner is pursuing growth or other goals or is happy with the status quo. Or to put it in another light, some owners take as much money as possible out while others allow more money to stay in the company to accomplish various business objectives.
     
  6. John Allin

    John Allin LawnSite Bronze Member
    Posts: 1,489

    Lanelle has it about right.

    Some people suck money out of the business just because they can. Others can make that kind of money, but leave it in the business to establish viable retained earnings in order to make the business more financially stable.

    The kind of personal earnings you mention are attainable in this industry. I know several who make that kind of salary (and more), but they do so only after the business establish's itself to a point where the retained earnings are such that no-one (or no incident) can take the business away from them.
     
  7. John Allin

    John Allin LawnSite Bronze Member
    Posts: 1,489

    Another thing I've noticed. Those that pay good or outstanding wages often have much more profitable business's because sometimes you get what you pay for.
     
  8. dmk395

    dmk395 LawnSite Senior Member
    from Ma
    Posts: 992

    JAA,

    Have you seen the reverse, companies that pay too much and suffer by it?
     
  9. John Allin

    John Allin LawnSite Bronze Member
    Posts: 1,489

    I can't say as I have... although if they were paying out too much in salaries - it would show up rather quickly.

    As for company's having problems from the owner sucking out too much money... oh yeah, I've seen THAT one several times...... not pretty. Not pretty at all.
     
  10. Lanelle

    Lanelle LawnSite Bronze Member
    Posts: 1,361

    And its really sad when the employees are busting their chops trying to increase the money coming in only to have even more taken by the owner. I've lived through that one.

    I have seen the effects of uncontrolled overtime which pushes payroll too high. Those getting the OT are happy, those on salary or not getting OT are not and the CFO or owner is going nuts because the numbers look lousy.
     

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