Net profit margin

Discussion in 'Business Operations' started by BLC1, Apr 2, 2008.

  1. BLC1

    BLC1 LawnSite Senior Member
    from Ohio
    Posts: 714

    Whats an average percentage for net profit?
  2. rodfather

    rodfather LawnSite Fanatic
    Posts: 9,501

    we were at 16.2% for 2007
  3. BLC1

    BLC1 LawnSite Senior Member
    from Ohio
    Posts: 714

    Does is it tend to go down once you add employees and move away from a one man show? I read on here about guys making 40-60k while bringing it around 100k.
  4. LwnmwrMan22

    LwnmwrMan22 LawnSite Platinum Member
    Posts: 4,372

    I'm a solo op.

    My net is about 30-40% of $120-150k, depending on how hard I work, what I buy for the company for that tax year.

    I'll have a fixed number this evening, getting the taxes filed at 3 pm today.

    I had total revenues of $143k +/- in 2007.

    My expenses are going to be roughly $90,000, plus my depreciation on trucks, mowers, building, etc., which I don't have that exact number off the top of my head, that's my accountants job.

    It'll drop some, because you can never have 100% growth with employees.

    The employee will never be as efficient as you are as a solo op.

    I also don't understand the guys that are "netting" $60k on $100,000. You're going to be paying $20 / year in taxes. If you're not, then you're not netting $60k on $100,000.

    GSPHUNTER LawnSite Senior Member
    Posts: 310

    What percent of that 120k - 150k is snow plowing for you?
  6. LwnmwrMan22

    LwnmwrMan22 LawnSite Platinum Member
    Posts: 4,372

    About 30%.

    Also, that 30-40%, as well as that range in the gross is pretty much what I've held for about 10 years now, since I went back to being solo and having commercial accounts on yearly contracts.
  7. B & B Yardscape

    B & B Yardscape LawnSite Member
    Posts: 131

    I try to bid jobs with 40% to 55% profit.

    After that everything is deducted on my taxes so my profit margin looks really bad. Just did quick math. 20% profit.

    Would you believe I did $120k this year and paid a total of $49.00 in taxes.

    I deduct almost everything I buy as a business expense.
  8. BLC1

    BLC1 LawnSite Senior Member
    from Ohio
    Posts: 714

    49 dollars? how is that?
  9. LwnmwrMan22

    LwnmwrMan22 LawnSite Platinum Member
    Posts: 4,372

    Because he either bought equipment through the nose, or he cheated or he's lying.

    He even admitted he ALMOST deducted everything.

    A 20% profit margin on $120k is going to be $24k. But then if you throw in child credits, home owner deductions, all the real life stuff that people don't seem to understand that you have to raise your rates for, then you can probably reduce your tax burden to a minimal amount.
  10. Superior L & L

    Superior L & L LawnSite Senior Member
    Posts: 567

    From the people ive talked to in the industry (consultants) 5-18% is were you should be. Now this is for real full out companys. High end custom contractors should be 12-18% and the standard Design build conpetative bid company should be 5-12%. The larger the company the lower the percent.

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