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% of Gross or Net

Discussion in 'Lawn Mowing' started by tiedeman, May 23, 2004.

  1. tiedeman

    tiedeman LawnSite Fanatic
    from earth
    Posts: 8,745

    Ok, for those guys that put aside money every week or every month from the business for example like 3%, do you calculate by the gross or by the net???
  2. meets1

    meets1 LawnSite Gold Member
    Posts: 3,775

    I go by gross sales for the month. Most of by banking is 1st or 31st of month. Therefore that is when bills go out, I pay, and i expect invoices in.

    3% is a general rule - ya don't have to but everything helps! Your investing in yourself and you really don't miss the money once that is taken out.
  3. mtdman

    mtdman LawnSite Gold Member
    Posts: 3,137

    I set aside a standard amount a month. That's for the winter months, to pay the bills when there's no revenue, and to have money in the spring. Then I put aside whatever I can for future investments.
  4. jajwrigh

    jajwrigh LawnSite Bronze Member
    Male, from Martinsville, IN
    Posts: 1,405

    I realized today that I need to keep more money in the business...and I am going to take the percentage from the gross.
  5. tiedeman

    tiedeman LawnSite Fanatic
    from earth
    Posts: 8,745

    what percentage do most of you set aside then? I have been sticking aside 2%, and also buying treasury notes as well for an investment for my portfolio

    PMLAWN LawnSite Gold Member
    Posts: 3,535

    Not sure what you are talking about. Sounds like you are talking about profit.
    If so this should be a fixed # based on your business plan. Profit is the only reason to have a business. You must pay for overhead and all expenses- pay your help/pay yourself a set wage. Now you have profit and that should not have been an accident. That # should have been planned from the start.
    Also this # should have nothing to do with winter carryover for you or your personal investments. It belongs to the business and should be reinvested into the business or payed out in the form of dividends. It is not good to mix business and personal $s
    I am a 40% shareholder in our incorporation. The company I work for is one of 3 held by that inc. Being an employee, I get payed a hourly figure for the hours I work. When we started this company we personally loaned the company the start up $s. In 03 and 04 we will get some of that shareholder loan back but the plan is not to pay a dividend till 05.
    If you are truely running a BUSINESS then you must plan for profit. If not than you just have a job.

    "If you fail to plan than you are planning to fail" By someone else- not sure who. Good words.
  7. tiedeman

    tiedeman LawnSite Fanatic
    from earth
    Posts: 8,745


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