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Paying yourself as a solo lco

Discussion in 'Business Operations' started by Big C, Jul 27, 2008.

  1. Big C

    Big C LawnSite Bronze Member
    Posts: 1,641

    Just want to get some ideas as to how you solo guys calculate your personal payment....I am currently using a 50/50 method. Which means when I get paid for a job I split the payment 50% of the total is paid to me and 50% is paid to my business for expenses, gas, taxes, insurance etc. how do you guys do it?????
  2. shovelracer

    shovelracer LawnSite Silver Member
    Posts: 2,009

    I wont say what I pay myself, but it is well above what the industry experts say I should make. I also deal with better clients and work 70-80 hours a week. I will say that most guys get in trouble cause they overspend from not knowing their true expenses. As a rule of thumb I would say your looking for trouble paying yourself 50%, but with the right setup it could be OK.
  3. shovelracer

    shovelracer LawnSite Silver Member
    Posts: 2,009

    My other thought was if you dont know your true expenses and what you want to make than you cant really set a fair rate for the clients. If you took every single expense you could incur in the year, the salary you wish to make, add 10% for the business and divide by the amount of hours you can work in a year. You'll get your hourly rate. It could differ greatly depending on your salary. If you work 20 hours a week its a little unfair to pay yourself 50K. If you work 80 hours your not doing yourself justice by paying yourself 30K
  4. ALC-GregH

    ALC-GregH LawnSite Fanatic
    from PA
    Posts: 7,053

    I use 50-50. My actual expense is right around 40% so I'll have extra to use for un-expected expense.
  5. Mike Blevins

    Mike Blevins LawnSite Bronze Member
    Posts: 1,361

    I am a solo operator. I too will not say what I make now but it has gone up a bit in the last couple of years. I guess I have a simple plan on my business. I set goals at the beginning of each mowing season as to what dollar amount i will strive to make. Thats only after I know which accounts I will be getting back and how agressive I will have to advertise. (1 expense) Its a ballpark figure, nothing set in stone. This year I purchased a new Turf Tiger and when doing so I bought what I thought would take me through the season as far as "extra needed" equipment. That includes oils,belts,plugs,blades,gas cans,clothes, shoes,sunscreen,sunglasses,filters,trimmer string,extra trimmer parts,grease,grease gun,etc.etc.etc. This is for truck and mowers alike. (I bought a little more than needed.) So most of my costs were up front. But then we get the old kick in the ass GAS prices and luckily I was in the ballpark on this too. I guess to put it in simple terms I have kept good records from each year and can get close to costs. Its still a learning process. I don't pay myself a salary I guess like I should. I have bills and until the bills are paid off I will just keep mowing and making money. I put my mowing money in my business account and use it to run my business. At the end of the mowing season and leaf season I figure what is left and pay the bills through winter, go on vacation,buy Christmas for the kiddies, buy alot of deere hunting equipment,etc.etc.etc. The bills get smaller each year and the profits rise. I know its a weird way to do things but I have been studying a few different business strategies this summer and I have a whole new business plan coming Spring 2009. I can't wait already. Look out local lawn guys!!!!!!!! Better get your A game on. I think I have a gold mine.:usflag:
  6. Two Seasons

    Two Seasons LawnSite Senior Member
    Posts: 791

    Yeah, if I owned Deere, I'd probably shoot them too :laugh:
  7. Lovingreen

    Lovingreen LawnSite Member
    Posts: 147

    I don't currently pay myself a specific percentage, but I think I might start. It typically varies depending on what the month was like, what large expenses might be looming or what my personal needs may be. I am thinking about setting up an automatic withdraw monthly during the season to my personal savings?? Forced savings might help me save more??
  8. Green Finger

    Green Finger LawnSite Senior Member
    Posts: 839

    all cash payments go in my pocket. Checks are deposited. lol:hammerhead:

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