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Discussion in 'Pesticide & Herbicide Application' started by BLC1, May 20, 2008.
Whats a good net profit margin for someone just doing fert/squirt?
I like to see 25%
I would too.
Every market is different. Prices, overhead and volume will vary in each area. Inside pest control can run 95 to 97% gross and 85% net profit. Lawn & Ornamental can be a negative margin. I currently run about a 60% net margin in a very good market of postage stamp properties. My minimum puts me at $ 20.00 a thousand average price. I spare no expense to keep these properties a Healthy green. I also do some pasture management that is 10% margin. But I would like to think after all the years in this business I am a little sharper than the newbie. I know my market and I know my stuff.
Run your numbers and get your approximate cost as close as you can. Then look at the current Prices in your area and your market. Then make the business decision of what part of your market you will fit into best. I went after the big upscale houses like everyone else. But we have enough volume in my market to keep everyone happy. BTW I am in the bug capital of America and sandy soil that requires a lot more treatment than other parts of the country.
Do you think 20-25% net is high?
Ric, does that mean terminex is making loads of money?
IMHO Terminex being a structual pest control and termite has the ablity to make tons of money. A $ 100.00 of chemicals is more than is needed for a $ 2,500 termite job. Most non Lawn & Ornamental pest control has a huge profit margin. I know Terminex techs bring home $ 2,000 a week. BUT like all big corporations Terminex doesn't run real effective. National TV advertisement and office overhead is killing their profit.
50% profit margin is more like what I expect a L&O operation to net. I am slightly higher because I don't advertise and only take word of mouth customers at a slightly high price. My equipment is paid for and I keep my over head down as a one man band. But I am only going on my market. Florida has a somewhat closed entry and it isn't easy to get certified or licensed here. We are also the bug capital of America. Fire Ant control only, can be a stand alone business here.
BTW I had the big show with a nursery and 20 employees that Hurricane Charlie blew away. As a one man band doing only fert & squirt I have more money in my pocket to spend on Ric than I ever had as a Big Show. My numbers are way down as a one man band but my pocket actually has money in it.
Terminex techs are paid $2000 a week or bring in that a week? That would seem awfully high but then again you clearly know your schit.
Was your nursery just wiped out by the storm? You decided not to rebuild and go on your own?
Not all Terminex techs make that kind of money. But the girl I am referring to has been with them for many years and does a lot of restaurant work at night after hours when they are closed. I personally would not touch a restaurant pest control job for all the Tea in China.
Nursery stock takes years to build up. I am 67 years old and my children have no interest in the green industry. Does that answer your question? I now do Fert & Squirt part time to help my retirement income. It helps to keep me young. In many ways looking back, I wish I had just done Fert &Squirt all along. It is the one area of the green industry I really enjoy. Fact is I am always looking for nitch markets for chemical treatment and I am researching one right now that I might post about later when I have it all together. I just learned of a different application method that will blow your mind like it did mine.
maybe I am misinterpreting the question, but I don't see how you can survive on a 25% profit margin, as a single operator.
For example, let's say you manage 250 accounts, which you hit 6 times a year. That is a grand total of 1500 applications for the year. Let's say that your average price per application is $60, which is close to mine, that is gross income of $90,000. If you are making 25% profit, you are taking home $22,500.
Just to make 40K profit, with a 25% profit margin, you have to gross 160K. With those numbers, even if you average $75 per application you need 2100 applications for the year which is close to 400 customers. That is working way too hard for not nearly enough reason, if you ask me.
I try to keep my product costs ~25% with overhead, etc., another 25% = profit margin ~ 50%. This is much less for large lawns, and much higher for small ones.
Profit margin is kinda tricky. I could show you accounts where the margin is as high as 80% and some at around 20 to 25%. Let's face it a small property at our minimum charge can really make some money while large properties may not make you has much. It's all time and materials. I can tell you that a whole lot of 5k lawns can make you some big money. Lawns under 5k really make money. The bottom line is do a cost analysis of what you need to make and set your prices accordingly. Big jobs are fine, but a tech that can service say 30 accounts at a minimum charge makes you more money than one large account with the same square footage.