Profit margins

Discussion in 'Lawn Mowing' started by dmk395, Aug 30, 2001.

  1. dmk395

    dmk395 LawnSite Bronze Member
    from Ma
    Posts: 1,003

    Just curious what you all shoot for, I know a large company often looks at 10% as being good, however what about some of the smaller operators here.
     
  2. GreenQuest Lawn

    GreenQuest Lawn LawnSite Senior Member
    Posts: 822

    whats a profit:D

    on paper I like the loss

    for now
     
  3. geogunn

    geogunn LawnSite Gold Member
    from TN
    Posts: 3,010

    I'm afraid I cant live off of the loss on paper.

    and 10% of say...$100k is $10k and I can't live off of that either.

    I do much better than 10%.

    GEO
     
  4. dmk395

    dmk395 LawnSite Bronze Member
    from Ma
    Posts: 1,003

    For a large company 10% of 10 million isnt too shabby.
     
  5. GreenQuest Lawn

    GreenQuest Lawn LawnSite Senior Member
    Posts: 822

    I never said I didnt make money.

    Are you talking profit as the amount you take from the company?

    To me that is not profit.

    I make good money BUT when tax time comes the CPA does a great job of showing I dont.
     
  6. David Gretzmier

    David Gretzmier LawnSite Gold Member
    Posts: 3,645

    when you want to borrow money to buy a house, get credit for a large purchase, or sell your business, they all want to see your tax forms. If you show year after year of liitle or no income, guess what- you ain't gettin squat. I report all sales and all expenses and show a reasonable profit.

    I hear of profit margins from 10% all the way to 60%. a solo with helper should run in the 80-100k range, and I would put that in the 40-60% profit range or take home of 32-60k. a multiple crew setup on 250-500k should be close to 25-30% meaning 60-150k for the owner before tax. the drop is obvious, the owner cant do all the work. It seems in pro and turf as you go up from there the margin decreases as you get into the millions. the overhead on shop and trucks should be linear, but you need more backup stuff, and loads more shop space. Rain days cost you lots more with 10 trucks idling than 1. you have to pay folks 40-60k to help manage big companies, and more to manage really big companies. that is why 10 million$ comanies only do 5-10%, they spend ALOT on senior managers. but the owner is taking home 500k+ so he isn't complaining. Dave g
     
  7. Guido

    Guido LawnSite Silver Member
    Posts: 2,085

    I got a few e-mails on this and some guys were confused about what this meant. That 10,30,or 60% profit is AFTER you pay your own wages. Its what the business makes after everything is said and done.

    Hope this helps!
     
  8. Evan528

    Evan528 LawnSite Silver Member
    Posts: 2,144

    I guess my bussiness profits zero then! Im am not a corp. and I dont give my self a weekly check. My salary is whats left after business expenses! One week it can be $1000 and the next it can be $2,000.
     
  9. John Allin

    John Allin LawnSite Bronze Member
    Posts: 1,489

    DaveG isn't too far off.
     
  10. Guido

    Guido LawnSite Silver Member
    Posts: 2,085

    to pay yourself (unofficially). You need to make money for your family, house, pocket, etc. AND your business needs to make money to repair and replace machines, expand, etc.

    Its not good practice to run your personal life out of your business money. It should be two seperate deals.
     

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