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whats a good profit?

Discussion in 'Lawn Mowing' started by MowJo, Feb 10, 2001.

  1. MowJo

    MowJo LawnSite Member
    from KY
    Posts: 70

    Understanding that every business and market is different, what profit percentage should I shoot for with a 2 man mowing crew?

    For example:

    If a 2 man crew grosses $2,000 per week
    and $1,000 is deducted for direct and indirect overhead
    would the resulting $1,000 net profit per week be acceptable?

    What kind of gross does a 2 man crew generate in your area?
  2. KindGardener

    KindGardener LawnSite Member
    Posts: 186

    My 3 man crew (including me) grosses ~ $2000/wk, but that includes both my route ($1400 / wk) and other clean-up & installs.
    I can't say that I am netting half... more than a quarter.
  3. kutnkru

    kutnkru LawnSite Silver Member
    Posts: 2,662

    Is what we strive to beat on Grounds Maintenance.

    Hope this helps.
  4. Randy Scott

    Randy Scott LawnSite Bronze Member
    Posts: 1,915

    I think to answer this question, it is based on what you want to make and what you're willing to do to make that money. My goal is to make the most money I can while being happy. To me that might be $2000 cleared a week, and to the next guy it might be $200. Depends on your position financially and where you want to go. Basically what you want to make is what you will shoot for. Achieve that by whatever means is possible. I know you may have been looking more for numbers than my opinion, but those numbers can be widely different from person to person. I know you will get some numbers from the guys though. Good luck and just my 2 cents.

  5. awm

    awm LawnSite Gold Member
    Posts: 3,354

    I would endorce randys answer ad.The larger the
    volume of work normally the lower percent net.
    This seems to be true in most buisinesses.
  6. parkwest

    parkwest LawnSite Senior Member
    Posts: 678

    This is a question you might want to ask a local accountant. On this site you may want to define what you mean by profit. A guy on another post thought everything after fuel and maintenance was profit. My CPA friend informs me contractors who have been in business for a while typically run 5% to 8% net profit. She says new guys very rarely show a profit. All they see is cash flow and think they are rich. I know a guy who worked his butt off and grossed over $150,000 in his first year by simply going out and under-cutting everyone else price. At the end of the year his accountant told him the bad news - he was in the red by $40,000.

    Let's use an example from above:

    "My 3 man crew (including me) grosses ~ $2000/wk, but that includes both my route ($1400 / wk) and other clean-up & installs.
    I can't say that I am netting half... more than a quarter."

    If you take 120 manhours x $17.00/hr labor cost(includes taxes, insur. office overhead etc.) = $2040 just in labor cost. Yet the guy claims a 25% profit.

    In other words you could gross a million and still loose money.

    [Edited by parkwest on 02-11-2001 at 10:17 AM]
  7. MowJo

    MowJo LawnSite Member
    from KY
    Posts: 70

    Thanks for the replys. I agree that dollar amounts are pointless for comparisons, every business is unique. However I'm interested in seeing what more lawn companies feel is a healthy profit percentage for a two man crew. I'm establishing a new 2 man crew and want to know what percent profit they should be generating for me to make it worthwhile. My question is what percent profit do YOU strive for?

    Kindgardner thinks he falls between 30-45%

    Kutnkru says his profit percent averages 35-40%

    My profit percentage seems to be averaging 45-50% (I am not one of the crewmembers)

    In retail I've heard an industry minimum avg. is 33%. Whats our industrys minimum avg. percent?

  8. parkwest

    parkwest LawnSite Senior Member
    Posts: 678

    With an 85% failure rate in the Lawn maint. industry I would have to guess our industry-wide average net profit would have to be a negative number.
  9. goose

    goose LawnSite Member
    Posts: 177

    There has got to be a happy medium If you are paying yourself $100,000 and get 10 times the growth and only pay yourself $120,000, that is not good .I have a friend with a large company, He does about 20 million a year.I do a lot less and I par myself just as much as he does,you have got to find out where you are happy and stay in that income. I see a lot of people post on here and bad mouth there own business about not having enough money and they work 60 hours a week.Theres 2 reasons for this ,bad billing system or low balling.I love this business I never got into it to make a lot of money , it just grew into a great business .I'm rambling now. Stay positive guys
  10. Evan528

    Evan528 LawnSite Silver Member
    Posts: 2,144

    goose, The diffrence is that the guy with the 20 million dollar bussiness taking home the same amount as you probly isnt touching a shoval or a mower all day while your busting your ass!

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