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Discussion in 'Lawn Mowing' started by Lawnvision, Feb 16, 2008.
What kind of profit margins are you guys realizing(%)
it depends on the area, but I manage to get about 70% profit, 30% overhead, but that changes from job to job
How are you calculating your profit ??
Yea like he said. Just curious what do you figure you charge per hour?
In what field?
i mean net profit margins at the end of the season from all services, you know total net profit. 25 % seems to be working for me, but I wonder if i can do better.
Just under 50% margin last year. But please keep in mind this will erode a bit as my biz gets larger and I incur more overhead. I am a 2nd year business only, beginners will usually have better margins than big vets.
Basically doing maintenance and chemical apps, no installs or irrigation work, for the last 10 years +/- I've been runnng at about a 30% profit margin.
This could be MUCH higher, since I constantly run new trucks and equipment, so the payments keep my profit margins lower.
I'm sure if i ran more used equipment, that I could run closer to that 50% +/-, but that just means I'll be in a higher tax bracket anyways.
One season I DID hit that higher tax bracket, 40%, and my tax burden went up more than the extra that I made.
My accountant showed me my limits, so now I make sure I work hard, but not too hard. Either that, or buy something at the end of the season if it looks like I had too good of a year.
I run a one man operation here, I am preparing taxes at this time. Plus understand that I have only one set of books, I take every loop hole i can to get my profit as low as possible. This years will be my biggest ever, around 60% profit. I'm guessing last year was around 50%.
But one must remember, profit reported to the IRS is very difficult to gage from operator to another. Some guys don't travel as much, don't buy new equipment and have a limited deprecation list. Some don't have the need to advertise. Some guys have cash cows and just don't report but what they feel they need to. And thats OK for a time for a few guy. But if your going to ask a loaded question like "what your profit margin" then be prepared for a huge and at time heated debate with a vasts range in percentages.
About 3 years ago i got bit by the IRS by not having enough payed receipts for the income i showed. And yes i paid neatly 42% of my gross profits that year in taxes.
Understand also that my wife works I have a retirement income, investment income, I'm self employed with 2 business. I do not do my own taxes any more but back when i did. If line 33 was 6 digits you will be filing 6 forms and up and taking every legal loop hole there is.
Even with a 40 or 60% profit line and a six digit gross income. In reality I am not leaps and bounds any richer than the next LCO at the end of the year.
If you work hard and make plenty, somehow we as good American find a way to spend it. And here in-lyes the great reward of entrepreneurship, free Enterprise, and the art of "self employment".
I think a better question and safer question is "did anyone increase there productivity or decline form last year"?
That's where I know my profit margin of 30% is low, but I also have multiple units of everything, including 3 trucks, 2 of which are 2006, as well as buying about $40k in other equipment last year, with upgrades and such, which keeps my margins "low".
GuyS that run equipment that's paid for and have had good luck that year without alot of repairs are obviously going to have a much much higher profit margin.
It's all in how you want to run your own business.