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determining if successful business?

Discussion in 'Lawn Mowing' started by fga, May 21, 2004.

  1. fga

    fga LawnSite Silver Member
    Messages: 2,449

    Here i am running a "successful" business, but this year i seem to be getting killed with exspenses that have nothing to do with my business. How do you determine a successful operation?

    On paper with by biz overhead, i'm doing pretty good. but don't seem to have extra $$$ flow at all recently due to a number of things. Me, and my wife seem to be in everyones wedding party this year, as well as my 15 month old daughter the flower girl......... I'm dieing here. I added more payments to credit payoff plan, and alot of other "going ons" are draining me.
    It's going to hurt my biz if i have a tradgedy with the truck, or have to lay out a good amount of money at once. I'm picking up alot of new accounts, and the $$ still finds a way out of my pocket. So i feel good cuz the work is pouring in, but still feel like I'm working for nothing cuz I'm not seeing it.

    When you determine your costs, do you factor in your living exspences, or working exspences alone? Like groceries, electric bill, ........weddings? work costs............i'm great. This year, life costs...... ouch.
  2. Richard Martin

    Richard Martin LawnSite Fanatic
    Messages: 14,699

    Your household budget should be completely seperate from your business budget. Whether or not a business is making money is debatable especially where a solo operator is concerned. I basically look at it this way. If I had to hire someone to go out and do what I do everyday I would probably pay them on the order of 12 to 15 dollars an hour. Add 33% for employee overhead. Anything above that minus operational expenses (do not include state and federal taxes as an expense) is profit. So since I know that my operational expenses are $14 an hour and I pay myself $15 plus $4.95 overhead I have to earn $33.95 an hour just to break even.
  3. DFW Area Landscaper

    DFW Area Landscaper LawnSite Silver Member
    from DFW, TX
    Messages: 2,116

    Yes, I agree with Richard Martin. Personal & business monies should never be co-mingled.

    Yes, my wife is perfectly capable of spending more money than I can ever make in a lifetime. New flash: All women are on everyone's shower/wedding/birthday list. Everytime I turn around, we have to spend fifty bucks on a present for so and so. Last month, we had to spend $30 on a birthday present for one of my wifes co-workers because the co-worker had bought my wife a present for something the month before.

    I guess the options are to either get divorced or get used to it. I'm still trying to get used to it after 9 years of marriage.

    DFW Area Landscaper
  4. BCSteel

    BCSteel LawnSite Senior Member
    Messages: 876

    I agree, work and personal should be kept totally seperate. I put all my bus. earnings into the bus. account and pay my self a monthly salary, flat rate every month, into a seperate personal account. So far, so good. Some times the temptation to dip into the bus. funds is high because I have access to them all, but I know that in the end it will only hurt my company.

    Of course if I had a life other than work and fishing I might have a reason to spend some money.
  5. ken50

    ken50 LawnSite Member
    from tx
    Messages: 142

    After recently getting divorced after twenty years of marriage, I can absolutely guarantee you one thing is true that we have all heard before...It's cheaper to keep her!!!

    Make sure household budget is separate, budget everything, and live within your budget. Easy to say, hard to accomplish.....
  6. gr8cutter

    gr8cutter LawnSite Member
    Messages: 91

    I pay myself and partner 15.00 hr. With payroll related expenses it equals about 21.00 hr. The rest stays in the business. When we build up a good amount we decide on investing in other equipment or taking some money out as a bonus. As far as Ken saying it is cheaper to keep her, I went to a divorce attorney and he had a marble statue that said "Marriage is Grand, Divorce is Twenty Grand." True, so True.
  7. mtdman

    mtdman LawnSite Gold Member
    Messages: 3,143

    My advice: Learn the word "NO!"

    If I let her, my wife would spend all kinds of $$ on junk we don't need. Every so often I have to blow up and go on and on about spending $$ on that stuff. I could give a crap about someone's wedding party when I've got to worry about making house payments during the 5 or so months I don't work. That's my primary concern.

    The thing is, there's always going to be a wedding party, or truck repairs, or the kid needing new clothes. It's part of life and something you have to take into consideration. Whether you are an LCO or work a 9 to 5 job. It's all about living within your means.

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