Gross Profit

[palmettolandscapes]

Looking for some feedback on what others typically realize for gross profit on landscape projects. The customer can be custom builder or home owner acting as general contractor ( not spec. home builders).

We usually provide design, final grade, sod, plants and mulch, sometimes irrigation. I'm seeing gross profit on average of 20% and not sure how that compares.

In advance, thank you for your feedback

 

[D Felix]

I have no idea what ours actually is (I don't own/run the company), but 20% without all overhead figures in sounds way too low to me.

Are you figuring in taxes, labor, WC, insurance, fuel, etc, etc, anywhere in the mix??


Dan

 

[heritage]

Palmettolandscapes,
What is your hourly man hour rate after materials? If is's $60-100 Hour Gross and you end up with a 3rd of that net after overhead and taxes, then you made $20-$33 bucks an Hour...33% net profit.....Not Bad. If your rate is $35 an Hour after Materials Your making like $12 bucks an hour.........Not Good Unless you are doing like 10,000 billable hours a year.

Get a good accountant!!!!
Charge Accordingly,

Pete D.

 

[NCSULandscaper]

My profit margin after all expenses, taxes, insurance, etc is around 40-45%. The trick is to find your supplies cheap and have decent markup for them.

 

[impactlandscaping]

We average 30-35% on installs, and as high as 85% on other services such as hydroseeding.

 

[fcl01]

D Felix is right, 20% gross is way too low. I won't even load up for 20% gross. Alot of these guys have 100-150K in equip. to pay for.
We (yes we, I do have a partner) try to Net 50%. Then we divi that up between us. Here's an easy example:
$4000 install job that will take us 8 hrs. no beds, just grass. approx 1 ac. lot size.
1 worker, my partner, myself.
seed, straw, fert, it'll be around $800 to $850
worker will be around $150
We'll set aside $1000 for equip.,ins., bonds, etc.
That leaves us with 2K.
divi. up, gets me and my partner 1K ea.
Pay our own income tax, we will probably end up with $800 or so in our pockets to spend at a strip club. There's my $100/hr.

It seems to work good for us.
Hope this helps.

 

[Avery]

Depends on the size or the company. If you are grossing over a million you can net a smaller percentage than if you are a small company doing 100K in sales.

 

[Randy Scott]

Originally posted by fcl01

That leaves us with 2K.
divi. up, gets me and my partner 1K ea.
Pay our own income tax, we will probably end up with $800 or so in our pockets to spend at a strip club. There's my $100/hr.

It seems to work good for us.
Hope this helps.

Dang, I need to move where you guys live. In Wisconsin 48% of gross profits will go to tax.

 

[Norm Al]

...........18.50%

 

[DFW Area Landscaper]

Can we define margins?

Gross margin = (revenue - cost of goods sold)/revenue

Example:

Lemonade costs $.20 per cup wholesale
Lemonade sells for $1.50 cup retail

($1.50-$.20)/$1.50 = 86.6% gross margin

After the lemonade stand pays it's advertising, labor, insurance and all other costs, all other margins (such as EBITDA margin, for example) will drop significantly below the level of the gross margin.

There's no sense in comparing margins if we aren't all comparing the same margins. Gross margins are something that can easily be compared.

What kind of gross margins are people getting across the country on landscape installations?

Later,
DFW Area Landscaper