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Large owner salary

Discussion in 'Business Operations' started by dmk395, Nov 2, 2002.

  1. Mow&Snow

    Mow&Snow LawnSite Senior Member
    Messages: 335

    Man, u inspire us all.....
  2. bubble boy

    bubble boy LawnSite Bronze Member
    Messages: 1,020

    John, you truly do inspire.

    everyone should go back to page one and read this thread thru again. by the time you get to the end you will be reminded why we all work so hard.

    probably a good exercise for a monday morning. good thoughts to start a week with:)
  3. kppurn

    kppurn LawnSite Senior Member
    Messages: 426

    "If you think you can, or you think you can't........you're right."

    That saying is right on. I've seen that before in some of your posts and have really tried to live by that. It's taken me a while to fully understand that, but at 25 years old I have come to learn that my own attitude controls where I go, what type of day I have, etc.
    Again, thanks for sharing that expression.
  4. B. Phagan

    B. Phagan LawnSite Member
    Messages: 95

    Great input on the subject guys.

    After over 300 business consultations, I've seen some owners just drain the co of much needed capital, blowing some and living a great lifestyle.

    In my opinion, you must have enough profits for the family as well as leaving some bucks in the business for financial stablility, growth, expansion, new equipment, etc.

    To hit $250k as an owner, gross revenues of $700k and above are attainable......however, consider this income on some of my consultations........

    One co with gross sales of $500k...owner making $20k
    One co with gross sales of $12M...two owners making $100k each
    One co with gross sales of $3m...two owners making 30k each

    All comes down to bringing in profitable sales and applying cost controls and having a disciplined, organized and structured entity.
  5. Nebraska

    Nebraska LawnSite Senior Member
    Messages: 525


    Do you have any consultations with company's that are on the other end of the spectrum; drawing decent wages to provide their family a comfortable living and suceeding at the business as well...

    Considering that a guy with five children and a wife that stays home to raise them could not live off the $30k (comfortably).

    ....of course that scenerio alone could lead this thread even further out into the realm of daycare, school, morals, how much sacrifice does one make at the detriment of your children's and even family's well-being etc...
  6. Evan528

    Evan528 LawnSite Silver Member
    Messages: 2,144

    I just dont understand the point of having all the stress and agrivation of owning a 3 million dollar a year business if your salary is only going to be 30,000 dollars:confused:
    Isnt the whole point of owning a business to make money for yourself and family? Sure the business should have capitol too...... but but should the owner sacrifice a comfortable life for it??? Why not just work 3-4 days a week solo and have the same 30,000 dollar a year salary with much less stress in your life??:confused:
    This is the exact reason that makes me have no imbition to grow my business much above 2 crews. Seems as if the large grossing companies dont provide a salary that is any better anyway..... I dont know about you guys...but im in this to make money!
  7. Mow&Snow

    Mow&Snow LawnSite Senior Member
    Messages: 335

    I just dont understand the point of having all the stress and agrivation of owning a 3 million dollar a year business if your salary is only going to be 30,000 dollars

    Maybe you weren't listning to john. You should go back and reread this thread
  8. B. Phagan

    B. Phagan LawnSite Member
    Messages: 95

    I've had many consultations with companies that are doing well....just want to cross the T's and dot the I's and make sure they have a a professional and objective opinion on how there business is doing.........one recently was a company in a SE state with the owner making $160k as well as putting a grand a month into retirement..........wasn't happy with the bottom line of the business, roughly a 3% net on sales of about $2m. We began systematizing the work and saving lots of personnel and also determined 25% of his income generated from maintenance was a loser all around. $450k was maintenance income and virtually every customer was a loser thereby dragging down profits from landscape/hardscape, irrigation and other income streams.....We recommended selling off the maintenance division which he did for in excess of $500k and his bottom line profits skyrocketed to 12%. This particular fella had a major concern and his wife was adamant about it.......3 young kids and a wife and he's working 70 hour weeks, never spending much time with his family. We also made some operational recommendations and he now works from 8-5, Mon-Fri and spends the rest with his growing family. Very doable if you set your mind to it and instill discipline. Gotta have balance in your life and spend the time where it counts the most...........

    Every business and owner is different in terms of their concerns and objectives, both family and business. We look at all those aspects from A-Z, starting with marketing, selling, writing agreements, business operations and make recommendations based on those issues. Unfortunately, most consultations are done with companies in dire straights, heading to the abyss by the time they seek help......too embarrassed to ask questions and get some help...they sure wouldn't be too embarrassed to get medical help if that chainsaw blade took off a couple of fingers would they? No difference in my opinion. That chainsaw is painful but not making money is also.

    There are many successful green industry businesses out there but many are not. We will work 24-7, 365 and make a little here and there. We typically price the work so we'll get it, profits be damned.......as an example......in my Business Booster Bootcamps, we do a landscape job exercise...everyone is provided the same information and the first step is to determine our total costs to do the job..........I'm always amazed at how many come up with different costs...........I then ask them to write down how much they would charge to do the job, then share those numbers with the group.

    Total job cost for this exercise is $500 inclusive of direct job costs....the average company will price the job at around $750, a $250 gross profit and simply not enough.............assuming you have overhead expenses of 30%, $75 bucks goes to that, then what's left over must also be taxed.....leaving peanuts for all that effort.

    Too many of us think job estimating is the key to profits, not realizing that's just one aspect...been there, done that.....some people say, "You'll never go broke bringing in profitable work" but you can if you don't have all your other ducks in a row.

    There's plenty of folks generating $80k a year and making $50k, a pretty good return with less grief and headaches. You just have to decide what makes you happy. Setting revenue goals of $500k or one million don't really mean much if the profits aren't there. Been there, done that too!
  9. Evan528

    Evan528 LawnSite Silver Member
    Messages: 2,144

    Great post Bill! Thanks!
  10. 65hoss

    65hoss LawnSite Fanatic
    Messages: 6,360

    Just thought that some of you that seem to find this thread interesting my want to look into Bill's website. I spoke with him recently and bought a few of his books. I've been going thru them lately and have found some good advice. Some new ideas and some things that help reinforce previous thoughts. Since I'm in the middle of a wild period with lots of business decisions that need to be made, its really helped reading thru the books.

    If I live to tell about it, JAA, Bill Phagan, and a few others may be on my future Christmas list. ;)

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