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Lets talk margins.

Discussion in 'Business Operations' started by 205mx, Mar 14, 2013.

  1. 205mx

    205mx LawnSite Silver Member
    Messages: 2,392

    Sorry for posting several times. I'm planning to start saving now for 2014 to purchase a dedicated landscaping truck. I like that you still have a very decent profit margin even with equipment purchases.
    Posted via Mobile Device
  2. macgyver_GA

    macgyver_GA LawnSite Senior Member
    Messages: 826

    ~37% for 2012
  3. jrs.landscaping

    jrs.landscaping LawnSite Silver Member
    from Maine
    Messages: 2,763

    Making routes tighter and applying labor more effectively has helped keep our margins in check even with higher fuel/labor costs. I wish we would have come up with a more comprehensive plan for unit replacement sooner. Some units were 12 years old before we thought of replacing them. The next 4 years are projected to have similar margins due to growth and unit replacement.
  4. snomaha

    snomaha LawnSite Bronze Member
    from midwest
    Messages: 1,244

    Even if a sole proprietor you are lying to yourself unless you plug in a fair market wage for yourself.
  5. 205mx

    205mx LawnSite Silver Member
    Messages: 2,392

    Tightening the route up will be huge for me this year. Really going to try to map things out and try to stick with it. I like your idea of going ahead and planning for equipment replacement ahead of time. As in Years Ahead of time
    Posted via Mobile Device

    DLONGLANDSCAPING LawnSite Bronze Member
    Messages: 1,418


    2012 profit: 48k
    2012 profit margin: 26% on the dot

    2013 goals:
    Profit: $65k
    Margin: 31%

    Which means i actually don't have to many more jobs, i just have to be a lot more efficient and operate very lean crews.

    Knowing your numbers is the only way a company can succesfully grow. If you are at a 40% profit margin you either have zero bills, live at home, have your parents pay for your gas, dont pay taxes, dont pay insurance, or are cutting 10 lawns with your parents walk behind mower, or ALL OF THE ABOVE!

    Take a small business class, take notes, and then bring those notes to your office and find out what your numbers are. I have never taken a business class that hasnt benifited myself or my business in some way. Education is the only true way of knowing how to succesfully operate and run a profitable business and know that you are actually doing it.

    My landscaping margins are almost embarrassing how high they are, kind looks like im a crook stealing money from my clients.
  7. 205mx

    205mx LawnSite Silver Member
    Messages: 2,392

    My posted profit margins aren't just on mowing, dear mr sir ;-) it includes fences, mulching, trimming, and minor masonry work.

    And I'm sorry but I don't include my mortgage in with my companies numbers. And yeah I have bachelors degree and have taken several great courses. Some with incredible instructors.. I will say I have taken a few remedial courses and also a few courses that felt very repetitive.

    It sounds like you run a pretty tight ship and a heck of a company.
    If your goal is31%, you could see where another 9% isn't impossible for a third year business. Now, my first two years I didn't even make any money, just bought equipment. So I started 2011 in the whole. I scored two well paying accounts this past year. (total of 14 acres right next door to each other) so that really boosted my numbers. I don't even live near my family. 300 miles actually. My wife and I own a home in Franklin, TN and live comfortably. The next few years are going to be expensive and I am projecting 2014 to have record LOW profit margins as I plan to expand the business then.

    I admire the work you've done and hope to achieve as you have.

    "If you are at a 40% profit margin you either have zero bills, dont pay taxes,, "
    This really has little to do with profit margins

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    Last edited: Mar 16, 2013
  8. grassmasterswilson

    grassmasterswilson LawnSite Platinum Member
    from nc
    Messages: 4,966

    Was hoping this thread would lead to tips on how to increase margins but it seems to be a lot of back and forth.

    What are you guys doing in 2013 to try and increase profits?
    -tighten routes
    -be more efficient with gas and on the clock hours
    -price more accurately-are you a growing company trying to build a customer base or an established one with a good base focusing on up sells?
  9. 205mx

    205mx LawnSite Silver Member
    Messages: 2,392

    Im going to try to do both. I want to sell more Clients full service, and also would like to try to grow by about 30% in terms of client base
    Posted via Mobile Device
  10. 32vld

    32vld LawnSite Gold Member
    Messages: 3,983

    Profit margins are not always of importance.

    For large corporations, concerns about stock prices, buyouts, gambling err I investing in stocks people find all kinds of stats important.

    To a small local business profit margins can alternate from good to bad every year just based on needing major purchases. $40,000 new truck, $12,000 mower, etc.

    Just looking at the profit margin going to almost zero because a new truck was bought does not mean the business is a bad one or that he had a bad year.

    For most small businesses it is an overated statistic.

    And to compare an antique furniture business is pointless. They buy something low and will sell high but that piece can sit for 1 or 2 years before it sells.

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