net / gross tax income question

Discussion in 'General Industry Discussions' started by PORTER 05, Feb 28, 2009.

  1. PORTER 05

    PORTER 05 LawnSite Senior Member
    Messages: 642

    Hey guys i was wondering what the average % of net income is about right for a landscape company. We are doing weekly lawn mowing, spring/fall clean-ups, tree work, ect , also snow plowing in the winter. I am looking for the # that "me" the owner would be seeing after i pay all employees, all exspenses, all purcheses and all taxes, and was wondering after all that what % is about right compared to how much you gross in the landscape biz.

    After doing taxes all week long im thinking that im around 36% after paying everything , paying all my taxes and buying a new dumptruck, this is what ill take home 36% of the total gross income i brought in in 2008.

    Sorry if this is a little confusing , just looking to see if this is about right , really high or really low, i want to make sure to make changes if it is to low.

    Thanks alot!

    CLARK LAWN LawnSite Silver Member
    Messages: 2,526

    im about 30% so id say you are doing pretty good
  3. Perfect Image TLM

    Perfect Image TLM LawnSite Senior Member
    Messages: 267

    Sounds pretty good, I am right around there as well...
  4. Runner

    Runner LawnSite Fanatic
    Messages: 13,497

    What you're talking about is referred to as gross profit margin,..commonly known as gpm. If you guys are doing 30 and 36%, you guys are doing real well.
  5. FYS777

    FYS777 LawnSite Silver Member
    Messages: 2,305

    so say if you gross 100k you would net 36k after all expenses, is this correct, = 36%

    then I guess I am doing very well also, kinda gives an idea what other parts of the country is doing.
  6. topsites

    topsites LawnSite Fanatic
    Messages: 21,653

    Yes, I am a firm believer in the rule of thirds, if this is something you understand then
    I might mention the 33% bit can also apply to cost though it's in a bit of a rough way,
    as well as taxes, so that: 1/3'rd cost, 1/3'rd tax, 1/3'rd profit...
    And it doesn't always work out that way but it tends to hold true over time.

    So roughly speaking, but yes.
  7. PORTER 05

    PORTER 05 LawnSite Senior Member
    Messages: 642

    FYS777 , are you doing 36% after or before taxes are paid?
  8. FYS777

    FYS777 LawnSite Silver Member
    Messages: 2,305

    Those are examles but after taxes, for the last 2 years have been running 12% higher then said above, I do nothing but full maint, no installs. some bark jobs, up to 7 cu yards, all within 9 month season.
  9. FYS777

    FYS777 LawnSite Silver Member
    Messages: 2,305

    just wont to add to though its different in different parts of the country,
  10. FYS777

    FYS777 LawnSite Silver Member
    Messages: 2,305

    Another add, I do all my own repair and manit,work on all my equip. I dont no if that makes the difference.

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