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What do you net? (POLL)

Discussion in 'Starting a Lawn Care Business' started by rgodwin, Oct 10, 2016.


What do you net? (Your individual profit)

  1. 30k or less

    171 vote(s)
  2. 30k-60k

    98 vote(s)
  3. 60k-100k

    72 vote(s)
  4. 100k +

    59 vote(s)
  5. I made enough to run for president.

    13 vote(s)
  1. weeze

    weeze LawnSite Fanatic
    Messages: 17,396

    I must be making profit or the IRS wouldn't be making me pay taxes every year would they. :laugh:
  2. snomaha

    snomaha LawnSite Bronze Member
    from midwest
    Messages: 1,742

    You managed to keep it so simple you’re going out of business. Quit blaming everything that is out of your control and take a look in the mirror.

    I will guarantee that the young business owners on this thread will have a more successful business (solo or employees) if they separate their own wage from profit in the business. It allows you to benchmark against other businesses in the industry and helps put a value on your time.
    Cam15 likes this.
  3. BigJlittleC

    BigJlittleC LawnSite Fanatic
    from Chicago
    Messages: 8,266

    Most solos forget they get 2 payments. One as worker and one as owner.
    Cam15 likes this.
  4. BigJlittleC

    BigJlittleC LawnSite Fanatic
    from Chicago
    Messages: 8,266

    This happens to all. Sounds like you never gauged your market. Failed at marketing and never made it past the first growth stage.

    For the young/ new guys. Understand not every market is ideal for another lco. Understand that you need to continue to market and advertise. Without this you'll never gain enough clients to sustain. Profit comes after you paid all your bills and employees. Remember your an employee that should be paid. That money you used to get started needs to be paid back too. Just cause it goes from one pocket to the other it still needs to be moved.
    Cam15 likes this.
  5. prezek

    prezek LawnSite Senior Member
    Messages: 805

    Agree with all of this. Pay yourself something starting out so your numbers don’t deceive you. $12/hour, $15/hour, something. Anything. Account for paperwork time, estimates, maintenance, etc...I will admit I didn’t do this starting out. Maybe it’s a good thing now, because I may have thrown in the towel early on, but you need to know your numbers.
  6. weeze

    weeze LawnSite Fanatic
    Messages: 17,396

    all i heard was blah blah blah i'm a dirty tramp. :laugh:

    i'm choosing to go out of business. i could hang in there and make it work but i don't want to any longer. it's just not worth it. you can make more money and get benefits and 401k working for someone else doing easier work. i'm not 20 years old. i'm 44 years old. getting older has a lot to do with it. this isn't something i wanna do until i'm 70 years old. i never wanted to "expand" and hire employees and deal with all of that headache. countless threads on here about employees quitting and so forth.

    like i said earlier ( but you didn't pay attention) you can't pay your bills on $10k a year which would be 33.3% of my gross income.

    these things you talk about only work once you've reached a certain threshold. they don't work if you are making a low wage that's barely enough to match the cost of living in your area.

    you don't start your own business at the top. you start at the bottom with nothing. my first year i probably made less than $10k gross and brought it up to $30k+ so i think i was going in the right direction. you can only do so much solo. you reach a plateau where there's not really any more work you can take on. you can't work 10-15hrs a day or you'll just get burned out. you have to be reasonable about your expectations and think long term.

    i'm not worried about "right now" i'm thinking about 20-25 years from now when i'm in my late 60's early 70's.

    yeah it happens....but....for the first 8-9 years it was only 1-2 people or maybe none at all....then all of a sudden it was like 10 or more all at the same time. that's 1/3rd of my customer base. it's hard to recover from that. if any business lost 1/3rd of their customers they most likely would go out of business or be forced to lay off a lot of their employees and sell some trucks and equipment.

    as a solo you have less to work with in this sort of thing. i can't sell a truck as i only have 1 truck. i can't really sell my equipment either because i need it to do my work. you can only absorb so much as a solo operation. that's why it's more risky. larger companies do it all of the time. when i worked at honda and the market crashed in 2008 they laid off all of their temporary workers....which was probably 1000 or more people. that's the only reason they have temporary workers in the first place. it's for the bad times. they can lay all of them off to save money and slow production down until things get better. when you are solo you can't do things like this. you can't lay yourself off to save money. :laugh:
    Last edited: Sep 15, 2019
    Greencuts518 likes this.
  7. weeze

    weeze LawnSite Fanatic
    Messages: 17,396

    if we have another recession what do you think people are gonna cut out first? lawn mowing services. so if you are solo you are gonna go out of business since you don't have that much to work with to begin with. if you are a large company with 500-1000 customers you may lose half of them but you'll be able to downsize and keep going. your gross may go from a million down to $500k but that's still enough to live on. when you are solo you can't go from $30k down to $15k as $15k isn't enough to live on. you'll be forced out of business or you'll have to get a 2nd job or whatever to take up the slack.

    working 2 jobs is something i've never wanted to do. i'd rather just have 1 good job than 2 crappy ones.

    i could go get a part time job and keep my business going but i have no desire to go that route. that is why i'm changing careers.

    really i could probably make it through this winter just fine without getting another job....but that is what i don't want to do. i don't want to "barely" make it. i want to make a comfortable living and have a steady income every single year. the lawn business is up and down every year. it's not steady. that is the biggest negative about it.

    sure it depends on your area but here it's very inconsistent work. i want consistent work that will always be there no matter what happens in the economy or with the weather or whatever. i want steady, dependable work and income. this becomes more important the older you get.
    Last edited: Sep 15, 2019
  8. BigJlittleC

    BigJlittleC LawnSite Fanatic
    from Chicago
    Messages: 8,266

    Whatever makes you feel better.

    Since your topping of at 30k either you didn't advertise well or couldn't sell. At 10 years in you should be turning down work since your over booked not desperately seeking new clients. Something went wrong and most likey it was you.

    I hope your able to find your dream no headache no stress job. It sounds your more a worker bee then a boss anyways.
  9. Hayduke

    Hayduke LawnSite Senior Member
    from Oregon
    Messages: 411

    I understand the "owner salary is not profit" concept, but the fact is with a small sole proprietorship, it is different and I can see where Weeze is coming from. At least the IRS doesn't see a difference between owner salary and business profit. No matter what, any money left over after business expenses is getting taxed as income, there is no such thing as owner salary tax deduction with a sole prop. I have a sole prop and I can't take a bunch of my business revenue at the end of the year and treat it differently, even if I decide to save it away for future investment back into the business. With a corp or LLC, yes business profit does get treated differently tax wise than owner salary, and owner salary can be deducted as a business expense.
    To compare net profit margins between a corporation and sole proprietorship is going to be problematic. As a small sole prop I transfer all the money I make from my business into my personal account, so technically I make no profit. But my "salary" is twice the national average. So if Joe Blow and Schmow has a salary that is half of mine, but his business earns 15% profit, does that mean he is more successful than me?
    weeze and hort101 like this.
  10. prezek

    prezek LawnSite Senior Member
    Messages: 805

    I see both sides, but to compare apples and apples, say you gross 100k solo...Have 30k in expenses. Fuel, insurance, cost of goods sold, etc.
    ..you worked 2000 hours. Pay yourself $25/hour for a total of 50k...now there is 20k in profit left over or 20%. Now when guys throw around 10-25% profit margins, you can see where you stack up.
    Cam15, snomaha and MowDaddy like this.

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