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Where does the money go?

Discussion in 'Hardscaping' started by DoubleB, Nov 1, 2007.

  1. DoubleB

    DoubleB LawnSite Member
    from So.Dak.
    Messages: 60

    Hey guys, I know I could have posted this somewhere else, but I want YOUR guys' opinion not some lawn jockies opinion on how they make their money. (no offense to all of you mowers out there)
    As a guy who is just starting out (getting smaller jobs here and there) and is looking to grow in this business. I was curious as to how you guys make your money? Besides the obvious, I am more curious about the formulas i guess you could say, on how to bring home the bacon. I.E. do you guys figure in an hourly wage for yourself in the bid even if your not at the sight? Does your profit margin go straight back into the company or is that what you make a living off of? I guess I'm curious as to how you split everything up (percentage goes here, percentage goes there).
    As I look toward the future, and concentrate on growing I would like to have my company grow ten fold (obviously) but I would also like to be making a pretty penny that I can bring home too.
    Maybe this question is a little personal I dont know, just curious if anyone would want to share.
    Thanks in advance.
  2. RockSet N' Grade

    RockSet N' Grade LawnSite Silver Member
    Messages: 2,454

    Too broad a question to give any specific answers. For me, I found a niche that I was (and still am) passionate about that was not being serviced. In the beginning, I worked just to get work and make payments and build a reputation. As time goes on, you can build on "actual value" with "perceived value" and make better rates whether it is hourly or bid work. The key for me has not to put the money first, but find something that I really enjoy doing that there is a need for........do it well in a timely manner and the money will come. I would also say that it is not "obvious" to want to grow a company ten fold.......I make an extremely healthy net by going in the opposite direction and being a small company and do not want to expand in personnel, but maybe expand into a few more pieces of iron. We have fun on each job, we are booked, we provide high end quality which people are willing to wait for. I guess what I am trying to say, which I have already said, is find something that you like to do and your business will grow.
  3. Stillwater

    Stillwater LawnSite Platinum Member
    Messages: 4,889

    sorry, years, years and years of experience on rakeing cash is kept close and personal. I am sure someone will share some detail But I will offer this advice and that is avoid high debt. protect your credit as if it was your only child and be fair and honest with all your customers and stand behind your work even when you don't have to and remember your work is your business card. I realise this is not what you want but at least I posted something.
  4. cedarcroft

    cedarcroft LawnSite Senior Member
    Messages: 442

    make sure you know your total overhead. that is EVERYTHING you spend money on. paying yourself a salary should be included in your overhead. divide that monthly overhead by 20 days (not 24) and you will know how much you need to make each day. add materials and profit on top and you will do just fine.
  5. cgland

    cgland LawnSite Bronze Member
    Messages: 1,929

    Firstly, you won't make a bunch of money off the bat. Every penny you make needs to go back into the business for advertising, equipment, software, employees, etc. Once you have a decent customer base then you can start pulling a little bit out for yourself. I have been doing this for 10 years now and only a few years ago did I start seeing some decent money coming in for myself.

  6. mrusk

    mrusk LawnSite Gold Member
    Messages: 3,260

    Best advice i can give is to track every single expense on every job. This will help you catch the little things that you forget to price in to jobs. Such as marking paint, string line, silt fence, grade stakes, 2x6s for forms, etc, etc.
  7. Stillwater

    Stillwater LawnSite Platinum Member
    Messages: 4,889

    wow good advice I been doing this for years and years and years and even I could do better in this area. I Don't even want to think about those little things that I know have added up.
  8. VO Landscape Design

    VO Landscape Design LawnSite Senior Member
    Male, from Mt. Pleasant Ia.
    Messages: 365

    Check out some of his books, he has many. Overhead recovery is what we are studying now in class. Very informative man and he relates well to this industry.
  9. forestfireguy

    forestfireguy LawnSite Senior Member
    from nj
    Messages: 601

    Matt is right, track every penny...there really is no blanket formula for success, you also really need to know YOUR operating costs(overhead) and watch your suppliers, some charge deposits on pallets, always return the returnable ones, at 13 bucks apiece they add up faster than marking paint and stakes. One other very good point, to do this kind of work right will require a pretty hefty initial investment(even if you rent equipment) CGLAND really hit home with the message of not getting rich quick........depending on the way you run your busness, plan on at least a few years before you turn really nice profits....It is a long learning curve, one thing to stand by though is don't give anything away....even if you have to.....there is always a way to present a "percieved value" to a client........while recovering it's "true value" elsewhere in your price......and putting it where it belongs....the contractors pocket.
  10. DVS Hardscaper

    DVS Hardscaper LawnSite Fanatic
    Messages: 6,601

    also, operate on a very low budget.

    I have been in business since 1990. And have been doing hardscapes for 11 years, going on 12.

    I'm comfortable. I have a home on acreage with a breeze and a nice view.

    It has not always been peachy. We've had great years and we've have bad years.

    From the school of hard knocks I learned to spend wisely. I never finance more than ONE piece of equipment at a time. I never finance more than one field truck at a time.

    Our bad years have taught me to not buy ANY materials on account. For the last 2 or 3 years 90 some percent of our materials are paid for on the spot.

    I also am very strict with not lettin the guys work more than 45 hrs / week. Overtime will kill your wallet.

    I never employ more than we need. too many employees not being productive will rob you blind.

    Numbers. I track every penny and EVERY production hr affiliated with EACH & EVERY job. If I buy a wood screw that costs $0.32 - I enter it into the job cost sheet.

    And the most critial aspect of makin money - YOU HAVE TO LOVE WHAT YOU DO.

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