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adamsmowing88
03-10-2010, 09:15 AM
So I roughly know what I need to make per hour to break even in my company, but how do you figure what would be a good percentage of profit. I was thinking like 10% or something like that.....any advice would be helpful.

psparaco
03-10-2010, 09:38 AM
according to the gopher forum's estimator calculators. the numbers are defaulted to 10% profit the company makes and 25% the owner makes.

you can find the calculators here. http://www.gopherforum.com/showthread.php?p=43299#post43299

i have used them sparely since my ballpark bids on properties have been within a few dollars of what the calculators steve provided for us. i love this forum.

jasonw
03-10-2010, 10:31 AM
I have always done well with the 30-70 method. I learned this many years ago while working in a retail electronics store. %70 of all profit goes back into the business and %30 goes to you. If you are not making enough to be happy using this method then you need to raise your prices, lower your costs or find more work. At this point I dont need the money so I am still investing %100 back into the business. I am happy that at least now it is self sustaining. Sure I dont really take home a paycheck but at least I am not dumping money into it anymore.

Steve
03-10-2010, 12:17 PM
So I roughly know what I need to make per hour to break even in my company, but how do you figure what would be a good percentage of profit. I was thinking like 10% or something like that.....any advice would be helpful.

Are you referring to the business calculators? Ultimately you should try and get as much profit as you can. But I did set some defaults to give you a ballpark in the calculators.

adamsmowing88
03-10-2010, 01:20 PM
Heres the run down:

I want to make eventually 40,000 a year. So, 40K/1400[working hours]=28.57/hour.[That includes my truck payment if I had one]. Now my total equipment costs are 2770.12 as of right now including trailer, string trimmer, push mower, and riding mower.[ I would figure differently if I was just using my rider instead of a push mower or vice versa] 2770.12/1400=1.97.
28.57 plus 1.97 = 30.54/Hour. I know I left insurance and all that stuff out, but this is just a ball park figure for now. My question was if I can take 10% of 30.54/hour and that ends up being 3.05 plus 30.54= 33.59, would that be a sustainable and reasonable profit from that? Sorry but those calculators confuse me.

Steve
03-11-2010, 12:45 AM
When you are talking about making $40,000 in a year, are you saying you want to have a take home salary of $40,000?

If that is the case, you will need to charge more per hour to hit that mark.

jasonw
03-11-2010, 01:23 AM
Adam, Only 40K per year. Shoot a little higher bud, Life would implode on me if I took that big a pay cut lol.

adamsmowing88
03-11-2010, 03:02 PM
How would you figure that Steve? Because I did the math, did I not allow enough hours in there for like rainy days and stuff?

mharbert
03-11-2010, 04:17 PM
How would you figure that Steve? Because I did the math, did I not allow enough hours in there for like rainy days and stuff?

Adam, You forgot several variables that I think Steve was saying you'd have to figure out.. Gross $40k and Net $40k are two totally different things (Self employment and other taxes, Gas, Insurance, repairs, savings fund for more/new equipment, healthcare, clothes, advertising, tax preporation, ect)..

I'd assume this is your first season, and I'm like you.. If I can profit 40K my first season, I know I've got a good start. I know I won't be making $40k my first year...

Steve
03-12-2010, 03:32 AM
Adam,

Did what mharbert posted above help? I know this can be complicated, at least initially but remember there is a big difference between gross and net and I want to make sure we are all on the same page here.

adamsmowing88
03-12-2010, 05:11 AM
Yes, Steve it did make since. When I gave the ''rundown'' on my hourly rates and stuff, those were just ball park figures. I know I left out a lot of details. I just wanted to know if my Math was on the right track. I was aiming for 40K a year to take home at the end of it all. Any advice on whether or not, I was calculating that right?

Steve
03-12-2010, 03:48 PM
You are on the right track.

It's very difficult to get a full picture of what your expenses will be until you get into it and start seeing the different issues that pop up that you have to deal with.

As others were saying. Insurance, gas, overhead costs.... whatever.

It seems next to impossible to know what your true monthly expenses will be until you are up and running and you are actually paying them.

Then it is important to keep track what is going out so you know what you need to come in to break even and then make a profit.

JP Landscaping
03-12-2010, 08:47 PM
you are on the right track but put in all the expenses... don't forget self employment taxes! basically if you want to take home 40,000 net of self employment taxes you would need to make about 47,000.

check this out ... http://www.calcxml.com/do/inc05?skn=#results

47000/1400= 33.57

to that you can add all your other overhead per hour and the 10-20% of company profit.. gas, equipment, insurance, maitenance, etc.