Profit & Loss

[bensurdi]

I'd like some feedback on P&L.

On 80K gross monthly, what is your cost including your own salary? How much profit do you see?

What is your labor costs?
What is your marketing costs?
etc.

 

[Ken Snow]

There can be a huge range in that Ben depending on how the cost structure is set up, how much overhead staff it takes to process the work, depreciation maintenance costs, etc. I would think a 10-12% pretax profit would be realistic if the owner is taking a salary and working in the business. I would bet thought there are companies that size doing 5-20%.

Sent from my DROID RAZR using Tapatalk 2

 

[Doug Cox]

While we're at it, why not do a profit and loss on 80K a year like most of the guys here actually do. Nice going there, Benji.

 

[Desk Jockey]

Are you looking for benchmark comparatives? I hope, because if you doing those numbers and don't don't have a handle on where you should be, you can be working you ass off turning dollars just for the stress of it.

 

[bensurdi]

Yeah I'm looking for benchmark comparatives to see if we are online with where we should be or if my profits are too low or higher than normal.

 

[Desk Jockey]

Ben Chuck Violand has your numbers, you can go to SFS or have him as a consultant. SFS will save you thousands for the same data initially and then you decide who much more you want to take on with him. Those numbers vary depending on the services you provide as well as many other variables as Ken referred to.

We had Chuck twice as a consultant and have been to SFS twice both well worth the investment.

 

[Shane Deubell]

Ben around 14% after salary but we are mainly commercial and have a lot part-time staff.

 

[bensurdi]

Thats a good idea. I've been to SFS previously but as you grow your company you take in information differently so it definitely wouldn't hurt to go again.

Ben Chuck Violand has your numbers, you can go to SFS or have him as a consultant. SFS will save you thousands for the same data initially and then you decide who much more you want to take on with him. Those numbers vary depending on the services you provide as well as many other variables as Ken referred to.

We had Chuck twice as a consultant and have been to SFS twice both well worth the investment.

 

[Ken Snow]

I believe Chuck is great, but from my experience his offerings are or OO's or very modest size companies without sophisticated accounting and management systems in place. He can help you understand how to read a P & L and help you set up tools to manage the numbers. If this is what you are looking for then I think it is a great investment. If you don't need this kind of help your CPA should have access to industry norms for a variety of service businesses.

 

[Desk Jockey]

Ken our accountant could never come up with any good benchmarks for us.

Chuck would say "a carpet cleaning company of this size should target this" "and if you do primarily restoration that number should be that" "and if you do a good share of commercial work it should be this." I wrote those numbers fast as Chuck was spitting them out.

Unfortunately for Ben (have nothing good to share), I only wrote down the restoration numbers since we are heavy on restoration.

 

[Shane Deubell]

Its a really tricky topic for 99% of us under $1 mill in sales. Percentages and Ratios move up/down fast on small numbers.

Define salary... $50k is my personal definition but others may need/want more

What growth mode are you in?
a small business in growth mode might still have lower margins over short term until they get over their overhead hump.

While a slowing business may have strong margins today but they are eroding year by year 1-2% percent at a time. (inflation is a bitch}

I try and think of it in 3-5 year cycles, just my personal view of the world.

 

[Ken Snow]

Richard- I would never ask an accountant things like that- they are after the fact number pushers not idea people. A CPA firm will most likely have the expertise to do bench marking - forget about our industry only- to help an owner to determine what is "norm" for their size and goals.What the owner decides to do with that info has whole lot of other considerations- much of that revolving around showing little to 0 profit for tax purposes.

 

[Desk Jockey]

Damn I must be a genius, I'm getting good at making little to no profit!

Seriously Ken, I agree, however some of those benchmark numbers helped us to see where we had room for adjustments.



Shane declaring monthly dividends and leasing buildings and vehicles to the company are good options to increasing your income.

 

[Ken Snow]

I totally agree Richard.

 

[Shane Deubell]

Damn I must be a genius, I'm getting good at making little to no profit!

Seriously Ken, I agree, however some of those benchmark numbers helped us to see where we had room for adjustments.



Shane declaring monthly dividends and leasing buildings and vehicles to the company are good options to increasing your income.

Thanks!

I turned a rental into our office last year after our shop flooded real bad. We are still a really young company compared to you and ken, so taxes are not a big problem at our stage.

Plus i fight with every level of govt on every little nickel, literally. Even on garbage tax {its illegal IMO}, you guys dont even want to know the stories i have on taxes...

 

[Steve Toburen]

I believe Chuck is great, but from my experience his offerings are or OO's or very modest size companies without sophisticated accounting and management systems in place. He can help you understand how to read a P & L and help you set up tools to manage the numbers. If this is what you are looking for then I think it is a great investment. If you don't need this kind of help your CPA should have access to industry norms for a variety of service businesses.

Actually, Ken, over the last few years Chuck has totally reinvented Violand and Associates. He has brought in some high-powered partners and they are mostly consulting for million dollar a year and up companies. Put together Chuck's industry knowledge and the sophisticated knowledge his associates brought to the table and everyone I talk with seems super happy.

Steve

PS Other than Chuck teaching one day of SFS for me I have no financial connection with Violand and Associates. (Oh wait, I just taught a one hour webinar for one of Chuck's partners on Value Added Service. I kind of like doing it.)

 

[roro]

Labor cost for techs at 27% of sales works best for us.
Owners salary or drawings not included except for that portion of his time spent physically working as a tech. If he is then it is accrued at ordinary pay scales so that we can determine when it's time for an additional tech

roro

 

[Ken Snow]

Steve- I didn't know that about Chuck's company, thank you for the clarification. I hope that I didn't give the impression that I didn't think he is/was great already, but knowing that adds another level of my respect for Chuck. Back when I first took SFS and even a decade prior already knowing him, he was focused on helping the non- accounting minded cleaner to understand their numbers. This is a critical part of the learning process and it's great to hear that he is doing more advanced levels of consulting and educating. This might be a perfect fit for Ben.

Ross- in an ideal world the owner would salary can be placed into all the categories that he or she works in over the course of the year i.e. if the owner takes a 75k salary it could be 25% booked as labor, 50% in sales/marketing/customer service, 15% management, 10% overhead/accounting. This was just an example, the true numbers would be reflective of the actual duties he or she performs. We have lots of parted out people in our company.