profit range question..ken snow please answer also

[davegillfishing]

what profit are you guys ranging?
what is your goal?
for the older companies, did your profit go up in time? if so was it slow or did it jump in leaps as the company got established more and running smother?
thanks
dave

 

[Ken Snow]

Dave - I have 3 Divisions and 4 separate profit centers within our cleaning business (Hagopian Cleaning Services) and our retail business (Hagopian World of Rugs) has 4 showrooms. Each of these 8 profit centers does different volume and has somewhat different profitability though all are profitble before overhead. The most challenged of our areas have been retail sales of oriental and area rugs as we built up our capacity big time in the heyday of the late 90's and have suffered greatly in the chalenges of 2001 and beyond.

Our cleaning divisions are all profitable with our Rug Care Cleaning and Repair profit centers leading the way at over 20%, followed next by our On Location Cleaing Division in the high teens and then our Fire & Flood Division in the single digits. Our rug cleaning has really hit stride in the last 5 years or so as the massive increase in rug sales oveer the past 15 years has triggered the cleaning need. Last year I believe we cleaned just under 32,000 rugs. We were also in 40+ thousand homes and businesses cleaning carpet and upholstery.

We are working to revitalize our restoration division which has shrunk from over 3 million in the late 90's to only about 1.3 million last year. This year should end up closer to 1.5

Ken

 

[davegillfishing]

thanks ken.
man i would love to come see your operation sometime. it must be mind blowing.
we are in our 2nd year going into our 3rd in 6 months and are at about 35% now. i am trying to get a grasp on if it will go up as we grow or will drop for a while then go up..man i wish i stayed in school longer..
dave

 

[Ken Snow]

If you are an owner operator Dave it will go down for sure and will also probably have some peaks and then valleys as a percent as you increase staff and infrastruction as you grow. I put some examples of volume with declining % of profit annd the profit dollars to show how the velocity of volume can offset the decline of % profit in real dollars.

35% of 200,000 is 70,000
30% of 400,000 is 120,000
25% of 1,000,00 is 250,000
20% of 3,000,000 is 600,000
15% of 5,000,000 is 750,000

Any of these profit % would be of strong interest to any investor, pros[ective buyer or lending facility, although they would be more apt to look at a larger volume as a better bet for long term sustainability.

Ken

 

[Brian R]

My company doesn't make a profit because I pay myself too much. :mrgreen:

 

[Ken Snow]

LOL Brian~ if your a C Corp that is good, if your an Sub S or sole proprietor it doesn't matter tax wise, though it is always good to find ways to reduce taxable income which is quite a different issue than the profitability of operations.

 

[Brian R]

LOL Brian~ if your a C Corp that is good, if your an Sub S or sole proprietor it doesn't matter tax wise, though it is always good to find ways to reduce taxable income which is quite a different issue than the profitability of operations.

I tried the corp thing for awhile and just didn't like it. I dissolved and went back to being a sole. I know tax thing doesn't matter, it was just funny to me.

 

[Ken Snow]

Might look into S- Corp Brian, it gives you some protection of incorporation with tax status as Sole. Hate to see someone lose their house and other personal assets if a tragedy occurred. St the very least insure the he$$ out of yourself.

Ken
Ps it was funny :-)

 

[Brian R]

It was an S-corp. To many rules and regs for me.
I am going back to renting for a bit and don't have many assets except for my business...which I believe I could start over quickly if "taken".
Some money in the bank so maybe that would be a problem but that is as liquid as it gets.

I will stay a sole for a least a while.

I'll start a new thread about this