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Well, after working for four months I’ve finally found some time to ask another question.
I am wondering if my profit margin is in line with every one else’s. What is your profit margin?
Cody says it should be 70%. Mine is 31%, but if you don’t include the loan payment it’s still only 41%.
So, what’s your numbers and then, what am I doing wrong?
We all have fixed expenses and variable expenses. As your gross sales increase, your fixed expenses (overhead) decreases. At the same time, your variable expenses will increase. The variable expenses(product, labor, fuel, ect.) would be zero if you did no work, therefore, variable expenses are a good thing. Bottom line, the higher your sales, the higher the profit margin. I am at about 55% profit.
I end up each year right around 50%.
So if you both are getting 50% and I’m getting, let’s say 40%, there must be a lot of operators that are getting above 70% to average it out?
I feel it’s important to realize the difference between employees and non employee business’s profit margins. When self cleaning I was between 66-73% annually. I my Manage/employee run area, it is about 15-20%. If the focus is on building the business, the profits will be better. IE: the set monthly expenses -vs- the operating expenses from cleaning. The amount of work plays the biggest part in determining the profit margins.
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