percent profit

Status
Not open for further replies.
F

fisherelectric

Senior Member
Location
Northern Va
I'm curious what net income different size shops make in different parts of the country. Here in No. Va. with 2 electricians and myself I make ~35% to 38% net of total revenues. Both electricians make $30.00/ hr and I do all the paper work. I pay Comp and liability. No bennies but all paid holidays. I'm thinking about paying half their health ins. this year. I do have an accountant/tax guy to do quarterly statements and use Paychexs for payroll. I also use a permit service. I work in the field as much as possible but spend a lot of time doing estimates, bids, checking on jobs, getting material and other things that don't generate an immediate check. I'm pretty much working all the time, all day in the field...all evening in the office (when we're busy, which is usually). I'm curious how that works out with 1,4, or 6 man or larger shops.

edit to add...I work out of my house...no shop but my garage.
 
The 35% Net would be the high end in the construction industry of larger builders. Great that you were able to manage a nice profit.
 
fisherelectric said:
I'm curious what net income different size shops make in different parts of the country. Here in No. Va. with 2 electricians and myself I make ~35% to 38% net of total revenues. Both electricians make $30.00/ hr and I do all the paper work. I pay Comp and liability. No bennies but all paid holidays. I'm thinking about paying half their health ins. this year. I do have an accountant/tax guy to do quarterly statements and use Paychexs for payroll. I also use a permit service. I work in the field as much as possible but spend a lot of time doing estimates, bids, checking on jobs, getting material and other things that don't generate an immediate check. I'm pretty much working all the time, all day in the field...all evening in the office (when we're busy, which is usually). I'm curious how that works out with 1,4, or 6 man or larger shops.

edit to add...I work out of my house...no shop but my garage.
Click to expand...
I would say that is really good margin. What do you mean by permit service? Also, interested to know more about paychex. Currently my accountant / book keeping service issues our paychecks. It's smart to use your house and not pay rent for the shop. Do you do commercial exclusively? Please PM me if you like as not all of my questions might be of interest to all. Thanks, e/m
 
Fisherelectric,

What type of work do you do? I've never hear of anyone making a 38% PROFIT. Could you break out your numbers in % regarding labor, material, overhead relative to revenue? If you can be even more detailed, that would be great. I need to see what I am doing wrong!

I've seen some people interchange the term "margin" with "profit". Normally, "margin" is the $ or % amount left after deducting COGS from total revenue. "PROFIT" is what is left over (hopefully) after paying all of the business' costs.

If you truely have a 38% profit, I sincerely congratulate you!
 
ditto....industry average is around 3-5 percent NET profit....we bust our tails to get 10 percent net....
 
fisherelectric said:
I'm curious what net income different size shops make in different parts of the country. Here in No. Va. with 2 electricians and myself I make ~35% to 38% net of total revenues. Both electricians make $30.00/ hr and I do all the paper work. I pay Comp and liability. No bennies but all paid holidays. I'm thinking about paying half their health ins. this year. I do have an accountant/tax guy to do quarterly statements and use Paychexs for payroll. I also use a permit service. I work in the field as much as possible but spend a lot of time doing estimates, bids, checking on jobs, getting material and other things that don't generate an immediate check. I'm pretty much working all the time, all day in the field...all evening in the office (when we're busy, which is usually). I'm curious how that works out with 1,4, or 6 man or larger shops.

edit to add...I work out of my house...no shop but my garage.
Click to expand...

how much an hour do you pay yourself .This Should be in your costs before profit just wondering
 
Looking at P&L statement for 3rd quarter...total revenue minus all expenses: salaries, payroll taxes, material purchases, insurance, truck repairs and gas, % of my health ins., accounting fees, office supplies, etc, net income was about 37% of total revenues.
We do mostly residential remodeling, some upscale new houses, some service.
Paychex is a service that does all my payroll stuff. They call every 2 weeks for hours. They make all fed and state deposits and send me checks for the guys.Auto withdrawal from my bank account. They do quarterly reports, and FUTA, W2s...everything for about $100.00 amonth for 2 employees. Nothings ever late and they handle any screw-ups. The permit service is a woman I've known for years who I fax permit info to and send a check...she goes to the county and gets my permits...$50.00 for first and $20.00 each for more. Saves me hours at the county.
My guys only go to the supply house rarely to pick-up will calls. I always use their free delivery to get materials delivered right to the job or to my garage so there's no downtime. I'm contemplating another truck and crew but not sure I won't be just shuffling more money around and not insreasing my profit. I find it hard to stay in the field and still get all my other work done and maybe another crew would make my life easier. Been doing it like this since 1980.

edit to add:I didn't include any hourly amount for myself....the net is my income. I'm a sole proprietor.
 
Last edited:
fisherelectric said:
Looking at P&L statement for 3rd quarter...total revenue minus all expenses: salaries, payroll taxes, material purchases, insurance, truck repairs and gas, % of my health ins., accounting fees, office supplies, etc, net income was about 37% of total revenues.
We do mostly residential remodeling, some upscale new houses, some service.
Paychex is a service that does all my payroll stuff. They call every 2 weeks for hours. They make all fed and state deposits and send me checks for the guys.Auto withdrawal from my bank account. They do quarterly reports, and FUTA, W2s...everything for about $100.00 amonth for 2 employees. Nothings ever late and they handle any screw-ups. The permit service is a woman I've known for years who I fax permit info to and send a check...she goes to the county and gets my permits...$50.00 for first and $20.00 each for more. Saves me hours at the county.
My guys only go to the supply house rarely to pick-up will calls. I always use their free delivery to get materials delivered right to the job or to my garage so there's no downtime. I'm contemplating another truck and crew but not sure I won't be just shuffling more money around and not insreasing my profit. I find it hard to stay in the field and still get all my other work done and maybe another crew would make my life easier. Been doing it like this since 1980.

edit to add:I didn't include any hourly amount for myself....the net is my income. I'm a sole proprietor.
Click to expand...

your edit answers everything....redo your calcs with you receiving $1500 gross pay (including taxes) and then what is your percent profit?
 
I work in the field as much as possible but spend a lot of time doing estimates, bids, checking on jobs, getting material and other things that don't generate an immediate check. I'm pretty much working all the time, all day in the field
Click to expand...

I would put my hourly rate that I would expect working in the field into these costs too. 20 hours @ 30/hr per week maybe ??
 
electricguy said:
I would put my hourly rate that I would expect working in the field into these costs too. 20 hours @ 30/hr per week maybe ??
Click to expand...

don't forget the admin time....that's oh too....
 
electricguy said:
I agree.
I was pointing out that I didnt see the owners wages for the field work.
And I think the 1500 Eric Mentioned was for the Admin work :)
Click to expand...

nah, was saying $1500 week for everything....that's $75k a year gross salary for him....i'm curios if their is any profit left after that....
 
electricguy said:
I would put my hourly rate that I would expect working in the field into these costs too. 20 hours @ 30/hr per week maybe ??
Click to expand...

Like this?
5 days x 6 hrs with tools on
less: - 2 hrs on phone = 20 hrs JM wage x $30+ = $ 750

What would a responsible business owner be expected to pay in wages/benes for a capable outsider to do the work you are doing?

Are you capable of doing the various tasks as well as that capable outsider?

Is paying you to do all the administrative minutia the best thing to do?
is paying you to do field work the best thing to do?
 
electricguy said:
Ahh Okay i thought that 1500 was for the month Sorry.
Click to expand...

no...$1500 per WEEK in salary...right now I get the impression he is taking whatever is left over for his salary...
 
If I add in to expenses $1500 per week as my salary, then it's more like 10 or 12% profit. The bottom line is if I was to take that 36% net income and divide it by the number of hours I work, in the field and in the office,I guarantee I would be ...upset. I really don't think I want to know how much it works out to by the hour.
However, the problem I'm wrestling with is if I hired a couple more guys and split my 2 electricians up, freeing me to do all the other stuff I need to do, and running the occasional service call or what ever, how much would I have to increase my bottom line to make it proffitable? And is it worth it.
Edit to add: I've always been a much better electrician that a businessman.
 
Last edited:
emahler said:
no...$1500 per WEEK in salary...right now I get the impression he is taking whatever is left over for his salary...
Click to expand...

Eric, I knew you would get him on track.
 
Thanks for answering my questions fisherelectric. Permit service is an interesting concept. I have heard of the paychex, I will need to look into it, seems like they have pretty reasonable rates. e/m
 
fisherelectric said:
I'm curious what net income different size shops make in different parts of the country. Here in No. Va. with 2 electricians and myself I make ~35% to 38% net of total revenues. Both electricians make $30.00/ hr and I do all the paper work. I pay Comp and liability. No bennies but all paid holidays. I'm thinking about paying half their health ins. this year. I do have an accountant/tax guy to do quarterly statements and use Paychexs for payroll. I also use a permit service. I work in the field as much as possible but spend a lot of time doing estimates, bids, checking on jobs, getting material and other things that don't generate an immediate check. I'm pretty much working all the time, all day in the field...all evening in the office (when we're busy, which is usually). I'm curious how that works out with 1,4, or 6 man or larger shops.

edit to add...I work out of my house...no shop but my garage.
Click to expand...
Northern VA has a couple of very rich counties in it. Were are you exactly there, Fairfax? Be interesting to know what the going rate is to wire a 4000 sq ft house in No. VA. I bet you it tops most of the rest of the country. e/m
 
Energy-Miser said:
Northern VA has a couple of very rich counties in it. Were are you exactly there, Fairfax? Be interesting to know what the going rate is to wire a 4000 sq ft house in No. VA. I bet you it tops most of the rest of the country. e/m
Click to expand...

Hagerstown, Md was on the depressed area list back in the 60's today, try to buy any size home there, and all the counties, in Va south of there are no bargin prices either.
 
Status
Not open for further replies.
Top