As a successful carpet cleaning sole trader you should be running a margin of 40%. In other words, you take 40 pence in every £1 you earn. This would be a business that is investing in its future.
Now I'm not talking about the grim carpet cleaners that work from old cars that achieve 95-100% margins. What they earn, they take. Usually 15k per annum (£10950 after tax and NI) for fAgs and booze.
With a 40% profit margin your incomes as a 1 man band should read as follows,,,
For a modest, low(ish) income (same as a bin man),,,
Gross annual takings (what you bring in) £64000 - Nett after running costs £ 25600 - Gross Taxable wage including NI £ 25600 - Nett wage after tax and NI (your money) £ 18688
If your aiming for a good middleclass wage (same as accountant),,,
Gross annual takings (what you bring in) £108000 - Nett after running costs £ 43200 - Gross taxable wage including NI £43200 - Nett wage after tax and NI (your money) £31536
The more you expand into employing workers the more you margin takes a hit. So as a 3 van carpet cleaning set up with 6 workers, your margin would equate to around 8%. The staff you employ are all costs to your business. That hits margin like a sledge hammer. The business would typically take 8pence in every £1 earned.
Ok, so your company pulls in £770000 - Nett after running costs, wages including your own etc - £61000 - Taxable takings your company has generated £61000.
Hope this clarifies where you are and where you should be aiming for.
