Clean It Up
UK Floor Cleaning Forum => Carpet Cleaning Forum => Topic started by: Blacky on January 21, 2013, 09:08:28 pm
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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.
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And your point is?
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Gotta agree with Paul. I don't get your point!!
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Whilst you are happy to give us a lesson in business, the only way that you can make a margin or profit of 100% is if you have done nothing and it has not cost you anything to achieve that profit.
If you can tell me a way of achieving that in carpet cleaning I am all ears.
If you mark something up by 100% it will give you a net profit or margin of 50%.
Peter
www.carpetcleanercardiff.com (http://www.carpetcleanercardiff.com)
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WHAT!!!!!
My binmen are on £64k , bloody public sector are coining it, I'm off to get a job.
Apart from that a lot of assumptions in there, a carpet cleaning business turning over £770,000 net would be doing what exactly gross,1.5 million ?
I don't know any CC businesses that do anything close to that and I know some
big ones..
Many CC I suspect would be quite happy with what the a binmen earn.
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" Usually 15k per annum (£10950 after tax and NI) for f*gs and booze. "
If they are earning 15k gross, they should not be paying any tax after expenditure/fuel is taken out with todays very generous personel tax allowance's.
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I think he ment you'd have to turnover 64k to earn what binmen earn (according to blacky) i.e. £ 18688.
Sorry black but alot of blox in that post. A turnover of £108,000 for a take home of £31,500??? ???
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I think he ment you'd have to turnover 64k to earn what binmen earn (according to blacky) i.e. £ 18688.
Sorry black but alot of blox in that post. A turnover of £108,000 for a take home of £31,500??? ???
Yes that is correct.
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thats alot of carpet washing for a modest wage :-[
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WHAT!!!!!
My binmen are on £64k , bloody public sector are coining it, I'm off to get a job.
Apart from that a lot of assumptions in there, a carpet cleaning business turning over £770,000 net would be doing what exactly gross,1.5 million ?
I don't know any CC businesses that do anything close to that and I know some
big ones..
Many CC I suspect would be quite happy with what the a binmen earn.
You've got it wrong. 770,000 was the gross.
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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 f*gs 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.
Oh dear, someone doesn't t know what he's talking about :'(
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WHAT!!!!!
My binmen are on £64k , bloody public sector are coining it, I'm off to get a job.
Apart from that a lot of assumptions in there, a carpet cleaning business turning over £770,000 net would be doing what exactly gross,1.5 million ?
I don't know any CC businesses that do anything close to that and I know some
big ones..
Many CC I suspect would be quite happy with what the a binmen earn.
You've got it wrong. 770,000 was the gross.
Ok I must have read it wrong, I will rephrase it,
I don't know any carpet cleaners who do sales of £770,000
Are you doing this, if so congratulations you should be writing courses and books on how you did it.I mean that's 6 jobs a day at around 500 pounds a ticket.
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Be interesting to see what peoples gross margins actually are if anyones brave enough to tell us.
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Ok, let's start with you.. ;D
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John follows my lead, 40% of nothing is nothing after all its grim t'up north.
Shaun
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Utterly buttery
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Utterly buttery
;D
Flora man me self, apparently it lowers cholesterol .
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WHAT!!!!!
My binmen are on £64k , bloody public sector are coining it, I'm off to get a job.
Apart from that a lot of assumptions in there, a carpet cleaning business turning over £770,000 net would be doing what exactly gross,1.5 million ?
I don't know any CC businesses that do anything close to that and I know some
big ones..
Many CC I suspect would be quite happy with what the a binmen earn.
You've got it wrong. 770,000 was the gross.
Ok I must have read it wrong, I will rephrase it,
I don't know any carpet cleaners who do sales of £770,000
Are you doing this, if so congratulations you should be writing courses and books on how you did it.I mean that's 6 jobs a day at around 500 pounds a ticket.
You need to read the last section again. I mention 3 vans and 6 workers to pull £770,000. No sole trader could ever gross this.
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I dont know why people are so shocked by this. 40% is a superb margin. Large companys take 5% or less.
I bet John Kellys margin is around 18-20%
If you want a 100% margin on what you earn, get a job. If not, get your ass into gear and work hard.
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Blacky
I would be interested to know what you have allowed for expenses on your turnover £64000. that leaves you with only £25600.
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We don't have any margins..........we clean right to the edges. BOOM BOOM!!! Thank you, I'm off ;D
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And what about VAT if you're earning £77000??
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Sorry Blacky
Utterly meaningless figures backed up by an overactive imagination :o
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my wee take on it
http://www.youtube.com/watch?v=Uuqry9SMjQM
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If I recall my gross margin when I was carpet cleaning was around 52%.
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Every year it has broadly been the same for me ,
around a third of turnover marketing,equipment, vehicles.
around a third wages chems
around a third profit
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WHAT!!!!!
My binmen are on £64k , bloody public sector are coining it, I'm off to get a job.
Apart from that a lot of assumptions in there, a carpet cleaning business turning over £770,000 net would be doing what exactly gross,1.5 million ?
I don't know any CC businesses that do anything close to that and I know some
big ones..
Many CC I suspect would be quite happy with what the a binmen earn.
You've got it wrong. 770,000 was the gross.
Ok I must have read it wrong, I will rephrase it,
I don't know any carpet cleaners who do sales of £770,000
Are you doing this, if so congratulations you should be writing courses and books on how you did it.I mean that's 6 jobs a day at around 500 pounds a ticket.
You need to read the last section again. I mention 3 vans and 6 workers to pull £770,000. No sole trader could ever gross this.
Yep the questions the same based on your example, which you have not answered.
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Be interesting to see what peoples gross margins actually are if anyones brave enough to tell us.
After 6 months trading, I'm still only pulling £100 per week out of the business, for fAgs and booze. So it's a good job I don't smoke, and my girlfriend is loaded, but don't tell the wife.
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£108000 - Nett after running costs £ 43200
In this example, what has circa £3900 a month been spent on? Because £900 a week sounds like high overheads for a man in a van carpet cleaning business?
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Your net figures aren't in sync with Tax and NI which is 28%.
You haven't knocked the personal allowance off any of the
figures.
This would have a big impact on the £25600 figure.
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Can i just say that 83.56% of all statistics are made up ;D
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£108000 - Nett after running costs £ 43200
In this example, what has circa £3900 a month been spent on? Because £900 a week sounds like high overheads for a man in a van carpet cleaning business?
Yes it is a lot, but if you wanted that annual turnover that would be the cost to you of achieving it.
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Can i just say that 83.56% of all statistics are made up ;D
;D
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I disagree..
that expense is very high, especially for an established business..
I know of at least 1 other CC on here besides me, who spends very very little on advertising for a start, so that cuts that figure by a heck of a lot.......
Your post is at best a generalisation, and at worst pure fabrication.....
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Every year it has broadly been the same for me ,
around a third of turnover marketing,equipment, vehicles.
around a third wages chems
around a third profit
Perfect. A real life example that we can use.
Jason has a 33.3% margin. He takes 33pence taxable wage for every £1 he generates. If he turns over £80000 in the year his taxable wage will be £26400. After tax and NI at 27% his take home pay is £19272.
This is not fiction. The man has told us his margin is 1 third of his turnover.
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So can we take it then that the example you gave at the beginning was your own, with employees and 3 vans out generating sales at £770.000,because you have not been clear on that.
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blacky why do you feel the need to type posts like this . you sound like an effing preacher but all you do is bore people . go get a life
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Hi Guys
An intersting topic.
Jason has wages and profit, for me they are combined so that gives me 66%, assuming a third for marketing, when in reality about 20 %, so 80% profit.
Cheers
Doug
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It is a stupid post really because true profit is net profit and there are many other things to take into account other than wages. Blacky I do not think understands it himself. I do not know any business that will return a net profit anywhere near 80%.
Even if you are working for yourself you have to put a price on you time. Even if you chose a paltrey amount of £20 per hour and are charging £100 per hour for your time that gives you a margin of 80%. That is fine if you can get that rate per hour are willing to work for that rate an hour, do not have to travel anywhere, have no advertising costs or equipment, chemicals, run a vehicle, tax etc, etc.........
Peter
www.carpetcleanercardiff.com (http://www.carpetcleanercardiff.com)