[alanwilson]

yes dave so how come with a turnover of £50k you say you would be doing well to see pre-tax profits of £30k??

I can assure you that as an employer of 2 men ( I know, huge business and all that) that there is no way any business could operate on such huge costs before wages.

we work on the 3 times rule, basically this means for a member of staff to justify his wage, he needs to bring in 3 times what he gets paid. Basically one third is his wages, one third for costs and the last third goes to me.

most of our work is commercial (about 85%) and I clean the residential on my own.  The commercial can be done in any weather and is.  Also we operate on a 36hr week, I still have to do the residential work after that so all in I work about 46/47hrs per week, however this is easily done as we have 6am starts Mon/Tue/Wed and normally don't finish until around 6 or just after.

[dai]

If I earn over £500 by Thursday, then Friday doesn't get done. £150 is a good day for me, but my running costs are a lot less than some others. Bare in mind I am an O.A.P, have no debts, and my pension comes on top of what I earn.
I do see some prices quoted on here as totally unrealistic, but hey!, if they can get it, good luck to them.

[Moderator David@stives]

alan

I operate on about 40% net profit margin

I get to keep about 40p in the pound before depreciation and cost of finance

When i was a sole trader it was about 60%

[Clive McDonald]

An old jewish market trader explained retail to me. I never forgot.

Takings must be(at least) ten times rent. Stock is five tenths and expenses another tenth.This gives a net of three tenths.

As regards what the proper model is for window cleaning i'm not sure, but Alan Wilsons three times rule may be close.

[alanwilson]

slumpbuster - you know it!

A net of three tenths is the golden rule of profit margin for about 90% of successful businesses. 

Think about it this way - a decent window cleaner doing commercial work (so no 'not todays' and 'rain' stoppages) will clean £900 per week (based on run of the mill pricing of £30 per hour).  So if he works 36hrs per week and loses 5 hrs of that to lunch then he will have done around £930. We'll use £900 as a guide.

Assuming van operating costs of £150 (upper limit) per week,

£900 - £150 = £750.

Now if I were to pay my staff one third of turnover that would be £900 / 3 = £300 per week.

So if you take £300 from £750 you will be left with £450 for yourself - however, who on here would work for £300 a week?  Not many I'm sure, so in order to keep my staff happy I need to pay them more than £300, this I can do because unlike most other businesses I don't have large retail premises and sales staff to pay for, I have myself, my son and my staff.

So to sum it all up by keeping overheads reasonably low, I can safely pay my staff well over 33% turnover. 

Do I have to?  NO

Is it worth paying them more?  Yes, they aren't any worse off than if they had their own window cleaning round by the time they set the round up, buy a van and equipment and everything else that comes along with it.

I don't make much from each staff member but that is the way I like it, they get paid well, are happy with work, and I have a much more sustainable and secure business.

So my advice to anyone considering employing - be prepared to pay more than the usual £60 a day, anyone worth keeping will demand considerably more than that, and deservedly so.