What is a Good Profit Margin?? ($0-$1M Business)
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- Опубліковано 1 кві 2024
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We grew our biz to 1/2 M, then backed down to just me - to maintain "healthy" profit margins. Now, I'm older and the physical stress is worse than the potential financial stress from the wilderness. Mike has been teaching this 50+ year old tips on running a proper/profitable business. Granted, it's not a home service business, but the concepts transfer over to low voltage mobile electronics. Let's GO!
Abosutely, I was killing it at 300k with one helper from my garage. But Its not sustainable and growth is the only option.. I have gone through the wilderness at least 3 times and this time was much easier as I expected changes.. But he lays it out pretty clearly.
You forgot how most people tend to spend more money, buy bigger houses and nicer newer trucks as they make more $$$…Spend less as you make more is the name of the game. I’m 5 years , 3 trucks into my service business and growing 30% year after year. I live in the same low rent place and have the same trucks as when I started 💰💪👍
I love this. The comparison of physical stress or financial stress is spot on I own three companies and have 23 employees. Yes, I’m dealing with financial stress and management stress, but I’m free from my business to spend more time with the people I love and doing the things I want to do in life. I would take that over more money but more of my time any day. I’m still making a great income I’m happy with.
I wish this video was available to me a few years ago when we were going through that trough. The stress levels were REAL. Glad I stuck with it and are now seeing the other side of the curve. This is 100% true. Keep up the great work Mike and Team! I am recommending your videos to all the young contractors I know just starting out.
I appreciate it! 🙏🏼
This is 100 % spot on. And in my opinion (after building multiple business - not as many as Mike.. (yet) lol ) But we just passed 600k last year, from 355k the year before, and this year we are projecting over 1M and we are hitting 25% margins. And a-lot of that is heading back into growth..
It’s not profit if you’re plowing it “back into growth”. 😅😅
Appreciate these videos Mike! It’s almost like therapy, you don’t believe it works until someone who has been through it takes the time to walk you through the process. The “S” curve is real.
I been saying this!!! On tik tok I'm on track to 400k a year this year I keep saying 10-20% is great and the comments always say I'm an idiot and I shoulde be at 40%-50% and I was my 1st year but like u said as u grow ur expensive grow also.
I bought a business last april that had grown to be out of the 'wildnerness' hitting 1m in sales...yet covid is over and it was a gold rush for home service industries so it was my tough job to cut with demand down to make to $500k...now looking to be back over $1m in revenue and not put in so much sweat equity.
This video came at the perfect time. Thanks Mike!
Love all the good stuff Mike… on a side note, I think the last time you showed the skinny house..you were just putting furniture in. I’m curious how it did last year and give us a walk around of the finished yard outside! I wanted to air B&B it just to check it out!
This is very good. Thank you
Got my first customer this week! So happy to have all this free information to have helped me get started! Do you think you could make a Copilot video showing how to start a brand new Copilot account for brand new businesses and how to maximize the free version?
Mikeandes.com/copilot ✅
@@HomeServiceMillionaire this is perfect thank you!
This is gold
1st one baby!!!
Because im starting year 2 of my solo part-time mowing business. Is it bad that im not collecting a wage and reinvesting all the profit back into the business so i can buy the needed equipment to get faster and more efficient? I did take your advice and raised my prices this year and didn't lose a single customer. Granted, i only have 14 customers. But for me, that's a good amount with my other full-time job.
From 1989 myself and my dad ran a business with up to 35 employees. We made a lot of money but the stress was very high. When he retired in 2002 I changed the business and went the Chuck n the Truck route. Lot less money but less stress and more freedom. I don't make 90 percent profit more like 35 to 40 percent because I do spend a lot of money on websites , marketing maybe too much. My work is all commercial, it's more difficult to raise prices doing commercial because I am competing with lots of low ballers.
My question would be for the different levels of business how much should a person spend on website SEO and other marketing?
My boss is stuck around 400k. But he doesn’t want to scale or change prices. 🤷♂️
2nd!
why would anyone cross the 200k mark? Makes zero sense.
I rather deal with the physical and metal stress any day
I raised prices 3% after averaging 81% close ratio last year but now I'm down to 66% close ratio and I'm panicking! Losing bids left and right
Watch the video I made a few days ago on this channel about price increases and sensitivity. Remember that macro economic shifts can play a large role in this. A 3% price increase will not impact close ratio to this extent in and of itself own
@HomeServiceMillionaire I agree other factors at play here I was the only service in town and a couple startups have increased pressure too
💪💪💪💪🐐🐐🐐🐐
I love u mike but its literally the same video over and over...
Excellent. I hope it clicks for someone one day so they don’t have to make all the mistakes I made
@@HomeServiceMillionaire ya i guess your right
Do you just dream up these 20% profit margin on a million revenue? Show us the proof? From my experience I am rarely seeing this real world. 20% is extremely rare and if it does happen it’s maybe after 15 years in business. Coffee room services…..floor mat service….air ambulance service are the service industry I am familiar with. And wages is the number 1 killer. Everyone seems to feel they deserve $80k a year….
It is ambitious. Correct. If a location has been 3-5 years in profit mode (not buying trucks, not hiring, not marketing and raising prices) this is the goal and is possible. But not if someone grew from 500K to 1M last year and is in growth mode
Similar story here in UK... Currently at £3m... Profit is still almost non existent... Need to book a coaching call with you soon...