Net Profit

jed1124

Active Member
Location
NW,CT
What do you think a good net profit is for a legitimate tree care company (paying taxes, comp, liability) of 2-3 employees with a gross of 500k-750k? I've always thought 20%-25% but I really don't know where I got that number from.
We are all getting to the end of the year and it's number crunching time. Keep in mind I'm talking about an industry average and am not looking for anyone to disclose any personal information.
 

VenasNursery

Well-Known Member
Location
Michigan
What do you think a good net profit is for a legitimate tree care company (paying taxes, comp, liability) of 2-3 employees with a gross of 500k-750k? I've always thought 20%-25% but I really don't know where I got that number from.
We are all getting to the end of the year and it's number crunching time. Keep in mind I'm talking about an industry average and am not looking for anyone to disclose any personal information.
1/3 company
1/3 labor
1/3 profit
Roughly
 

Reach

Well-Known Member
Location
Atglen, PA
What do you think a good net profit is for a legitimate tree care company (paying taxes, comp, liability) of 2-3 employees with a gross of 500k-750k? I've always thought 20%-25% but I really don't know where I got that number from.
We are all getting to the end of the year and it's number crunching time. Keep in mind I'm talking about an industry average and am not looking for anyone to disclose any personal information.
I believe you’re on the right track for an industry standard range, I’ve always used 20% as an industry standard number.
 

RopeShield

Well-Known Member
Location
Ontario, Canada
What do you think a good net profit is for a legitimate tree care company (paying taxes, comp, liability) of 2-3 employees with a gross of 500k-750k? I've always thought 20%-25% but I really don't know where I got that number from.
We are all getting to the end of the year and it's number crunching time. Keep in mind I'm talking about an industry average and am not looking for anyone to disclose any personal information.
Can you explain how you or where you got this number? 2-3 Employees and 500K?
 

Sfoppema

Active Member
Location
Central MA
Seems average, one crew can bring in that much easily If your charging the right amount on jobs, 500-700K isn’t hard to do
Deevo,
Is this a 2-3 man crew with a tree mek with a 24" chipper and a mini? Or a 2-3 man crew with an f-350 and a 12 inch chipper just climbing (obviously)? There's a big productivity difference as well as overhead difference. I'm curious what type of 2-3 man crew set up can easily bring in 5-700k per year. I'm still a little rinky dink. We probably only get 1200 hours a year in production. Maybe less. If your crew is capable of working 1500 production hours, you're essentially getting paid 400/hr for your 2-3 man crew to bring in 600k. Seems like you'd probably be paying out for 1800-2000 hours to get those 1500 hours of real production.

If you are doing 2000 hours of real production then 300/hr on average to get to 600k. What caliber of persons are on these crews and what is their equipment? How much are they being paid? How much does the salesman/estimator get paid? What is your profit?


I run a 2-3 man crew with mini and second hand dump trucks and nice 12" chipper and try to get 1600 for two guys and 2000 for three. Nobody gets paid less than 25/hr. Some days you get more, some days less. I own everything I have, am on every job, and do all estimating/quoting. Brought in 250k in 2018, but about 60% was profit. (paying all taxes/comp/etc as I should with legit payroll) I feel like I'm doing pretty good, but after reading your 2cents I'm wondering why I'm only halfway to what a similar crew can easily obtain?

Well, maybe TMI, but I really am curious. Don't know how I could get away with charging more, lots of competition around here.


I've got a pretty mint "algorithm" for pricing out equipment that I got set up with in a class I took at school that was set up, literally, for running a single (or multiple) tree crew company. So, that's how I set up my rates.
 

Sfoppema

Active Member
Location
Central MA
Deevo,
Is this a 2-3 man crew with a tree mek with a 24" chipper and a mini? Or a 2-3 man crew with an f-350 and a 12 inch chipper just climbing (obviously)? There's a big productivity difference as well as overhead difference. I'm curious what type of 2-3 man crew set up can easily bring in 5-700k per year. I'm still a little rinky dink. We probably only get 1200 hours a year in production. Maybe less. If your crew is capable of working 1500 production hours, you're essentially getting paid 400/hr for your 2-3 man crew to bring in 600k. Seems like you'd probably be paying out for 1800-2000 hours to get those 1500 hours of real production.

If you are doing 2000 hours of real production then 300/hr on average to get to 600k. What caliber of persons are on these crews and what is their equipment? How much are they being paid? How much does the salesman/estimator get paid? What is your profit?


I run a 2-3 man crew with mini and second hand dump trucks and nice 12" chipper and try to get 1600 for two guys and 2000 for three. Nobody gets paid less than 25/hr. Some days you get more, some days less. I own everything I have, am on every job, and do all estimating/quoting. Brought in 250k in 2018, but about 60% was profit. (paying all taxes/comp/etc as I should with legit payroll) I feel like I'm doing pretty good, but after reading your 2cents I'm wondering why I'm only halfway to what a similar crew can easily obtain?

Well, maybe TMI, but I really am curious. Don't know how I could get away with charging more, lots of competition around here.


I've got a pretty mint "algorithm" for pricing out equipment that I got set up with in a class I took at school that was set up, literally, for running a single (or multiple) tree crew company. So, that's how I set up my rates.
Worth noting, I don't "pay" myself a salary or anything, so that 60% would be much lower if I were....
 

Arob28

New Member
Location
Chesco, Pa
Deevo,
Is this a 2-3 man crew with a tree mek with a 24" chipper and a mini? Or a 2-3 man crew with an f-350 and a 12 inch chipper just climbing (obviously)? There's a big productivity difference as well as overhead difference. I'm curious what type of 2-3 man crew set up can easily bring in 5-700k per year. I'm still a little rinky dink. We probably only get 1200 hours a year in production. Maybe less. If your crew is capable of working 1500 production hours, you're essentially getting paid 400/hr for your 2-3 man crew to bring in 600k. Seems like you'd probably be paying out for 1800-2000 hours to get those 1500 hours of real production.

If you are doing 2000 hours of real production then 300/hr on average to get to 600k. What caliber of persons are on these crews and what is their equipment? How much are they being paid? How much does the salesman/estimator get paid? What is your profit?


I run a 2-3 man crew with mini and second hand dump trucks and nice 12" chipper and try to get 1600 for two guys and 2000 for three. Nobody gets paid less than 25/hr. Some days you get more, some days less. I own everything I have, am on every job, and do all estimating/quoting. Brought in 250k in 2018, but about 60% was profit. (paying all taxes/comp/etc as I should with legit payroll) I feel like I'm doing pretty good, but after reading your 2cents I'm wondering why I'm only halfway to what a similar crew can easily obtain?

Well, maybe TMI, but I really am curious. Don't know how I could get away with charging more, lots of competition around here.


I've got a pretty mint "algorithm" for pricing out equipment that I got set up with in a class I took at school that was set up, literally, for running a single (or multiple) tree crew company. So, that's how I set up my rates.
Nice Post, Could You Expand on Your Algorithm for pricing?
 

djm

Active Member
Location
Seacoast NH
Depends on what you pat yourself and depreciation. All that aside. 10% profit is industry standard. Shoot for 20% ebitda to get return on your business.
 

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