Frustration


#1

After putting in over 200 hours in April, just did some end of the month book keeping and found out my net, after tax and expenses hourly wage is just at $30. This is defeating. I have one employee full time and we did $14k in April. Payroll was $3100 for the month. Expenses are about $1600/mo for overhead including - Marketing, Gas, Job Supplies, Software/Office, Meals & Entertainment, etc.

Anyone else in this boat? I try to bill out jobs between $75-$100/hr. I’m thinking damn that’s good money but after all the bills are paid, taxes and payroll - I’m left with what seems like a chicken and duck.

Anyone else feel defeated after a month like this? April-June should be my most “profitable” months.

What am I doing wrong? Any advice/suggestions?


#2

Your hourly wage could be a bit less if you also deduct 5% for dividends to the business owner. What do you consider to be a reasonable wage for your labor hours as the business manager while working on the non-billable hours/tasks such as AR, AP, payroll, ordering supplies, equipment and vehicle maintenance, marketing, scheduling, reports, etc.? I roughly value my business hours at about 5% of the monthly gross.

For me I think it is a lot easier to set values to my billable hours when I am on the job site. I usually value my labor onsite at 40% of the gross of the job. I realize this is higher than the industry standard of around30% for labor but I do better work than a standard employee and actively seek referrals, repeats and upsells.


#3

Are you an LLC, or Corporation? If you are a sole prop, net, net, net is about 33%. Welcome to self employment and the beloved self employment penalty tax. The good news is, at sole prop, all those expenses come off your personal annual gross. Ain’t it great being self employed. :thinking:


#4

Find ways to cut expenses.
Expenses are about $1600/mo for overhead including -

  • Marketing…Evaluate and adjust
  • Gas…Prices are going up, match it
  • Job Supplies…This should be fairly low, most supplies last a while so be sure of no waste
  • Software/Office…Evaluate and adjust, or charge more
  • Meals & Entertainment…Pack your lunch and tell your employee to as well.
    (Meals & Entertainment is only if you are actively pursuing a client or a “business lunch” with employees)
  • etc…This is where money tends to get lost - everything gets a purpose and a return value

#5

Everything sounds good , but meals. I’m not living like a pouper to make my profits sound better. The heck with that !! raise your prices !

Would like to know what he means by entertainment ?


#6

We are in the same boat with making 15,000 a month an paying out a lot for tools, hotels, contractors, employees. lol


#7

There is really only 3 things you can do.

  1. Increase Prices
  2. Cut Costs
  3. Become More Efficient

There isn’t a magic bullet you kinda have to do a combination of these 3 things. If I had to guess #1 is your biggest culprit.


#8

Im assuming this is just your hours and not your employees included?

Thats about 9.5 hours per day over 21 working days.


21 Working days in April

14k divided by 21 working days = $667 bucks per day collected.


What area are you in?


#9

Was that 200 hours spent mostly in the field or office? If you and your employee, for example, spent a combined total of 300 hours in the field…
$14,000 / 300 = $46.66/hour gross