Forum

Replies

• 

  Richard Boyd September 30, 2010 at 1:03am

  Best to look @ the bottom line Andy, i.e how much of the 17K will be profit? It's easy to make £100K but it is also easy to spend £100K, so don't worry about gross but look at how much you really make.
• 

  Andy Thorne September 30, 2010 at 1:40am

  Richard,
  I think Andy means that's his gross drawings, after expenses but before tax....
  
  Richard Boyd said:

  Best to look @ the bottom line Andy, i.e how much of the 17K will be profit? It's easy to make £100K but it is also easy to spend £100K, so don't worry about gross but look at how much you really make.
• 

  Nick Donaghey @ Garden Gurus September 30, 2010 at 7:00am

  I think we need a bit more detail here. How much are you paying yourself? what net profit is that (early on in the life of a business I'd say any profit is good!)
• 

  alan mcmillan September 30, 2010 at 12:07pm

  
  
  I'm in the same boat as Rhonda, working part time and in my first season, with my start up costs taken off i should also be under the tax thresh hold come next April, but not by much.
  
  Rhonda Jack said:

  This is my first year and I work part time. I am not earning enough just now to pay tax and I am not in the red or the black per se.... I am literally balancing right on the line and have been for a couple of months. I do see this as positive though as its my first season. The prob I have is that I cant work any more hours and I cant charge anymore than I do.
  
  I am in the lucky(?) situation of moving house and starting from scratch in the new year so I will be putting thought into everything I have learnt this year and changing things for the good. My biggest thing to change is how I price!
• 

  Claire Brown September 30, 2010 at 1:52pm

  Also bear in mind the differences between being employed and self employed - the things you can claim for on your business. - Your vehicle is a business expense, your work clothes (uniform) are a business expense, a computer, a phone and tools are a business expense. If you take into account that you can work the hours you want, so you don't have to take time off for appointments, childcare blah blah blah, - it can actually mean that even with a smaller income you are better off. - I work about 4 days a week in term time and 2 days a week in holidays, but I am better off now than when I was earning a decent Garden Centre Manager's wage. (and i'm happier!)
• 

  Dan Frazer Gardening September 30, 2010 at 4:11pm

  I think a first-year business is always going to be a bit shakey, hence so many fold early on. Plan ahead, view everything as long term, perhaps aim to live on a little rather than a lot and just tick over. Bit by bit you can pick up better work, replace bad clients with good, chase the occasional new job that pays well. Gradually build things up to a decent income.
  
  Roughly speaking my first year net profit before tax (as the equivalent of a paid salary) is similar to my old salary as a graduate waste management consultant, so I already consider myself infinitely better off with a similar income yet a huge improvement in quality of work and, indeed, quality of life. My second year net profit will be higher due to contract work agreed.
  
  I'm happy with this. There is a temptation to go bigger, to take on more jobs, employ and expand. I will think about this over the winter. Sometimes while working away I feel so glad to be working alone with nobody to annoy me and I wonder if this would suffer upon hiring full-time. Indeed, if I get sick of hiring in the third year I will struggle to maintain the status quo and the business as a whole could suffer greatly. On the other hand, the only way to draw enough for a comfortable living for me and my family and to see me through my pensioner years is to at least double the net profit a sole-trader could make. I am not ready for that yet but it is the main aim in this thing called business.
  
  PS I found this website which makes things simple http://www.businessballs.com/finance.htm
• 

  Richard Boyd September 30, 2010 at 4:36pm

  THE GARDEN COMPANY said:

  spot on richard , top line is irelivant ! andy do not let figures by others make you feel you aint making enough 1 iv been there , i made a £45000 on year wow wow , came away with £14000 is that good , no it stinks , best to make 20,000 and profit £15000 ,
  

  
  Yup that's the only thing for me.
  
  We had a client last year turning over 4.5Mill PA and the profit margin was less then 65K, considering all the admin/staff...involved it's not a good margin, just a couple of wrong calls or an overdraft pulled and there goes the business with horrible repercussions.
• 

  Andrew Goss September 30, 2010 at 7:08pm

  On another thread someone said as a general rule you only net 40 - 50 % of your take ................... so that means to be earning the average national wage of circa £25 K pa you must be turning over £50 grand or so .
  I guess not many one man bands on here are achieving that !
• PRO

  Nick @ NM Garden Services Ltd September 30, 2010 at 7:31pm

  Absolutely right. I could purchase £100,000 worth of plants and sell them for £100,000. Then I would have £100,000 turnover and zero profit.
  
  It's profit what counts and it's all about working smarter and not necessarily harder.
• 

  James Miles September 30, 2010 at 9:59pm

  Your doing well, as long as your paying the bills and enjoying it. £25,000 profit in 10 months is a good target in an Ideal world.