We discussed this portion of being a business owner back when you started. You really need to understand the financial side of running a business. You dont need fancy software right now, but access to Excel will make your life better. or I think there might be a free google knock off of it. You have got to understand how sales tax works and most likely hire a bookkeeper if for nothing else than to file your quarterly sales taxes with the state. Unless you can teach yourself how to calculate it and do it.Bare bones minimum.
I’m looking for the quickest way to build a customer base that also works well with my schedule and what equipment I have. Mosquito applications would be the way to go. It’s something I can just show up and do and then leave. No appointments and I don’t have to go into their house. The minimum price I will charge will be $40. It goes up in increments there, based on how many gallons I use, but that’s the base. I need about $3000 a month to live. That’s bare minimum. My first goal is to get to the point I’m 100% self sufficient.
The question (for business owners):
Based on my bare minimum price, how many customers would I need to pay myself and still support the business and pay proper taxes? I’m looking for a realistic short term goal here. I don’t need exact math, just something to aim for.
My current guess is about 120-130 regular monthly customers. That would support me through the active months (8 months out of the year).
There isnt a single answer to that question. Usually in your position you would continue living off the salary of your "job" and reinvest every dollar you make in the business back into the business to grow the revenue and customer base.I guess my question is this:
At least until I get a larger base and I’m not beholden to a full time job, is it feasible to basically pay the business the bare minimum (taxes, supplies, daily maintenance costs) and pay myself the rest so I can be independent or should I follow the 30/30/30 rule?
Like Sanrith said you’re the only person that can answer that. Taxes, operating cost, etc all need factored in here. $3000/$40 to get a bare minimum jobs needed count isn’t going to answer it.Bare bones minimum.
I’m looking for the quickest way to build a customer base that also works well with my schedule and what equipment I have. Mosquito applications would be the way to go. It’s something I can just show up and do and then leave. No appointments and I don’t have to go into their house. The minimum price I will charge will be $40. It goes up in increments there, based on how many gallons I use, but that’s the base. I need about $3000 a month to live. That’s bare minimum. My first goal is to get to the point I’m 100% self sufficient.
The question (for business owners):
Based on my bare minimum price, how many customers would I need to pay myself and still support the business and pay proper taxes? I’m looking for a realistic short term goal here. I don’t need exact math, just something to aim for.
My current guess is about 120-130 regular monthly customers. That would support me through the active months (8 months out of the year).
Ok, I lack the ability to do this without getting into the weeds so buckle up.Ok, I’ll get some operating costs together tonight for more detail.
I ended up not switching employers, so I’m still with the lower paying guy. Mainly because the employer that fired me last August wanted my full CA license. I would also be gone a month every quarter and there is no way I get my business going with those two things.
I like the guy I work directly for at this current place (known him for awhile), but I don’t really like the owner (I have known of him, but didn’t meet him until I started here last Sept.)
General advice. I don't know your industry.Bare bones minimum.
I’m looking for the quickest way to build a customer base that also works well with my schedule and what equipment I have. Mosquito applications would be the way to go. It’s something I can just show up and do and then leave. No appointments and I don’t have to go into their house. The minimum price I will charge will be $40. It goes up in increments there, based on how many gallons I use, but that’s the base. I need about $3000 a month to live. That’s bare minimum. My first goal is to get to the point I’m 100% self sufficient.
The question (for business owners):
Based on my bare minimum price, how many customers would I need to pay myself and still support the business and pay proper taxes? I’m looking for a realistic short term goal here. I don’t need exact math, just something to aim for.
My current guess is about 120-130 regular monthly customers. That would support me through the active months (8 months out of the year).
For whatever it's worth, I can barely imagine getting someone to drive to my house to do something for $40 in today's world. You know your business, but I wouldn't bat an eye at multiples of that amount. Also for some possibly worthless market research, I don't think it's ever occurred to me to pay someone to spray for mosquitoes. Any time I've ever had issues, it's been ants. The last guy I was using retired, so I've been spraying around the exterior perimeter once a year or so myself. It takes more time to dig the sprayer out of the shed than anything else. I'd be happy to pay someone to come by and do the same every 6 months just so I wouldn't have to fuck with it, and I probably wouldn't really even care how much it was.The minimum price I will charge will be $40.
I really hope you succeed. You are being offered advice from people in this thread who seem to know what they are talking about. The best thing you can do is listen to them. You are willing to spend $12 in chemicals to grab a $40 revenue. This doesn't include any other of the various costs. I think you are missing the fact that it doesnt matter if a company has no employees or 1,000 employees that understanding your costs and using them to properly price your product/services is critical.My current goal is to focus on a zip code just north of me. There is money there and mostly smaller or moderate sized lawns.
The $40 is to quickly gain a base. Off of the top of my head, a gallon of solution costs me about $3. Most yards will use 2 gallons max. I am willing to treat up to 4 gallons for the $40. I know I won’t be getting rich off of this. My current goal is to get rid of the full time job and to be self sufficient.
I know a lot are rooting for a large business with employees, but I need to walk before I run. I don’t want to get ahead of myself and stress myself out over things I shouldn’t even be thinking about right now (maybe I should be thinking about it).
I’m tired of working for others. The last few weeks have just solidified that.
My current goal is to focus on a zip code just north of me. There is money there and mostly smaller or moderate sized lawns.
The $40 is to quickly gain a base. Off of the top of my head, a gallon of solution costs me about $3. Most yards will use 2 gallons max. I am willing to treat up to 4 gallons for the $40. I know I won’t be getting rich off of this. My current goal is to get rid of the full time job and to be self sufficient.
I know a lot are rooting for a large business with employees, but I need to walk before I run. I don’t want to get ahead of myself and stress myself out over things I shouldn’t even be thinking about right now (maybe I should be thinking about it).
I’m tired of working for others. The last few weeks have just solidified that.
neo-serfdom 101Ok, I lack the ability to do this without getting into the weeds so buckle up.
First, you need to set up a chart of accounts. Excel is totally fine for this. If you cant afford/dont have access to MS Office then try to use Google Sheets (part of the free Google Office clone). The chart of accounts is a part of your General Ledger to track ALL of your expenses and put them into categories. Example: This is part of one. The first number is the account number and the second is the description).
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Second. You need to define your expenses in terms of what is a part of COGS (the cost of goods sold) and what is not. COGS is what you actually have to buy to create deliver your product/service. An example would be chemicals. This is a DIRECT cost. Ie.. it directly is a part of the good/service. Everything else is a non-direct cost. If you have no customers on Friday you still have to pay indirect costs. Such as Rent, Utilities, Advertising etc.
So, now you can write down and calculate exactly what a customer costs you. Then and only then can you know what you should charge the customer. A very basic example:
if a 1-hour spraying jobs costs you...
Chemicals - $3
Fuel - $5 (1 gallon)
Direct labor - $15 an hour for 1 hour
FICA/SUTA/FUTA etc (payroll taxes) - $1.5 for an hour of labor
Your basic COGS is $22.5
If you charge $45 to the customer your net profit is $22.50 (or 50%) ($45 - $22.5 = $22.5). BUT...
You have lots of indirect expenses.
Truck payment - $350/month
Truck insurance - 250/month
Liability insurance - $150/month
Cellphone - $75/month
Licenses - $25/month
Advertising - $100/month
Postage - $25/month
Bank and credit card fees. - $250/month
Blah, blah, blah. The list is long.
For this example lets say the above is bare bones and you are using something like Chase small business account to take credit cards. You run it out of your house so no rent etc. The above indirect expenses work out to $1225/month. So lets do some math.
You make $22.5 net profit per job.
Your indirect expenses are $1225/month
Therefore you need to complete 55 jobs a month to pay your monthly indirect expenses and to break even. 55 jobs a month divided by 20 work days a month (M-F 4 weeks a month) = 2.75 jobs a day. Every job you complete above the 55 jobs in a month is $22.50 profit in your pocket. Every job less than 55 in a month means you are paying $22.50 out of your own wallet.
The above is a very basic roadmap for you to proceed. Write your own chart of accounts, calculate and plug in your "actual" costs for every type of service you offer and then do the same for your indirect costs and viola you have a very basic business model.
ps.. before you spend all that profit you need to remember you will be paying income taxes on that profit. Which is why a necessary indirect cost is paying n accountant to do your taxes each year unless you are comfortable doing it yourself. Oh, and yeah understand how collecting and paying sales tax works.
Good luck and God speed.