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1
Posted on 12/17/18 at 10:08 pm to Papasteve
I’m unclear on what you are seeking advice one
Posted on 12/18/18 at 7:28 am to tigerfoot
Take the business over and get things organized to possibly expand or keep things the same and collect your 2 thousand a month.
Posted on 12/18/18 at 11:30 am to anc
Just to get our terms right...
1.2 million sales
950K Cost of sales and operating expenses
350K Owner and family payroll
So really, assuming those family members don't do anything... they have a cash flow available to owner of 250K and are spending 350K.
Look... putting family members on the payroll is a long, time-honored tradition of estate planning, one I often reccommend. Even if those family members have a minimal level of work. As long as all the owners are ok with it... and some work is occuring... whatever. Nothing wrong with this, legally or ethically.
But if they are cash-flow negative 100K a year... where is that money coming from? Savings? Borrowing?
Unless there is a huge pot of savings somewhere, this isn't sustainable.
1.2 million sales
950K Cost of sales and operating expenses
350K Owner and family payroll
So really, assuming those family members don't do anything... they have a cash flow available to owner of 250K and are spending 350K.
Look... putting family members on the payroll is a long, time-honored tradition of estate planning, one I often reccommend. Even if those family members have a minimal level of work. As long as all the owners are ok with it... and some work is occuring... whatever. Nothing wrong with this, legally or ethically.
But if they are cash-flow negative 100K a year... where is that money coming from? Savings? Borrowing?
Unless there is a huge pot of savings somewhere, this isn't sustainable.
Posted on 12/19/18 at 2:59 pm to LSUFanHouston
Anybody else curious as to what type of business has these margins?
Posted on 12/19/18 at 4:16 pm to Moustache
quote:
Anybody else curious as to what type of business has these margins?
hookers and blow
Posted on 12/19/18 at 7:08 pm to Moustache
I have been told that the best businesses make 20% return. So if you’re making a 20% return you’re doing really well.
Posted on 12/20/18 at 6:14 am to Papasteve
quote:
She's married, 5 kids, Husband doesn't work,
Posted on 12/20/18 at 6:41 pm to yellowfin
quote:
That’s one hell of a margin
That has to be a “before labor is paid,” profit. There’s no way in hell the business makes $750k profit with that payroll.
ETA: I think net profit may be confused with margin in that case.
This post was edited on 12/20/18 at 6:47 pm
Posted on 12/20/18 at 6:45 pm to Moustache
quote:
Anybody else curious as to what type of business has these margins?
We try to maintain a 45% margin before payroll is factored in. It generally leaves us at 15-18% net profit at the end of the year. We’re starting to sell more labor only on some projects so it will be interesting to see how that ends up affecting profit. The numbers I’ve run show that net profit on those projects should be well over 20%.
This post was edited on 12/21/18 at 6:33 am
Posted on 12/22/18 at 10:34 pm to Papasteve
quote:
Ive balanced their account on QuickBooks, made all invoices and payroll ready. Hired a graphic designer to create new branding and submittal packages and currently a website in development.
Sounds like you should be pulling a salary too.
Posted on 12/23/18 at 8:13 pm to Jcorye1
He’s getting 25k a year, so he is
Posted on 12/23/18 at 9:11 pm to eng08
It sounds like everyone is unhappy working there.
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