Oh, from a purely business valuation, then definitely the 500k one. If the last 5 years have taught me nothing, it’s that you can be a huge business (or government) and be buried under millions or trillions of dollars in unfunded liability, and still be considered A Good Business.
Now, if I can just get the same sweetness that freddy/fannie got (you keep the profits and the loses are covered by government)…
Until it’s completely closed up and made illegal, it’s fair game. The trick to staying clean with the IRS is to avoid “red flags” (duh). Business owners with gross incomes into the single-digit millions are the ones that are on the radar. As window cleaners, we don’t get anywhere near that, but as far taking out money in the form of a distribution, I’ve always seen that a 60/40 split between personal salary and distributions is what is considered fair and conservative. Anything higher than that (in the form of a distribution) can get you flagged for an audit.
That’s fine from a tax standpoint. The legality of it is beside the point. From a purely numbers standpoint, people can be misled about the health of their business doing that way.
An owner needs to combine salary with disbursements, subtract that figure plus expenses from gross profit, and then you see the real net profit of the business.
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Ah, I see what you were getting at now… I agree, “juking the stats/numbers” like that is far too easy to mislead others about one’s success.
WDW…was this straight window cleaning to hit these numbers above or did you offer additional services? What part of the country are you located…meaning winters?..Thanks!
I will Respond in a minute
Last year Commercial up to level two and routes $67,000.00. Power washing ( mostly res ) $28,000.00. Residential Windows $39,000.00. Gutter Clean-out $2,000.00. One guy part time year round does all Commercial work and averages about 23 hours week. Power wash guy works part time too works in- season so April - Nov. Part time. I do all the residential windows working three days a week April - Dec. With minimal work in August.
I have reduced the amount of work do and my hours over the last few years. Don’t want to work long hours anymore. Don’t have to…have other business interest. And I am in Ohio.
real estate, a band, other . . . ?
Hi Bruce. I like your sense of humor : A Band ! Yea that would be pretty cool but at 52 ( 53 This Sunday) starting that profession might me a little challenging, although for some strange reason all morning I cant get the AC/DC song " Hells Bells " out of my head ( over and over ). Great song but enough is enough !!
No, seriously I have residential real estate that I rent out. Buy and fix up mostly somewhat distressed property. Also after 21 years wanting to phase me out of the window cleaning business. Maybe sell. I have an employee that has expressed some interest. I also sell and install flagpoles ( separate business ).
Jeff
What are your tips for getting only high-end residential?
