Like some people mentioned. Read profit first. Awesome book. Great game plan to follow
I know itās been said already, but for those of you that are hesitating or thinking, āoh yeah, cool, Iāll do thatā but didnāt already buy the book and begin reading: GET PROFIT FIRST. NOW.
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Right now.
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Ok, why didnāt you get Profit First yet??
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Stop reading this thread and get Profit First!
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Seriously, just DO IT!
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Pay yourself as little as possible at first. You could always give yourself a raise if need bee. I think in the beginning I was making/paying myself 2000 a month.
I donāt think anyone starting out can grasp exactly what your expensive are going to be. So hence as little as possible to start
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You donāt want my copyā¦ itās worn and full of hand written notes all over it. Plus it is opened up and used atleast once a week or two.
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It really is hard to grasp especially when you are used to working for someone else and everything is already taken from your paycheck. (Taxes and such)
One easier way to figure out your starting point? How much were you bringing home before? Was there excess in how much you brought home? Did you have 50-100-150 bucks a week extra that you may have spent on other things you didnāt have to?
Whatever it is you HAVE to have a week, figure that out. So lets use 500 bring home as a round number. In most cases, you are paying 25%in taxes. So your gross pay would have been about $670. When you are self employed figure about 33%. so if you figure about 40% of whatever you gross, to hold back for taxes, you should be ok there. If your business is a SP or a certain type of LLC, whatever profits your business makes, you will pay taxes on it too.
If it were me, I would keep your business money and your pay completely separate. Donāt pay your personal bills with your business account. Pay yourself into a separate account, and have a savings account that you dump the money for your wages into every time you pay yourself.
You would get some good advice from a CPA, so I honestly would suggest starting there.
I also would not want to exceed 50% of gross sales, to exceed labor expenses, be it just you, or if you have employees. But that is just my opinion.
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Wow, great advice! I will be registered as a sole proprietor with no employees. I would have to start out part time and hopefully work into full time.
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One thing that really helped my wife and I was to sit down and figure up all our expenses for the year. Then we divided my income into the separate categories I posted above.
Itās easier once youāve done this for a while and have somewhat of a general idea of income you generate. In the beginning youāre basically putting as much back into the business to build the infrastructure while still having enough for bills. It also helps to determine what you should be bringing home hourly.
It seems like the first step is to sit down and run the numbers on your expenses. Do you know exactly how much money you spend in a year?
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Well with my day job I usually bring home about 24k a year. I usually have a couple hundred after bills to sustain us until the next payday. Depends on which check our mortgage falls on.
So it basically costs you 19,200 per year for your bills. That leaves 4,800 per year. Sound about right?
Youād have to do 200 houses a year at 120 per house to break even with your current setup.
Say it takes 2 hours per house and 1 hour drive time/set up/tear down gear. Thats 360 hours a year to break even with your current setup if every 120 house takes two hours.
Divide that by your basic 40hr week. Itāll take 9 weeks to meet that goal. Thatās 45 days with 3-4 houses a day.
Sounds simple right? Lol
The kicker is you gotta be able to crank out jobs and move to the next. Get paid And handle back end paper work. And land all these jobs. This is where most new guys get the hang up. IMO
Window cleaning as business from the outside looks easier that the actual, day in day out grind, of making a decent living cleaning windows.
You gotta be good at what you do, have good communication skills, be honest and fair, and know your pricing all while being able to sell jobs, do book work, and stand out from the crowd. Itās actually quite a balancing act window cleaners have to do.
I canāt tell you how many new guys Iāve seen come and go but the ones that have they staying power seem to be able to do all these key things right.
I wish you luck in your endevor and am here if you need. But most of all you gotta stick to it like glue if this is the chosen path for you.
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Following profits firstā¦ remember profit first isnāt set in stone just suggestions my target allocations get tweaked quarterly, more in the beginning.
17% owner
13% profit
16% tax
36% labor
18% operations
Starting out, pay yourself for every position.
20% as the owner (owner)
15% as a tech (labor)
18% as a lead tech (labor)
$13/hr as an office staff (operations)
$17/hr as office manager (operations)
% as a salesman (operations)
Etc, etc
This will make it much easier to plug in an employee for what ever position you plan to hire for.
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Iād be happy paying myself $14-$15 an hour
Great book. Iāve spent the last two years living off about $1100/month and hoarding money in the business account because I didnāt know what to do until I read that book.
Now Iām using Housecall pro and quickbooks which makes it easier to figure out my actual P&L, taxes, etc.
@Squeegee_Dave a good CPA is worth their weight in gold as well.
And a poor one is a liability.
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Solid post!!
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Agreed. No ones job is safe. If youāre using a $100/month CPA/bookkeeper heās probably perfect until you hit 6 figures, then itās probably time to start looking for second opinions and CPAs who work with million dollar businesses unless your CPA is growing with you.
If not, keep looking for better, but Iām 100% positive that a CPA is better than no CPA. Evaluate your team annually and clean house if called for.
Iām in that situation now where my CPA says that leasing another truck might be a better option than buying. Everyone and their mom on the PWRA forum lost their mind over it. When things slow down in November Iāll meet with 2 or 3 to get second opinions on all of it up to this point. Iāll make a careful decision after that.
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