What % are your profits?

[Scotty Stevens]

Hi all,

I have a new business, going well, and, keen to expand, I realise that the more I outsource in the name of expansion, the smaller percentage of profits I get to keep.

On the other hand, I also realise, that although the percentage is lower, it is calculated on a higher turnover ultimately, and thus, amounts to more money in my company coffers.

Currently, I'm operating at about 40% profits (gross). Overheads are minimal, and the main expense is sales commissions to my agents. But it's not happening quick enough, and I need/want to outsource to keep it growing quicker.

My question is, what is the MINIMUM % gross profits one should aim for in business?

Also, in the name of interesting discussion, what % are YOUR profits?

To freedom,

Scotty

[Ruman]

59% gross profit(gross sales - COGS). 35% net profit compared to gross sales. If I remove the purchase of a truck and trailer out of my expenses, i am at a 48% net profit.

This is a business cleaning out bank repossessed homes & doing lawncare on them.

The bigger concern, would be what % of business owners DO NOT KNOW!

In my opinion, there is no way to speak about a minimum % you should go for. It would be EXTREMELY industry specific. Example, my cleaning of homes is probably 50-60% net profit while my lawncare is only 30%. The lawncare is less time invested for me, though. I subcontract out everything.

[The Stealthy One]

Scotty, different industries and sectors have different expected margins. There's no "correct" profit margin to have. What industry are you operating in? I can tell you that 40% is not too shabby, and is likely much better than most members here at YoungEntrepreneur.com. I would have to say you're probably doing pretty well.