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Old 01-30-2008, 12:40 PM
Peter Drougas's Avatar
Peter Drougas Peter Drougas is offline
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Join Date: Mar 2007
Location: New Hampshire
Posts: 32
Re: WHo knows there profit margin?
A addressed this question in another post today. I simply took my total business expenses as they were calculated in my taxes. Divided that by how many inspections I did for the year. This told me, on average, how much each inspection costs me. I was surprised to see that I was running about 30% cost per inspection. But remember that is every possible expense as reported in my taxes.
From there I can easily calculate how much I make with each inspection. What was more difficult was guessing a per hour rate, but when you're self-employed, who cares. The money is all yours anyway. You have to make the personal choice as to whether or not you are spending to much time "at work".
As for the details in spending. Just as with any budget, there are expenses you have no choice in. Such as vehicle, office, equipment and business fees (insurance, licensing, whatever). So I am not so sure you need absolute details for things you have to spend money on, versus the total cost of doing business.
Marketing of course is another thing. But in my case the 30% includes that. And it cover several phone books, flyers, the silly pens with my name, etc.
In general it is no different from any other budgeting you have to do. The hard part is not knowing how much you're going to make next week!
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