Starting a new small business, what is the average turnover for the first year?

[steve sps]

Hi,

I have just passed the C&G 6129 course and want to start a new plumbing business, there are two of us hoping to go into business together as we were on the same course. I was wondering what the average first year turnover is likely to be, does anyone have any idea?

Regards,

Steve

 

[mrlennie]

It totally depends dude. The 6129 taught you very little if any in the way houses are made which is what you gonna spend your time in and under. How much actual on the job experience have you got? I know it doesn't sound on topic but it is as this directly relates to how many jobs you will do and how your reputation will grow - for better or worse.

 

[steve sps]

It totally depends dude. The 6129 taught you very little if any in the way houses are made which is what you gonna spend your time in and under. How much actual on the job experience have you got? I know it doesn't sound on topic but it is as this directly relates to how many jobs you will do and how your reputation will grow - for better or worse.

Hi mrlennie,

Thanks for getting back to me, I have been involved in construction on and off over the past twenty years, I did my C&G in Bricklaying 12 years ago but I have done all sorts. On the plumbing side I have just done basic maintenance in bathrooms and kitchens, also fitted a few bathrooms as we used to have a holiday letting business in France.

My main reason for asking for an idea of turnover in the first year is because I have an appointment at the bank this week, I honestly have no idea what to expect in the way of income/ turnover but I know they will ask me.

Thanks again,

Steve

 

[mrlennie]

Then you have a good foundation I'll stop yapping then lol.

First year turnover say you get 5 bathrooms 3 kitchens 10 odd jobs and 1 central heating. 5 bathrooms at 500 each = 2500 3 kitchens = 1500 10 odd jobs say 2000 1 central heating 2000

2500
1500
2000
2000
=
£8000

Adjust figures accordingly say you think you'll get 10 bathrooms and 5 central heating adjust but what I put down is what I'd expect you to get if you have a few contacts but not loads.

 

[steve sps]

Hi,

Thanks for that, it's given me a better idea.

Steve

 

[dontknowitall]

I've been going for three years. Never yet done a full central heating system. Major parts and renewals but not a full blown system. Done one complete bathroom (including painting, etc,). Done one kitchen (a couple of weeks ago as it happens.)

I can begin to count how many outside taps, radiators, leaking taps and jobs like that I've done. My first six months I walked into job after job but the recession was in the news and suddenly the work stopped and I was into one job every two weeks. A tap. Then a WC to be fixed. Then another tap. This went on for around two months and I must have earned around £35 profit/wage during that time.

My second year was better and until my accountant re-arranged the figures I reckon I earned about £2,000. I'm having a much better year now but still earning a low wage instead of a reasonable salary.

I feel I'm doing well, especially as I only have a website and a vehicle wrapped designer van. Most plumbing (around my parts) is maintenance and not new stuff - generally people are still keeping their wallets closed for things like new bathrooms and kitchens.

 

[PlumbBobBob]

i know what you mean dkia i've been going not quite as long as you. it's strange you are quiet for a couple of weeks then inundated with jobs, it's like they save them up for you. i've had a few bathrooms numerous radiators countless taps and other things.

 

[tamz]

I take it from your bank appointment you will be looking for overdraft facilities to cover you. The bank manager (do banks still have managers?) will already know what you can realistically turnover as i'm sure there will be other similar businesses with them.
Be realistic. Your first year you will struggle to break 10K. Remember turnover is NOT profit.
You have little real experience, probably very few contacts and a LOT of competition. Initial costs can be quite high, vans, tools, insurances etc. Don't be naive enough to think you will make a lot of money. Most jobbing work is cut throat stuff with prices less than they were 15 years ago. It is a long hard road.

When i started out on my own in 93 i went to my bank to open a business account to be told i needed an appointment with the manager, who i knew as he lived local. About the first thing he said was do you have a business plan? Me, business plan???.........make the most money with the least effort.....I don't want anything off you except an account and a cheque book. Give me a bank account or i'll open one across the road!
He just laughed and said i had as good a business plan as he had heard

 

[Dannypipe]

When I opened my business account, I said no to an over draft. which in many ways is a good idea. I have a credit account with the plumbers merchants, so why would I want to borrow money or go over drawn.

I've been skint, but never gone over drawn.

Turn over is so variable its impossible to give an answer to that. With two of you on the tools I'd say at least £30K or you're not going to have enough profit for you to make even minimum wage.

 

[tamz]

Some pointers to a successful interview at the bank

Sports Socks Salesman - Video

 

[Flanners]

I am starting a business in heating, plumbing and renewables in April and I aim to make 10x these figures. I make more than 10k a year doing private work!

I would look at what your doing wrong!

The figures you guys are throwing around if I were you I would say that this industry is not for you.

Maybe get a paper round!

 

[tamz]

Flanners
Remember your 10k a year of homers will not be homers anymore. They will be part of your total earnings. You may find the people who use you now will think as you are self employed you will be more expensive and go elsewhere. Believe me it happens.
You are setting a big startup target which is achievable, but not easily, as you will learn.
You would need to have around 100 installs/year to achieve a 100k profit these days. Good Luck.

 

[ecowarm]

You can soon run out of familly and freinds to do work for full time!

 

[steve sps]

Hi Guys,

Thanks for the info and advice!

Steve

 

[Dannypipe]

Bitchy!

 

[dontknowitall]

I am starting a business in heating, plumbing and renewables in April and I aim to make 10x these figures. I make more than 10k a year doing private work!

I would look at what your doing wrong!

The figures you guys are throwing around if I were you I would say that this industry is not for you.

Maybe get a paper round!

If that's aimed at me, I'm happy with my lot and am making much more money now than I have for the last 15 years or so. And I'm happy with my work and enjoying it.

I'm lucky I don't have to earn loads of dosh to stay afloat and I'm lucky with my customers in so far as most of them are happy to wait for a day or two to have their work done. They know I won't cost them the earth and they know I'll be thorough.

There's more to life than flogging your guts out to earn some greenies. Money for my family is much less important than quality of life. We go without lots of things but we are contented and are lucky enough to enjoy time together.

 

[Flanners]

I wasnt aiming anything at anyone. The question was turnover and I was just shocked at the response. Either people dont understand what turnover is or they just charge for labour and get involved in supplying???

Im sorry if I offended anyone, and understand that it may have. Everyones circumstances are different!

 

[dontknowitall]

Im sorry if I offended anyone, and understand that it may have ....

I think we've all been there at some stage!! Apology wasn't needed but definitely accepted!!!

 

[Toddyplumb]

Turnover is only for show ! Profit is King ! And cashflow is essential !