How do y’all divide up your revenue?
For example 500 ticket once payment is collected tax paid and cogs, how do you dive up how much goes to capital reserve, overhead etc any advice?
I wouldn’t start by deciding what percentage goes into each bucket.
I’d start with your actual numbers.
For that $500 job, I’d want to know:
Once those are covered, you can see what gross profit is left to pay for overhead, owner pay, taxes, reserves, and profit.
The biggest mistake I made early on was looking at the money that hit the bank and mentally treating too much of it as available cash.
It wasn’t.
A lot of that money already had a job.
I’d also figure out your monthly overhead separately: software, insurance, vehicles, office/admin, marketing, phones, rent, bookkeeping, etc. Then divide that across the amount of work you realistically produce.
For reserves, I’d build them intentionally rather than just saving whatever happens to be left over. Vehicle repairs, equipment replacement, slow months, and payroll emergencies will happen eventually.
Once you know your true cost per job and monthly overhead, deciding how much can go toward profit or reserves gets a lot easier.
I’d be careful copying someone else’s percentages because a labor-heavy service business and a material-heavy trade can have completely different numbers.
Hi Bsonier,
A lot of people do percentages, and I think that's great. Another way is by doing a budget. At the beginning of the year, you should be doing a budget with all of these things you asked about included. That way you would know how much to allocate to each item. (or %) As you go through the year you can update your budget as well with how things are going.
I would have your planned budget in one column and then your actual numbers updated monthly in another column beside your planned budget.
If you are doing this, you're going to know exactly how your financial year is trending and what you need to save for what. No getting to the end of the year and waiting for the accountant to tell you how your year went.
I hope that's helpful. I've added some picture from our own budget so you can have an example.
Cheers.
When breaking down a $500 ticket, setting tax aside first and pulling out direct job costs makes it easy to split up the rest.
First, set aside roughly 15% ($75) straight into a dedicated tax account so it never gets mixed in with operating cash.
Next, pull out direct job costs (COGS), which usually runs around 20% ($100) for job-specific materials, chemical supplies, fuel, and direct field labor.
From there, split the remaining gross profit into three main buckets:
Overhead (35% / $175): Covers fixed monthly expenses like CRM software, commercial insurance, marketing, shop overhead, phone bills, and routine equipment upkeep.
Capital Reserves (10% to 15% / $50): Moves into a separate savings account strictly reserved for major equipment upgrades, engine/pump replacements, vehicle repairs, and building a cash cushion for the off-season.
Owner Profit / Draw (20% / $100): Net profit margin, owner pay, and retained earnings.
Setting up four separate bank sub-accounts for taxes, operations, capital reserves, and profit, then transferring those percentages weekly, keeps the cash flow automated and predictable.
I personally wouldn’t divide every individual $500 payment into a bunch of buckets based on arbitrary percentages unless you already know your actual numbers.
First, sales tax is never really “revenue” to me — that gets moved aside immediately because it belongs to the state.
After that, I’d look at the business as a whole and know your percentages for:
So if you collect $500, you need to know what your labor percentage normally runs, what percentage of revenue your overhead consumes, and what profit margin you’re targeting.
For example, if your direct labor is 40% and overhead averages 30%, you already know roughly 70% of that revenue is spoken for before owner profit, income taxes, or reserves.
I also wouldn’t confuse an income-tax reserve with sales tax. Sales tax gets separated immediately. Income taxes are something I’d fund based on projected taxable profit and guidance from your CPA.
For capital reserves, I prefer setting a business-level target rather than saying “X% of every job.” Decide how much cash you want the company to maintain — maybe several weeks of payroll/operating expenses plus money earmarked for equipment, vehicles, expansion, etc. — and then sweep excess cash toward that target consistently.
The biggest thing is: don’t copy somebody else’s percentages. A solo cleaner with almost no overhead should allocate revenue completely differently than a company with an office team, benefits, vehicles, software, management payroll, and commercial equipment.
Know your actual percentages first, then build your buckets around them.
Very helpful ty
