Gross Profit for.....

Gross Profit for.....

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Hi

Just signed up a sole trader that runs a signage business this morning - looks like a good business and the client seems to be good at what he does, but will require help with managing and maintaing paperwork, etc.

Just wondering what sort of gross profit to expect on this type of trade.

Regards

a_m

Replies (5)

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By DMGbus
01st Sep 2011 13:54

I've just looked at a signwriter's accounts

Materials are working out at about 19% to 20% of sales, so if no employees are used, so a GP of 80% to 81% is being achieved.

 

 

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Replying to maacprime:
By a_m
01st Sep 2011 14:43

Thanks

Many thanks - from time to time he uses a fitter and pays him £40 per job and when electrics are involved he uses an electrician. The fitter is casual labour and the electrician is a separate company who he is invoiced by. Therefore, would the electricain be a cost of sale, i.e. reduce the gross profit and would the casual labour be an employee cost reducing the net profit??

Once again many thanks.

a_m

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By DMGbus
01st Sep 2011 15:19

Fitter = COS

A self-employed fitter would be a direct cost (but not "wages" if self-employed).

On the SA103 included in "Other Direct Costs" in my view.

PS. Do NOT put as "Sub Contract Costs" on SA103 as sign fitting is NOT within the CIS.

Thanks (1)
PJ
By paulgrca.net
02nd Sep 2011 12:48

Making Signs

Sign manufacturing (not a signwriter) 60% GP previous owner who we acted for showed closer to 70% GP.

 

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Replying to elansea:
By a_m
02nd Sep 2011 13:18

Thanks

My client supplies various types of signs and graphics and therefore purchases a lot of different types of materials and so the GP probably will be 60% to 70%.

However, the problem is - he hasnt been very good with paperwork and admittedly he has forgot to do sales invoices for cash jobs, etc.

I have trained him for going forward, but need to prepare accounts for 2010-11 tax year!!

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