In our first Groundwater Professionals Survey, we asked participants to put pencil to paper to estimate their 2019 profit margin. What did they bank, measured as per cent, calculated as profit before income tax divided by total revenue. For example, $5,000 of profit on $100,000 of revenue = 5% profit margin.
Here’s what they said.
Encouragingly, 22% of you estimated 2019 profits at 11-15%. 18% of you made three to 5% in profits. 16% of you pulled in a healthy 20%-plus in profits. About 14% were in the 6 to 10% bracket.
On the down side, 6% reported bringing in one to 2% profit, operating at a loss or being unsure about profits.
Quite a few of you (sixty-four%) found your profits fell in a similar range to the two previous years. For six% profits were slightly higher. For 14% they were slightly lower.
What profit should you be making? More than half of you thought a fair profit range for an established, productive contractor was 16-20%. 22% felt 11-15% was fair. All agreed less than 3% was not a fair margin for work done. A small group (5%) aspired to 30-40% profits.
But fair and acceptable are two different things. To gauge satisfaction, we asked, “Are you able to make the profit you wish to make and pay your employees enough?” 76% of you answered, “Yes.”
A slight majority (55%) said pay rate and benefits are an obstacle to keeping employees. “In an oilfield-based economy everyone with a pulse thinks they deserve $40/hr,” one respondent commented. “We tend not to hire people with a lot of oilfield experience on their resumé.”
The Groundwater Professionals Survey was co-sponsored with the Canadian National Ground Water Association and the Ontario Ground Water Association.
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