View Full Version : How much profit?
03-06-2001, 04:40 PM
Take all costs into account, and you have your price, less the profit... so how much profit do you charge? In percentage of all total costs? How does it vary from different types of work? I am talking about residentials, by the way... say i spend $3 on gas on a lawn, including bagging with a blower engine, and also counting trimming mowers and all that... or if i set a price that would be an average for it, since it'd be too difficult to measure out the gas and all.. and how much percent of all that should i recieve for profit? it's going to be a 1 man operation, pretty small, but in a community not too big and modest homes. Just trying to get ideas... thanks,
Eric charge as much as the customer will pay, and give them the best service possible. For you I would decide on what I want to earn per hour, estimate how long the job will take,then add your expenses and little extra margin for incidentals (such as equipment damage etc.)
It would be hard to give you how much profit we charge as each job is unique. We are stictly a winter operation so we need to ensure a large profit margin. I would definately not run under 40% profit.
03-07-2001, 12:00 AM
Your fuel cost should be alot lower than that per lawn, depending on size of course. I know my minimum I want per each hour. I take into consideration the amount of time the job will take, location, trimming, and obstacles to decide on my price. I know what my TRUE competitions price would be, mainly because mine is usually very close (not lowball price either).
03-07-2001, 01:51 PM
figure out how much you have to pay for gas, insurance, and the equipment for the job then how much profit..
example you pay
$3 in gas
$5 for insurance every yard
$10 for equipment
the total is $18 just for your costs
if the yard takes you 25 minutes how much do you want to put in your pocket???
(these figures are just a example but you have to figure out what your over head is)
03-07-2001, 02:09 PM
You may be a one man operation today, but what about tommorow? Assume you will grow and add employees. Set price with this in mind. For my company that is $12.00/hr with insurance and tax. Looking at it from this angle will put a system in place for profitable future growth.
03-07-2001, 03:33 PM
Thanks guys, that helped.. still, how much per hour is good? As i said, these definetly aren't upper class homes where i want to start. And you brought another question to mind: how do i do the insurance thing? how does that work for a bizness?
03-08-2001, 09:48 AM
bush hog, i try to make about a dollar a minute because of the over head i have, i have $30,000 in equipment and the price of insurence , gas, pay my people, and taxes i have to make close to that to make any knid of money.
03-08-2001, 07:15 PM
last year my insurance was around $400 for the year, granted i only has about 40 properties. talk to someone who deals with insurance and they could give you a price. i shouldn't cost you more than $200 or so (i think)make the call, you wouldn't want to put a rock through a window and have to pay out of your pocket
03-09-2001, 10:45 PM
The rule of thumb I try to stick to is: $35.00 an hour without equipment (hand pruning, labor, odd jobs that require NO gas powered equipment). $45.00 an hour if I use gas powered equipment. Sooo if I look at a property that I believe will take an hour I'll price it at $45.00. As we all know the more you do the lawn the more proficient we are and that is where I can save 15 minutes here and there. Just because you do it faster doesn't mean you are skimping on quality. You're just more familure with the turns etc... So again when I bid I use the time I think it will take me on the first cut and price it accordingly.
03-14-2001, 11:57 AM
We have have a 2 man crew, and we try to get around 75 dollars an hour for mowinig. That included edging, weedeating, and blowing. Mulch, Leaves and Shrubs are extras and we gauge them on a job by job basis.
03-14-2001, 06:04 PM
Everyones profit or charges will vary depending on overhead and market place.I would think in your situation you will price jobs at a flat rate (not by the hour).Look at the job add 15 min for underestimating then charge no less than 20 hr.As you get more involved you will raise prices and cut out less profitable accounts.I started by myself doing mainly maintenance never knowing what would happen . .Growing is never easy trust me Ive had many growing pains along the way and still do.Working for less than 20 hr just wouldnt be worth your while you wont realize until tax time whats involved.less than 20 hr - you are farther ahead to work for someone else.GOOD lUCK
03-16-2001, 09:09 PM
there are other things to consider-besides gas count insc.on biz,insc in truck,wearntear on truck,fuel to go to and from job,cost of running equip.,equipment itself and what is left is yours.alot of customers don't realize what we spend.
03-16-2001, 10:47 PM
Open an Excel spreadsheet and build your budget of costs.
Labor and Materials are direct costs. They should total no more than 50% of your gross income. 45% is more like it.
By labor, if your a one man operation, thats what you pay yourself. If more than that then all your labor. at some point wiht multiple employees, you become overhead and go belwo the line into general and administrative expense.
If you make $5,000 a month then you should have to pay your self at least $ 2,250 before taxes. Thats not very much.You then have $ 2,750 to pay for your insurances, gas, equipment payments, truck payments, repairs and all the other items that need to be paid.I would be looking for at least $ 750 or more in net profit or don't bother being in business. Put the money in mutal funds and get a day job. It's a better use of your money.
I will be publishing a guide to Starting and expanding a one person landscape business in another month or so. It will have budgets and other financial items. If your looking at a full time business you need to be prepared to replace $ 36,000 in salary and benifits. Base your budget off that and build backwards from your avaliable hours to come up with your labor, and diect costs and overhead costs. Get the cost then add at least 15% profit. You can make 20% or better net profit in this business after you pay your self. To make the big bucks, you need to expand and sell more hours, which brings you more profit.
03-16-2001, 11:29 PM
I would have to say that you and you only can decide what your time is worth because for us to try and tell you that you must make this amount or it is not worth your time is crazy because I have found that I average about 14.00/hr after all taxes and upkeep which most people would say im crazy for having my own business and only averaging this amount BUT Im free to run an errand for my wife if needed or be at the school for my kids play and be there for my 6yr olds to get off the bus @3:30 everyday which I was not b4 I started this business It all depends on what is important in your life and Im not saying $ is not important but be sure to listen to your heart and not only the bottom line!!!
Good luck at whatever ya decide to do!!
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