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premierlawncare
10-01-2005, 02:24 PM
How much profit do you make from an employee? I have 100 accounts and run 1 truck. I am a owner/foreman and have 1 employee. I think that I profit 20% from my (good) employee. What do you think your profit is?

I average about $50 an hour for the day, 8 hour day is $400. :cool:

I estimate that if I did all the work alone I would make about $37.50 an hour.

Keep in mind I am using a 36 stander for all 100 homes. I really need a 52 stander for 70 of the 100 to cut down more time.

I figure I make $12.50 more an hour with 1 worker. I pay him $10 an hour. Thats a $2.50 per hour profit or 25% return on investment.

Today my worker asked for a raise. payup I told him no!
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On a 2nd thought, recently I had a 3 man crew doing 100 homes. Myself (foreman) and 2 workers. One of the workers was dragging his feet. For example I watched (clocked) him one day finish blowing off a med. sized home when we went to start a neighbors house. He took 25 minutes. :sleeping: I couldnt believe it. I confronted him about it. :realmad: Why did it take you 25 minutes ? he said there was alot of grass, blah blah blah. I let him go the next week.

He called my 3 times a day for a week trying to get his job back. :cry:

I was losing money on this employee by talking to him and his slow work.
We work fast and the rest in the truck!!



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Fantasy Lawns
10-01-2005, 03:22 PM
Your gonna need to know ALL your YEARLY operating cost before you can figure a REAL number .... anything before that is kinda guess work .... sure one can create an operating budget .... but these are general based on previous numbers & current cost (bills, etc) .... n from here we can "estimate" a profit per hourly rate ... per employee

Anyways with that being said .... my average employee cost me $12.62 in the month of Sept .... total payroll with taxes & W/C was .... their average hourly rate is only $9.50 .... BUT this also includes my Foreman's salary .... so the $12.62 is a little inflated (based on a +$11K payroll & just over 900 hours of monthly labor) ... the point I'm trying to put across is .... just because you are paying him $10 per hour ... he is really costing you more when you input taxes & W/C if you have it

That ALL being said ... fore me .... ALL cost figured .... that's direct, indirect & overhead ... last year I averaged just under $10 per hour ..... PROFIT .... per employee total yearly hours

premierlawncare
10-01-2005, 04:05 PM
Are you a working owner/foreman? How many trucks/crews do you run?

Thirdpete
10-01-2005, 08:36 PM
grossing 400 a day, you should have bought that new stander already.

premierlawncare
10-01-2005, 08:48 PM
I just bought 1 new stander last month. 36. are you saying I should have bought 2? :)

KINGjosh
10-01-2005, 09:23 PM
First off, Its really nice to see someone else on here from Fort Lauderdale. We're both in a real extreme market. Know body on this site has any idea what we have to deal with! Thats an awsome mower thogh ,I hear from local LCO's.

How tight is your route? How many sub-cities do your accounts extend to?

premierlawncare
10-01-2005, 10:49 PM
Hey Josh, do you use a contract? I am going to monthly payments and contract come next april.

Mower For Less
10-01-2005, 11:00 PM
I average about $15 per hour PROFIT per employee with a 2 man crew. It varies slightly depending on the day and how dense the route is that day, but about $15 is average for the week after overhead is accounted for.

Kevin

PTP
10-01-2005, 11:15 PM
I am not exactly sure. After I crunch the #'s from this year I will have a better idea.

Here is what I do know:
Solo, I was grossing about $45 per hour including drive time. With one helper, I am grossing about $80 including drive time. The employee takes about $14 per hour not including workers comp and stuff like that.

PMLAWN
10-02-2005, 09:51 AM
I figure I make $12.50 more an hour with 1 worker. I pay him $10 an hour. Thats a $2.50 per hour profit or 25% return on investment.



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Your numbers are way off. First he is not costing you $10.00 but with burden added to that is will be more like $13.00 per hour so now you are losing money.
And why only $12.50 an hour more if he is working.
In round numbers I look to get about $50.000 in production per guy.
I run around a 8% profit margin so each guy I have should be putting about $4000 profit into the business.

$50 per hour for the day is not good if it takes 2 guys to do that. You should be running about that per guy if you are doing residential.
We get about $40 per hour (labor rate only)for the commercial stuff we do.
While your direct costs stay the same for added guys you can profit from the indirect cost not going up when you add employees.

surfisher211
10-02-2005, 11:19 AM
when doing side work i charge the people $30 an hour for my laborers and i pay them 10.00 so i make 20 $ an hour on them and my labor rate is $ 50 an hour

PMLAWN
10-02-2005, 11:39 AM
when doing side work i charge the people $30 an hour for my laborers and i pay them 10.00 so i make 20 $ an hour on them and my labor rate is $ 50 an hour
You charge 30 and pay 10 but what about overhead
And why do you have 2 different labor rates
Labor is labor --time is time If YOUR company produces work it should be all at the same rate
And for all the guys that give raises it should only be done when a guy produces more than that raise is going to be
I will pay a guy 2 per hour if he can produce 3 per for me and I will pay a guy 60 per hour if he can produce 90 for me
You buy a mower as a tool to make YOU money
your labor has to be looked at the same way - as tools to make you money.

Evergreenpros
10-02-2005, 12:08 PM
You should really calculate having an employee vs. doing the work yourself with maximum efficiency (most productive equipment).

I'd bet with a 44% larger mower (52 vs 36) you could increase your per hour revenue generation more than the 30% you do with an employee and it would be MUCH cheaper in the long run ($2500 a year for the mower vs $15,000 a year for your employee). Mowers don't ask for raises either!! Your profit would probably skyrocket.

Another angle you need to look at is advertisment. If an employee costs you $15,000 a year and if you make 20% off of his work, that is only $3000 a year Imagine dumping $15,000 a year more in advertisment, attracting more profitable customers, better jobs, tighter routes, etc etc. I'd bet you would make far more than the $18,000 you generate off of the employee, with far less headaches.

By your own calculations you say you profit $2.50 an hour by having an employee. But you dont factor in that you have to do more lawns per day to pay for him. More wear and tear on equipment, more gas, more customer turnover by having more customers which means having to pick up more each year to maintain same profit. I'd bet you are losing money on this guy, which isn't a bad thing in total. There are benefits to having somebody to work with, especially if you get hurt.

But just looking at straight numbers it's tough to justify having an employee without first maximizing your own earning potential. Unless of course you have a goal of having all employees, then you have to bite the bullet and hope down the road it pays off.

The Happy Gardner
10-02-2005, 01:01 PM
My goal is $30 per hour billed per employee. That is achievable and consistent. That's with my average residential lawn at $32 and that's shop door to door with dumping and clean-up.
I could change that with equipment change (larger mowers) but until I get tighter routes it dosn't justify the expense.
I've been doing this for 5 years with 5.5 employees and it's stayed steady.

KINGjosh
10-04-2005, 07:11 PM
Hey Josh, do you use a contract? I am going to monthly payments and contract come next april.

I dont use any contracts. I just have them sign my estimate. At least its something. Some poeple I will charge monthly and some I wont. Poeple who dont give a crap about thier lawn, by not ever feeding it fertilizer or not wanting me to fert, those are the poeple I try to get on monthly payments. Because during the slow season I will still get paid. I also charge monthly for the people who get my complete maintinance package. So I guess really it all depends on the customer or the situation.

premierlawncare
10-04-2005, 08:16 PM
Thanks for the info guys. I appreciate it. I ended up giving my employee $1 hour raise to $11. He keeps improving his work and only occasionally messes up. I told him that's it for the year. :)

My goal for my route is $60 per man hour (with 2 workers). I am not totally sure if I am wording it correct because I am new to the business.

I just bought clip. It is awesome. No more 2 hours a night scheduling.

I hope to buy the 52 stander with the big motor in nov/dec. when it is at the biggest discount through the channel program. (learned about that here too.

Thanks again.

Gnyus
10-05-2005, 09:01 AM
First off, I think that profit per employee depends on the equipement you run.
I run a wb 36, 2X21, 1 trimmer and a handheld blower. I am owner / foreman. When working alone I average 70 to 100$ an hour with a helper it moves up to 90-120 and 2 helper is 105-140an hour. Hour rates includes everything, mowing, trimming, blowing, time in truck, breaks and discharging the clipping at the end of the day.
Keep in mind most of my yard are below 18,000 sq ft.

My calculated costs for truck + equipment + insurrance is about 20$ / hour depending on the month ( I work much more hours during may/june and september/october than in july/august)
Gaz is around 5$-10$ an hour
I pay my employees 8$ /hour with deductions they cost me about 11,50$ an hours each.
Assuming that my time is worth 10$, here are my profits

Revenu-costs=profits :blob3:
Alone (70 to 100)-(20+7.50+10)=32,50 to 62,50 an hour profits
1 helper =40 to 70 profits
2 helper=45 to 90 profits

I've been calculating this during the past coupleof week.
Notice that I use 2 helpers when my route contains large yard

PMLAWN
10-05-2005, 09:26 AM
First off, I think that profit per employee depends on the equipement you run.
I run a wb 36, 2X21, 1 trimmer and a handheld blower. I am owner / foreman. When working alone I average 70 to 100$ an hour with a helper it moves up to 90-120 and 2 helper is 105-140an hour. Hour rates includes everything, mowing, trimming, blowing, time in truck, breaks and discharging the clipping at the end of the day.
Keep in mind most of my yard are below 18,000 sq ft.

My calculated costs for truck + equipment + insurrance is about 20$ / hour depending on the month ( I work much more hours during may/june and september/october than in july/august)
Gaz is around 5$-10$ an hour
I pay my employees 8$ /hour with deductions they cost me about 11,50$ an hours each.
Assuming that my time is worth 10$, here are my profits

Revenu-costs=profits :blob3:
Alone (70 to 100)-(20+7.50+10)=32,50 to 62,50 an hour profits
1 helper =40 to 70 profits
2 helper=45 to 90 profits

I've been calculating this during the past coupleof week.
Notice that I use 2 helpers when my route contains large yard
Are these US dollars or Canada.
If US, I'm moving! 70-100 pushing a 36" or 21". You are making great rates

Mower For Less
10-05-2005, 10:06 AM
Even after the conversion to metric, thats still pretty dang good. I'm surprised you can get help for $8 canadian.

Kevin