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View Full Version : Labor costs vs Gross sales?


baruch05167
03-20-2007, 12:25 AM
Does anyone else know what their labor costs are compared to their total sales?

I usually run 50%. In other words. If I made $100,000 in sales this year, the labor costs would be $50,000. That includes me when I work on the job. I pay myself an hourly rate for doing the same work an employee on the job would do.

I'm thinking that my labor percentage is too high. Any thoughts?

Baruch

rodfather
03-20-2007, 09:08 AM
It is. Our's were 25.37% for 2006

haybaler
03-20-2007, 09:17 AM
Good question. mine was about 30% last year(not including my labor), but I worked my a++ off. this year I think about 50%. Exmark used to show a pie chart in there brochures showing you how much you spend on Labor, fuel, equipment. basicly they where trying to convince you to buy the biggest mowers possable and spend less on labor.

bullethead
03-20-2007, 11:07 AM
I think it depends on what you do. Is it just maintenance, just landscape or both. Adding materials to the mix is going to affect percentages to some extent. That being said - we have maintenance and construction crews - the blended labor percentage is 45%. My goal is to reduce this to 40% this year through harping on productivity (kind of like an earlier thread this month was discussing)

Tony Clifton
03-20-2007, 11:49 AM
Should be about 25% for landscaping, and 33% for maintenance.

baruch05167
03-20-2007, 12:30 PM
For maintenance it was 50%. My landscaping, which last year was small, was of course much better.

TJLANDS
03-20-2007, 04:30 PM
31.8% for 2006............ 80% Maintenance 20% snow

sunriseturf
03-20-2007, 05:07 PM
Mine runs about a third unless you add in the matching taxes which bumps it up to 42-45%. Depending on how much your payroll is. Yo only pay a certain percentage on unemployment up to 8000 dollars for each employee. That is also a variable rate so it can differ from year to year.

rodfather
03-20-2007, 05:09 PM
It is. Our's were 25.37% for 2006

and yes, that does include matching taxes as well.

Precision
03-20-2007, 06:03 PM
and yes, that does include matching taxes as well.


And Rod, you remain my personal hero. Now if I could only gross what you pay for labor I would be doing ok. :)

bullethead
03-21-2007, 05:09 PM
and yes, that does include matching taxes as well.

Rodfather (2 questions):

How many employees do you have?

What type of work do you do? Is it commercial maintenance, residential mow blow go, high end residential maintenance, high end res design build?

I'm having a hard time getting my little brain wrapped around the concept of labor cost at 28% of total revenue? I'm guessing you must be in some niche - that I aint figured our yet

rodfather
03-21-2007, 05:56 PM
Rodfather (2 questions):

How many employees do you have?

What type of work do you do? Is it commercial maintenance, residential mow blow go, high end residential maintenance, high end res design build?

I'm having a hard time getting my little brain wrapped around the concept of labor cost at 28% of total revenue? I'm guessing you must be in some niche - that I aint figured our yet

This year I will have 2 maint foremen again who make $22.50 an hour and 6-8others mowing, etc. at $17.50 an hour. I would say the majority of my business is high end residential 3 - 5 acre lawns on average with some up at 10 and 12.

2 of my residentials have private polo fields on the property as well. They are 11 acres each and get mowed 2X a week to assure the grass is kept very low and no clippings accumulate.

I do very little commercial maintenance, a couple of lawyers and doctor's offices. I have been at this 14 years full time now and enjoy a very private niche for the most part. My competitors are all friendly, we know one another, and don't undercut or steal business away from each other.

bullethead
03-22-2007, 11:08 AM
Thanks for the reply