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grassmasterswilson
01-13-2010, 06:01 PM
I am currently a solo operator and hire a part time worker during the summer for a coupld of weeks. Over the last couple of years I have averaged around $45/hour billing rate (cosidering everything I billed out).

What increase do you guys add to the billing rate per employee? If I pay a guy $10/hr I wouldn't add 10 to the billing rate. We will be able to get more done per hour. I may have to figure it out once I hire someone, but was just curious from anyone who have taken the next step.

sehitchman
01-13-2010, 06:42 PM
Your rate to the customer should stay the same with a little for inflation this year. Unless you are actually charging them by the hour, then it should be nearly double the $45 per hour you currently charge. You should be 60-80% more efficient with good help, so your account billing should be that much more to cover the labor costs. So with both of you on the job 60% of your $45 would mean you should bill at least $27 per hour for the assistant. That is way low, but should give you a start. For some reason, you can never hire anyone and get the same production as yourself. If you find that you are doing more jobs but after paying the employee you don't have anymore income. Then you are not really increasing productivity or profit. Keep in mind, with increased operation time, the equipment will wear out twice as fast also.

meicher806
01-13-2010, 07:26 PM
what do you charge for yourself? thats your hourly rate now double it. that's your new hourly rate. now bill accordingly.

Richard Martin
01-13-2010, 07:50 PM
For some reason, you can never hire anyone and get the same production as yourself.

I've noticed this and given it some thought. I think the reason for it is when you have a "helper" that helper is never assigned the same task as everybody else. The helper only does trimming and then blowing the sidewalks off. If the yard takes longer to mow then it does to trim then you're wasting your helper's potential working time.

Dodge2
01-13-2010, 08:08 PM
I've noticed this and given it some thought. I think the reason for it is when you have a "helper" that helper is never assigned the same task as everybody else. The helper only does trimming and then blowing the sidewalks off. If the yard takes longer to mow then it does to trim then you're wasting your helper's potential working time.

I find with a helper the greatest time savings is in mowing, ( about 90% of what i do), but I find with landscaping, leafs, mulch I am finding that each person is doing like 70% of what I do. I think most of it comes from them being paid by the hour so why would they give me 110% like I do. But if I pay by the job the work usually suffers because they don't have to deal with a angry client.

JNyz
01-13-2010, 08:37 PM
You should have a hourly billing rate for employees. If you own the company you are an employee. So if you charge $45.00 per hour for yourself, you should charge $90.00 for the two of you. Once you add up all your expenses CORRECTLY you will see you still are not charging enough.

Richard Martin
01-14-2010, 06:56 AM
I find with a helper the greatest time savings is in mowing, ( about 90% of what i do), but I find with landscaping, leafs, mulch I am finding that each person is doing like 70% of what I do. I think most of it comes from them being paid by the hour so why would they give me 110% like I do. But if I pay by the job the work usually suffers because they don't have to deal with a angry client.

What I was trying to say is that there is a rate of diminishing returns on employees. You would think that if 1 guy can get a job done in 60 minutes that 2 guys should be able to accomplish that job in 30 minutes but it doesn't work that way. 40 minutes (or more) is the normal rate.

MarcSmith
01-14-2010, 07:33 AM
what do you charge for yourself? thats your hourly rate now double it. that's your new hourly rate. now bill accordingly.
I disagree

you are the "supervisor" and therefore you get top billing and the highest hourly rate. then you got crew leaders, equipment operators, laborers, nose pickers ect...

you can charge a flat rate per man hour. nothing wrong with it. But your clients may get upset when they see that you are putting such a high value on a laborers work. Just some food for thought...


For simplicities sake though you could keep a flat rate of $45 per man per hour. so two men working for 1 hour = $90

meicher806
01-14-2010, 08:46 AM
what do you charge for yourself? thats your hourly rate now double it. that's your new hourly rate. now bill accordingly.

I disagree

you are the "supervisor" and therefore you get top billing and the highest hourly rate. then you got crew leaders, equipment operators, laborers, nose pickers ect...

you can charge a flat rate per man hour. nothing wrong with it. But your clients may get upset when they see that you are putting such a high value on a laborers work. Just some food for thought...


For simplicities sake though you could keep a flat rate of $45 per man per hour. so two men working for 1 hour = $90


That is what i was getting at, keep a flat rate of X, so 2 people working for 1 hour would be X times 2. I also agree with you that you will pay all employees less than your self. but from my experiance the employee will break twice as much crap as you so you need to have the cash flow to repair/replace beat up equiptment. or the accident," well i didnt think that would happen to there place, or i dont know how that rock got under my trimmer and went through there window."

MarcSmith
01-14-2010, 08:55 AM
but from my experiance the employee will break twice as much crap as you so you need to have the cash flow to repair/replace beat up equiptment. or the accident

so true..... :laugh::laugh::laugh:

grassmasterswilson
01-14-2010, 09:00 AM
What I have done in the past is charge say $40-50 for myself and then somewhere around $30 depending on the work for the next guy. Mostly because my time/experience/skills are more valuble.

JNyz
01-14-2010, 03:18 PM
I disagree

you are the "supervisor" and therefore you get top billing and the highest hourly rate. then you got crew leaders, equipment operators, laborers, nose pickers ect...

you can charge a flat rate per man hour. nothing wrong with it. But your clients may get upset when they see that you are putting such a high value on a laborers work. Just some food for thought...


For simplicities sake though you could keep a flat rate of $45 per man per hour. so two men working for 1 hour = $90


Mark,

I have read many of your posts and I respect you in this industry. Your posts hits the nail on the head. To keep it simple you would say for $150.00 an hour you get a foreman and two laborers. Much easier to add up at the end of the day. We all know the foreman is at a higher rate so this is where the client must be educated. Most contractors in my area would never think about explaining this to the client and wonder why they lose T and M jobs.

topsites
01-14-2010, 07:37 PM
Uhm, no...

It takes time to develop a good pricing scheme and I do find over the years
the hourly rate never quite goes away, it is always a part of things it seems.

But I do TRY and price by the job, that is, by the amount of actual work.
By how long I think it will take me to do that.
Once I have a relatively good idea of how long I think it will take me, I give the customer the price.
Yes, long before I even get started on doing any of it I look at the work and come up with the total.
At this point they can take it, or leave it.

This process by which I come up with an upfront price is called estimating.

So if a lawn costs $30 to mow then it costs $30 to mow whether I'm by myself or I show up with a whole crew.
Which is how it should be, all I'm getting at is don't charge the customer more on account of a helper.

Now I suppose if you wanted to charge less you'd probably be all right there
considering I don't see too many customers getting upset about that.

But the hourly rate only comes into play as the work is in progress, you can then gauge how much you were off or
how close to being just right you were, but also whether your worker is really helping or not, and so on.

So estimate what you would quote if you were by yourself, that is how much the job should cost, basically.

JNyz
01-14-2010, 08:15 PM
Uhm, no...

It takes time to develop a good pricing scheme and I do find over the years
the hourly rate never quite goes away, it is always a part of things it seems.

But I do TRY and price by the job, that is, by the amount of actual work.
By how long I think it will take me to do that.
Once I have a relatively good idea of how long I think it will take me, I give the customer the price.
Yes, long before I even get started on doing any of it I look at the work and come up with the total.
At this point they can take it, or leave it.

This process by which I come up with an upfront price is called estimating.

So if a lawn costs $30 to mow then it costs $30 to mow whether I'm by myself or I show up with a whole crew.
Which is how it should be, all I'm getting at is don't charge the customer more on account of a helper.

Now I suppose if you wanted to charge less you'd probably be all right there
considering I don't see too many customers getting upset about that.

But the hourly rate only comes into play as the work is in progress, you can then gauge how much you were off or
how close to being just right you were, but also whether your worker is really helping or not, and so on.

So estimate what you would quote if you were by yourself, that is how much the job should cost, basically.


T S your last sentence is way off. Most laborers will not have knowledge or experience of most owners of a landscaping business. So if you go in bidding what you think it will take you to finish the job and not take into consideration how long it will take your crew to do the job you will not end up getting your hourly rate you need to get.

microcosm
01-29-2010, 07:10 PM
Gentlemen,
Not sure if I understand the general consensus on labor rates in this thread. I too am looking for some help in this area. My previous employer charged a different hourly rate for each employee based on experience and position in the company. The hourly rate was applied when doing work other than mowing. Regular maintenance was given a flat rate based on the estimated time it would take each week with a certain number of men. So I guess my question would be what is the correct way to determine helper rates? Simply doubling the hourly rate based on what you would charge for yourself seems not quit right. But then again maybe it is, I don't know!

FYS777
01-29-2010, 08:23 PM
ya you don't charge more for the mowing, prices but for extra work, it would be 45 per hour per guy!!!!!!!

JNyz
01-31-2010, 04:26 PM
Contractors differ on how they let clients know how they charge. If you charge $45.00 per hour for yourself and add an employee at $45.00 you would be charging $90.00 per hour. You could also tell the client you charge $55.00 for yourself and $35.00 for the employee and the end result would be the same at $90.00 per hour. I found this page while surfing the net one day. If describes how one company lets their clients know how they charge.

http://www.thelawnworks.com/LWRates.pdf

ALC-GregH
02-01-2010, 09:48 AM
I ALWAYS over estimate the hrs per job to cover any problems. I NEVER tell the customer the estimated hrs, only the bottom figure of what the job will cost.

JNyz
02-01-2010, 10:19 AM
That is a good way to do it. Do what works for you.

CircleC
02-01-2010, 08:14 PM
Guys....all you have to do is figure "ALL" your monthly expenses. When I say "ALL" your expenses that means all you expenses.

Rent
Wht you pay yourself
Insurance
Taxes
Attorney fees
Equip rentals
Equip repairs
Equip re-purchases
phone
truck payment
EMPLOYEE COST

and so on....

Take all that and divide by how many hours you work a week...WALA! You have a per MAN hourly rate. No matter if its a forman or a nose picker they are all billed the same. Your taking your cut every hour, its already figured into your cost per hour. Could be $45 could be $55. That is what you need to make per hour to pay bills and make some money. NOT what you need to make per job.

If you had 3 small jobs in a row, all neighbors and it takes you 1 hour and you charge them 20 per mow. You just made $60 that hour, you made over your $45 per hour you need to make....good stop!

And keep in mind....when you pay someone $10 per hour...its really costing you closer to $16 per hour (with insureance, workers comp, taxes ect).

The guy from ALMA broke this down for you a few threads ago...

I'm sure I'm gunna get the know it alls...but hey, thats how I was taught and that guys has been in business for over 30 years and runs a multi millon dollar biz.

TGM
02-02-2010, 04:22 PM
some of you guys probably have to crunch the numbers harder than others, especially in the mowing field. but if i'm not profiting AT LEAST $20 per man hour off a helper, i wouldn't bother. like said above, if you're paying someone $10/hr, $16/hr is more reasonable to your expense of paying them.

i charge $70/hr, i try to charge $70 per man hour regardless, but sometimes in competing i'll go down to $50/hr for a helper if i'm really trying to get the job (mostly construction/maintenance).

again, if i had an employee doing 40 hours a week of mowing i probably couldn't get $70/hr per man hour once done with driving time, etc. ..market wouldn't bear it. staying solo is easier