I am new to the pesticide business and was wondering how you guys go about figuring out prcing. I figured cost per gallon or per thousand of the chemical but what is the best way to figure labor rates. Not asking for your rates just how to determine what mine should be.Thanks
07-26-2002, 07:59 AM
Like any business, start with all forms of overhead. Fixxed & variable. Plan for replacement of every item you buy. Plan to pay for "stuff" that breaks, get's stolen, or just wears out. Even spill kits have to be paid for.
Then use time study information to determine actual cost. Always include facility & eq. maint. The cost of sales, service calls, debt collection, the whole 9 yards. Unfortunately, the good customers have to pay for the bad ones. But that's just business.
Calculate desired margins. Add it to the rest.
After a while it get's real easy. But don't forget to shop your colleagues/competitors. If you find yourself lower than a guy who's been at this for 10 or more years & has a professional image & solid reputation, then reexamine your expenses. Chances are you've done something wrong. Something this guy's got figured out.
Prices are most accurately charged on a square foot basis. But I think more folks should also calculate & adjust for difficulty factors. Things as simple as hills, tight gates, & call aheads all make a difference in daily production. Time studies are the best way to quantify & understand this data.
I once worked for a guy that made me stand on a hill overlooking a highschool athletic field with binoculars, clip board, & a stop watch while our "big turf crew" was treating the football stadium. Needless to say, they didn't know I was there. This voyeur never looked at bidding/estimating the same way again.
For the record, I got out of applications in 1989. At that time we expected & set goals for applicators at $1200.00 per day for a 1 man truck. That included all materials, which don't amount to very big dollars, but are important none the less. So the per hour value of the truck, the applicator, & materials was $150.00. My last year working on the applicator side, I expended a fair amount of energy implementing a change in practice that would gross us the new figure of $158.50/hr. Sounds easy, but there's a lot to do to capture the whole thing 100% of the time.
I'm sure the other folks here can share much more current data with you than I can.
thansk steve it sounds confusing but im sure liek you said after its figured ot its very easy. That seems lieka very high per hour charge but i guess not once yo figure in materials and time. Any other suggestions?
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