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View Full Version : How Much Do Your Guys Really Cost You an Hour?


PlantscapeSolutions
09-26-2010, 05:13 PM
Looking at your overhead expenses can be depressing. I'm figuring my four guys cost me about an extra $5 per hour when you factor in your Insurance, CPA, fuel, mowers, trucks, 941 taxes, OT, and other expenses.

What do you think your true labor expenses are? I'm thinking I'm at around $17.32 or more per hour. This does not include the expense of my salary. The markup from mulch, planting material, landscape applications, and other materials cover my salary. If was only a mowing company I would have to add another $7.75 per man hour to cover my salary.

A lot of these low ballers probably don't know what their true expenses are. I lost an account a while back to a guy who claimed he could do everything for 1/2 of what I did it for. The guy made me look like I was making a ton of money. I told my customers the guys numbers just didn't add up and that he wouldn't be around for long.

Well after only a month the other guys employee all quit because they weren't getting paid crap. My customer tried one other company and finally came back with his tail between his legs. I've had this happen several times in the last year or so.

old oak lawn
09-26-2010, 09:46 PM
The way i figure it my guys cost me a extra $3.00 per hour. So they cost me $12.00 per hour salary and a extra $3 for insurance,unemployment, taxes and so on. Not 100% sure on my number but the best i can do. I think most people have no idea.

Texas Lawn
09-27-2010, 06:26 PM
I think its hard to figure out when you combine fixed and variable expenses. I dont do my books that way, I do it based on variable expenses and then calculate my break even

Dugann
09-27-2010, 06:45 PM
$3.25 per hour is what my boys run me extra per hour.

PlantscapeSolutions
09-28-2010, 11:08 PM
I just cut the head count by one and I'm going to really start looking at all the numbers. Today my three guys worked 28.8 man hours and generated $952 in sales almost totally from labor. That is an average sale of $33.06 per man hour. This includes a little time at the shop and of course all the drive time between houses. I'll be interested to see how the rest of the week turns out.

PlantscapeSolutions
09-28-2010, 11:27 PM
Oooops!!!!!!!

TMlawncare
09-28-2010, 11:29 PM
I just cut the head count by one and I'm going to really start looking at all the numbers. Today my three guys worked 28.8 man hours and generated $952 in sales almost totally from labor. That is an average sale of $33.06 per man hour. This includes a little time at the shop and of course all the drive time between houses. I'll be interested to see how the rest of the week turns out.

That is very good productivity. Anytime you can average over $30/man hour throughout the day is very good. Many don't realize how windshield time, bathroom breaks, loading/unloading, etc, takes its toll on obtaining a rate like this. Good post.
Btw, my three man crew worked 24 man hours and grossed $730 today. That figures out to $30.41 per man hour. Some days are better than others.

old oak lawn
09-28-2010, 11:35 PM
ooops 2............

rollinrock
09-29-2010, 02:09 PM
From my experience if you don't tell each guy what you want them to do on each job, then time is wasted trying to figure out who does what. Then when one guys finishes a job hey may stand there watching the other guy work because hes not sure what to do next. But if I give each of them a list of things to do, then I get more work done.

I can go back and ask them if they go such and such done. So each guy is responsible for his time. Rather than not knowing why a job took so long. I know who to talk to.

I would also have each guy write down what he did for the day and estimate how long it took him to get each job done. For example, he might write - mowed front yard 1/2 hr. Trimmed hedges 20 min.

This does a couple of things. It weeds out the time wasters. The responsible guys won't have a problem with this system. Plus it give you a measuring stick to bid other jobs.

PlantscapeSolutions
09-30-2010, 02:24 AM
Today almost the same production as yesterday:
29.35 man hours
sales of $986
$33.59 revenue generated per man hour
$75.85 average revenue per stop

projectlawncare
09-30-2010, 07:06 PM
Hey, I just started out and I'm unsure on the whole man hours deal. What are man hours exactly?

Outdoors_Unlimited
09-30-2010, 07:15 PM
A man hour is 1 man working for 1 hour.

3 guys working for 1 hour is 3 man hours.
Posted via Mobile Device

PlantscapeSolutions
09-30-2010, 10:43 PM
Man, I can believe how consistent these number have been three days in a row. It almost looks like I know what I'm doing. Here's my numbers for today:
29.05 man hours
Sales of $984
$33.87 revenue generated per man hour
$61.50 average revenue per stop

Southern Pride
10-01-2010, 02:40 AM
See my guys cost me right about what I pay them. I have no insurance and taxes to deal with. Don't judge me though. This is my first year. I went from 3-25 accounts (didn't see that coming) and I do not feel that is enough to put on taxes yet. I do plan on getting insured next season, but never first season. My buddy who is big time now did not begin claiming the taxes on his business until last year when he had like 70 accounts. I believe that's the smart way to do it. So yeah, most of you will label me a lowballing A-hole but that's far from the truth. So, my guys don't cost me anymore than what I pay them really.

rufflife00
10-01-2010, 08:52 AM
You Know your exactly right but in the long run you will suffer not doing things the right way if this is going to be a business you are goin to try and make larger and keep for years. If you just plan on it for side money I dont blame you, but if you are makin it a full time thing it may benefit you to start running it like a business early. It will help you estimate true growth and allow you to see the cost of running a business early on. I did the same thing back when i started and was broadsided with all the things that go into running the right way. I was working day and night stessed outttt. Not to mention it will benefit your employees to have payroll. It will allow them to show an income to buy houses, cars, and get credit to there name. I say pay yourself a salary do it right and your business will grow slowly with less painful growing pains.

supercuts
10-01-2010, 09:17 AM
[QUOTE=PlantscapeSolutions;3734683]Looking at your overhead expenses can be depressing. I'm figuring my four guys cost me about an extra $5 per hour when you factor in your Insurance, CPA, fuel, mowers, trucks, 941 taxes, OT, and other expenses.

What do you think your true labor expenses are? I'm thinking I'm at around $17.32 or more per hour. This does not include the expense of my salary. The markup from mulch, planting material, landscape applications, and other materials cover my salary. If was only a mowing company I would have to add another $7.75 per man hour to cover my salary.
QUOTE]

i think your $5/hr is way off. i pay $15.50 per hour, thats $2.33 per hour just in workmans comp insurance. i dont know how you calculate fuel, mowers, trucks, taxes, etc to only be $5/hr. after payroll liablites, workmans comp, and payroll im already at $20+/hr per employee. not sure why your talking abotu adding money to cover yoru salary when this is about how much your employees cost you

PlantscapeSolutions
10-01-2010, 11:20 AM
[QUOTE=PlantscapeSolutions;3734683]Looking at your overhead expenses can be depressing. I'm figuring my four guys cost me about an extra $5 per hour when you factor in your Insurance, CPA, fuel, mowers, trucks, 941 taxes, OT, and other expenses.

What do you think your true labor expenses are? I'm thinking I'm at around $17.32 or more per hour. This does not include the expense of my salary. The markup from mulch, planting material, landscape applications, and other materials cover my salary. If was only a mowing company I would have to add another $7.75 per man hour to cover my salary.
QUOTE]

i think your $5/hr is way off. i pay $15.50 per hour, thats $2.33 per hour just in workmans comp insurance. i dont know how you calculate fuel, mowers, trucks, taxes, etc to only be $5/hr. after payroll liablites, workmans comp, and payroll im already at $20+/hr per employee. not sure why your talking abotu adding money to cover yoru salary when this is about how much your employees cost you

The amount of profit generated from material markups (mulch, fertilizer, landscaping, lighting, ect.) can vary significantly as the amount of this type of work ebbs and flows. This makes it hard to forecast going forward exactly how much I need to count the labor from maintenance work to cover my salary. In a perfect world material markups alone cover my salary and I don't have factor the cost of my salary into my labor expenses.

I really don't have a set salary but $290 a day or so is probably a good figure.

Southern Pride
10-01-2010, 10:30 PM
You Know your exactly right but in the long run you will suffer not doing things the right way if this is going to be a business you are goin to try and make larger and keep for years. If you just plan on it for side money I dont blame you, but if you are makin it a full time thing it may benefit you to start running it like a business early. It will help you estimate true growth and allow you to see the cost of running a business early on. I did the same thing back when i started and was broadsided with all the things that go into running the right way. I was working day and night stessed outttt. Not to mention it will benefit your employees to have payroll. It will allow them to show an income to buy houses, cars, and get credit to there name. I say pay yourself a salary do it right and your business will grow slowly with less painful growing pains.

I was expecting on getting :hammerhead: for my response and attitude, I'm glad you understand. I'm not sure whether I want to build my company into an grass cutting Empire or keep it relatively small. My overall goal is 60 lawns a week (25 now its my first season so I did pretty good) The reason I am unsure is I will be an EMT/Firefighter full time. I think I will not be able to assess how many yards I really want until I get hired and start. (I am in school now) so this EMT job is right around the corner, probably start this time next year so I have this next summer to really get into getting that 60 lawns a week. I never want to go over 1 crew to handle all of the yards in a week. We'll see but I'm glad some of you are understanding and not giving me the :nono: Either way, by the time I get to 60 I will be licensed and insured no matter If I'm solo or have a crew.

old oak lawn
10-01-2010, 10:44 PM
Grass cutting Empire, :laugh: Keep dreaming.

lawnman_scott
10-02-2010, 01:31 PM
See my guys cost me right about what I pay them. I have no insurance and taxes to deal with. Don't judge me though. This is my first year. I went from 3-25 accounts (didn't see that coming) and I do not feel that is enough to put on taxes yet. I won't judge you cause I find any way to pay as little taxes as I can, but it's not really a matter of you feeling that you make enough to pay taxes on. If it were that way I don't think there would be too many paying them.

TMlawncare
10-02-2010, 06:01 PM
See my guys cost me right about what I pay them. I have no insurance and taxes to deal with. Don't judge me though. This is my first year. I went from 3-25 accounts (didn't see that coming) and I do not feel that is enough to put on taxes yet. I do plan on getting insured next season, but never first season. My buddy who is big time now did not begin claiming the taxes on his business until last year when he had like 70 accounts. I believe that's the smart way to do it. So yeah, most of you will label me a lowballing A-hole but that's far from the truth. So, my guys don't cost me anymore than what I pay them really.


Trust me this is not smart. You are evading taxes. If caught you will be fined and put in prison. Now all the rest legit businesses of us are paying into the system and you are not paying your share. Crap you might as will be an illegal. No difference.

Sorry someone needs to explain this to you and your big time friend.

olcllc
10-05-2010, 08:34 AM
Looking at your overhead expenses can be depressing. I'm figuring my four guys cost me about an extra $5 per hour when you factor in your Insurance, CPA, fuel, mowers, trucks, 941 taxes, OT, and other expenses.

What do you think your true labor expenses are? I'm thinking I'm at around $17.32 or more per hour. This does not include the expense of my salary. The markup from mulch, planting material, landscape applications, and other materials cover my salary. If was only a mowing company I would have to add another $7.75 per man hour to cover my salary.

A lot of these low ballers probably don't know what their true expenses are. I lost an account a while back to a guy who claimed he could do everything for 1/2 of what I did it for. The guy made me look like I was making a ton of money. I told my customers the guys numbers just didn't add up and that he wouldn't be around for long.

Well after only a month the other guys employee all quit because they weren't getting paid crap. My customer tried one other company and finally came back with his tail between his legs. I've had this happen several times in the last year or so.

Are you charging sales tax on your materials. I ask because you said your mark-up on materials cover your salary. Legally speaking if you are the end user of the product you can't mark up the materials without charging sales tax. If you were ever audited they'ed stick it to you because you not acting as a licesed retailer. Basically you're buying wholesale, marking up and not paying taxes on the mark-up. The tax man does not like this. Just be careful.

White Gardens
10-05-2010, 10:36 AM
Trust me this is not smart. You are evading taxes. If caught you will be fined and put in prison. Now all the rest legit businesses of us are paying into the system and you are not paying your share. Crap you might as will be an illegal. No difference.

Sorry someone needs to explain this to you and your big time friend.

Agreed.

And on top of it he isn't paying workman's comp either, so if someone is working for him and they get injured, then that would probably be the end of it for him.

I don't care how careful anyone is, Murphy's law will always win.

HioBobcat
10-09-2010, 08:29 PM
Most of my compet. don't carry workers comp,I do.Been in bus. over 20 years.I used my workers comp first time this year when a worker got bit by copperhead moving a bag of mulch.He was in the hospital 5 days.Thank goodness I had coverage.

slave2lawns
11-08-2010, 12:42 PM
I take it that if your not carrying any insurance then your not bidding. Here, we need to carry workman's comp and our insurance has to have an additional $5 mil umbrella on top of our reg. slip and fall coverage which is 1 and 3 mil just to bid and keep certain accounts.

PlantscapeSolutions
11-08-2010, 04:37 PM
Are you charging sales tax on your materials. I ask because you said your mark-up on materials cover your salary. Legally speaking if you are the end user of the product you can't mark up the materials without charging sales tax. If you were ever audited they'ed stick it to you because you not acting as a licesed retailer. Basically you're buying wholesale, marking up and not paying taxes on the mark-up. The tax man does not like this. Just be careful.

Here in Texas everything is taxed. Retaining walls and ponds are tax exempt because they add property value but all else gets taxed. I've been audited and came out clean as a whistle.

Patriot Services
11-10-2010, 09:53 AM
See my guys cost me right about what I pay them. I have no insurance and taxes to deal with. Don't judge me though. This is my first year. I went from 3-25 accounts (didn't see that coming) and I do not feel that is enough to put on taxes yet. I do plan on getting insured next season, but never first season. My buddy who is big time now did not begin claiming the taxes on his business until last year when he had like 70 accounts. I believe that's the smart way to do it. So yeah, most of you will label me a lowballing A-hole but that's far from the truth. So, my guys don't cost me anymore than what I pay them really.

So what should we call you? It sure won't be legitimate business owner. It's good you are a FF/EMT. You will need that stable income when one your "employees" gets hurt and sues you. They will win, but then you might already be in prison for tax evasion. Have fun living in your house of cards Mr Big Business.
Posted via Mobile Device

teejet
11-10-2010, 04:14 PM
He just started, had 3 accounts last yr. Give him a break.

teejet
11-10-2010, 04:19 PM
I do know a guy that has been remodeling homes for yrs. He boasts how smart he is by just cashing the checks and not paying taxes. He also bad mouths other companies about how much they charge. I wouldn't want to be him if the IRS get serious. Some people are in biz for 20 or more yrs and never pay taxes. I just don't see how, and I don't think it is right at all.

Patriot Services
11-10-2010, 04:23 PM
He just started, had 3 accounts last yr. Give him a break.

He has 25 accts and employees.
Posted via Mobile Device

Texas Lawn
11-10-2010, 04:37 PM
what goes around comes around. People who operate without insurance or paying taxes are essentially gambling. Whats the upside? You make some more money then you would have. Yeah we all love extra money.

Downside? Prison time, Audits, losing your business. For me its an easy decision. I think when you operate your business like that, you attract a certain type of customer and employee, neither of which I want anything to do with.