PDA

View Full Version : ride on cost and labor


grassmasterswilson
11-04-2010, 02:29 PM
I've been told by a few new clients that my app cost was a little high, but my price on seeding/aeration was a little low. That got me to thinking that I might be a little high.

Is $1.08 per 1000 too high for equipment cost with a z-spray and truck?

Anyone care to reveal their per 1000 labor rate?

I welcome all comments publicly or via PM.

BCFLawnLandscape
11-04-2010, 08:46 PM
Most applicators here are around 5.00 per 1k for herbicides and fert applications.

humble1
11-04-2010, 09:05 PM
I've been told by a few new clients that my app cost was a little high, but my price on seeding/aeration was a little low. That got me to thinking that I might be a little high.

Is $1.08 per 1000 too high for equipment cost with a z-spray and truck?

Anyone care to reveal their per 1000 labor rate?

I welcome all comments publicly or via PM.

Are you asking what you should allocate to direct costs per K for overhead costs on the truck and z-spray?
Because that would change depending on how many millions sq ft you do per round and how many rounds per year you do.

I figure how much materials I will use on a stop and I have a profit per hour I work off of, I have an overhead cost per hour not per sq ft. I know how much I need to make everytime I go out of the shop.

rcreech
11-04-2010, 09:31 PM
That is probably a tough one!

It is a shot in the dark really as there are so many variables. You have to look at total acres covered per year, amount of customers, income/acre.

You also have to look at increased effeciencies, tax benefits, depreciation, resale etc.

I bought a Z for 8 grand two years ago and used it for a season and sold it for 5 grand. So it cost me 3 grand for the whole season. I ran that unit over 800 acres and other then fuel and insurance it ended up costing me about $3.75 per acre, BUT I also like to turn my equipment. If I kept it longer the cost would be lower every year.

I like to keep turning ride on's every two seasons just so maintenance is low and wheels are always turning.

ted putnam
11-05-2010, 01:37 AM
That is probably a tough one!

It is a shot in the dark really as there are so many variables. You have to look at total acres covered per year, amount of customers, income/acre.

You also have to look at increased effeciencies, tax benefits, depreciation, resale etc.

I bought a Z for 8 grand two years ago and used it for a season and sold it for 5 grand. So it cost me 3 grand for the whole season. I ran that unit over 800 acres and other then fuel and insurance it ended up costing me about $3.75 per acre, BUT I also like to turn my equipment. If I kept it longer the cost would be lower every year.

I like to keep turning ride on's every two seasons just so maintenance is low and wheels are always turning.

Rod, :nono::hammerhead: You know in your heart that Z would last at least 5 and maybe even 6 with little to no problem.:laugh: You just want to get rid of it after it gets dirty so you don't have to wash it:laugh: Ya know I'm messin with ya.
Serious though. I know that you know that the guy that comes in and buys the brand new truck takes a huge hit and the biggest loss in value simply by driving it off the lot. If he drives it 2 yrs and puts 30k miles on it and sells it he has not recouped his initial loss like he would if he had kept it another 1-2 yrs. That truck has a lot more than 30k miles in it before there is a real chance of problems that would keep it from rolling given he keeps it serviced, etc...
I try to take a pro-active approach to repairs and make them prior to them being a problem. Tires first, bearings next. In the next 3-4 yrs a new motor, etc...
To the OP, I figure the cost/K of my materials. This is set as a percentage of my price/K. Once my materials are covered salaries, repairs, insurance, fuel, etc... comes out of the remaining percentage of the total price. I know that's not breaking it down very much but everything falls into place and always has using this method. Maybe I should have more of a finger on the pulse of the business or a better idea than that would be to have a business manager:laugh:
I'm small but I have a couple part time guys and a couple of trucks and we have plenty of work all year. Gross receipts are substantial given my small operation.

turfcobob
11-05-2010, 10:43 AM
There are two basic schools of thought on using equipment (Trucks Included)
The way Rod is doing it is one way (in my opinion the best way)
that is turning your equipment before it starts costing you down time. When you figure the cost of a repair you are remiss if you do not count lost revenue. Most times you can make it up but sometimes you cannot and it is part of the cost of the failure.
You have to figure the service life of any piece of equipment and turn it at about the half way point whe it still has most of it's value. I worked with one guy who has 19 branches and turns his equipment on the 3 yr mark, regardless of condition. He told me
"I run two years on your warranty and one year on mine then the equipment is sold for 60% of the price of a new one. I do not have down time"

The other school of thought is the keep it till it dies and get 10 years out of it. This requires the overhead of a good shop and Technician to keep the old ones running. The guys that go this way usually do not calculate lost revenue in the repair cost and usually have to number of old " back up" machines to cover down time. This is all part of the cost factor they usually do not count.

Take a look at the guys who use equipment for a business.. i.e. Car Rental Co. Hertz, Avis and etc. they never have old equipment. Why because when a machine is not moving it is not making money but costing money. If your mechanic is really busy you better look at your fleet to see how old it is.

When it comes to Trucks (Pickups that is) there is a way to beat the depreciation game. Buy your pickups from the rental companies like enterprise or budget when they turn their fleet. You can get a $41,000 pickup with 15,000 miles on it and one year old for like $31,000 dollars. Let them take the first year hit. These rental car / truck people turn thousands of pickups of evry breed every year. It is where I go to buy cars for my family and it works great.

More operation tips just ask. Turfcobob