View Full Version : irrigation project sales per labor hour
09-04-2002, 08:20 PM
Just curious about Man hours against total project cost, or sales per labor hour. We use this number at retail to justify adding more man power at certain times of the year when business increases. Has anyone ever figured total man hours against total project sales price. example project price 3000.00
total man hours 100
sales per labor hour $30.00
per man hour
09-05-2002, 06:52 PM
Out of curiosity I have in the past but I don't measure it regularly.
09-06-2002, 09:32 AM
The only real measurement that I take is gross profit per man per day.....
i.e.......I total the labor and net on parts per man each day......
I have a "nut" I need to collect each day that includes all my overhead and cost of sales figures....EVERYTHING....salary, payroll taxes, advertising costs, rent, van leases, blah blah blah.....
I make sure that I hit this nut each day with all the revenue from each guy, each day. The only stone left unturned so to speak is the parts they may buy each day for stock. That number is quite variable so it is tough to stick in the formula. I guess I could stick it in based on what I think I will spend according to our historical purchases......that might work and then track the revenue INCLUDING the parts each day.....I have tried that and it wasn't as consistent.
09-06-2002, 10:07 AM
Profit per hour is about the most meaningful thing in this type of business. Profit margins are dangerous. You might be selling something your bought for $.55 for $2.25 but if you only sell one per hour it isn't doing you much good. A 15%-20% margin might look good on larger dollar stuff but sometimes that doesn't do real well either.
There is nothing like saying I employed 7,000 billable hours/working hours this year and made $70,000. It's real defineable, measureable and can be planned.
I always tell guys contracting/service IS NOT RETAILING! It is a different game that I think may be overlooked in business models and business teaching. We are labor intensive and work off site most of the time with countless variables. Retailing has lots of products in lots of volume with much lower labor in proportion and with out the variables we encounter.
09-06-2002, 06:01 PM
I understand what you mean. I was just looking for an average or to find a common measurement among people in the industry.
To give you some enlightenment, in a retail supermarket labor in a scratch bakery dept runs sometimes 35% of sales that is really huge. They take 17 cents worth of indgredients and sell it for a 1.19 like a loaf of bread and there are many variables to it like humidty water temperature different types of yeast and the shrink or stales can sometimes really cut into the margin. From my expierence so far there is always variables that are known and unknown, some jobs i thought the client was gonna be my largest problem and he ended up helping just to have something to do. Just cause he did it back when he went to college for summer employment. Just love that free help if they know when to stay out of the way. Right now I am a small company with one full timer and a part timer that go back to college in the fall. I have a full time Job and want to turn irrigation and landscaping into my main source of income. This year I am putting almost everything I made ( except a trip for my family to Disney World) back into this start up business. I dont have the guts to borrow large sums of money so I guess you could call me Shoestring. but the bottom line looked good this year. I bought my own mini sneaker and used the family Ford explorer to pull it with. What do i need next to trade up for a vehicle, an S-10 or a 1/2 ton or 3/4 ton or a full size van f350 I just dont want to end up with to much vehicle and over commit the budget. It seems my Sales per labor hour question will have to be my own management tool ( one of several) How bought a quick reccomendation on a vehicle for sprinkling / landscaping with sales of around 50,000 a year.
Dont Laugh its only a sideline right know
09-07-2002, 12:02 PM
Most guys around here use vans or utility body trucks in 3/4 or 1 ton size.
Vans are cheap and everything is easily closed up. My preference is for utility bodies. For install work and service a one tone works best. A pipe rack can be installed on top and a mini sneaker or maxi can be driven right up inside with 2 portable ramps. Other wise a trailer will do for the machine. A utility measn never climbing inside on your knees and over top of tools and boxes lying on the floor.
We put all the commonly used stuff in the curb side compartments and all other stuff on the driver side. WE used to have a 9' body and we stocked up to 2" fittings in that. I replaced it in '97 with an 11' and we have room for 3". The cabinets are 18"-22" deep. I forget, but I know they are deeper than the old truck and ther is less width inside the bed.
Some guys use an enclosed trailer with a rack on top or on top of the truck. It contains shelving, tools, materials and machine. Just hook up with any truck and go. A good 3/4 ton pick up with some space for material storage would allow this truck to do service or just hook up to the install trailer for a job. I think it has merit. Make it a 4 door crew cab and you could really go crazy.
09-09-2002, 03:08 AM
We went from a pick-up with all fittings in boxes to a 1-ton utility bed truck. GREAT CHOICE. We purchased an old phone company truck and it works GREAT. all compartments hold fittings, tools, wiring, etc... we just drive this truck to the site with the trencher on the trailer and go to work. UTILITY BED IS THE BEST.
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