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View Full Version : Calculating costs?


jay12
01-30-2011, 09:56 AM
I know everyones cost is different, but I would like to make sure I am on the right page. For one crew- An employee at 600 a week, fuel at say 200, liability insurance and truck ins. for the year divided over 30 weeks of busy time is say $50 a week, workmans comp (again for me) is say about $55 a week, general useage (twine, 2 stroke oil, blades, oil changes, etc.) avg is probably $30 a week. What we have there is about $935 a week divided by 40 hours is 23.38 an hour. Add a helper at 8 an hour, cost is around 31.38 an hour? Is the math here in general the same figures as everyone uses? I know the ins and workmans comp runs all year, but better to figure on the high side I guess. So tell me where this stands as far as costs go, I notice these threads about cheap mowing and I say theres no way. But I figure these costs and wonder if Im even making enough. I know a lot of you do not want to discuss costs and such but I dont care to, we arent competing against one another. Before someone tears in on equip costs, I would still have the truck and trailers, and atleast one mower. But I would like to hear someones theory on replacement cost, etc. Any thoughts.

4 seasons lawn&land
01-30-2011, 10:30 AM
Am I getting this? Your paying 5 grand a year for workers comp?

jay12
01-30-2011, 12:22 PM
I apologize for not clarifying it is just a round about figure. I figured it based on paying for it over 30 or so weeks, instead of the entire year, because that would be the majority of its use. Figure is based on the high side of everything I suppose. I just wanted thoughts from others. Even though most wont discuss costs.

jay12
01-30-2011, 12:31 PM
I apologize for my indirect question, but are these figures in general pretty regular. I also failed to figure ss & unemployment so theres atleast a couple dollars an hour. I would just like to know if I am on the right page.

Az Gardener
01-30-2011, 01:11 PM
One thing that jumps out at me is you need to divide your numbers into production work hours. You don't generate income loading the rig, sharpening blades, gassing up, or traveling. So you cant divide your number into the hours worked only the hours you are on a job.

here is a link to an oldie but goody about production ratios http://www.lawnsite.com/showthread.php?t=175022&highlight=production+%25

A short version is 40 hours a week times 4.3 weeks a month = 172 work hours assuming no O/T. take that times your avg production ratio, throw 80% out there as an example and you have 172 X .8 = 137.6 production or billable hours. This is the number you have to divide your costs into to get your hourly rate right.

Even then the rate is only right if you are hitting your production numbers.

4 seasons lawn&land
01-30-2011, 06:46 PM
right. The cost to operate 9 hours a day gets divided into the 7 billable hours you have out of the 9.

jay12
01-30-2011, 11:43 PM
That I agree with, something I never really put much thought into, about the billable hours vs work hours, helps a little because I pay him by the week, but that is something I need to study some more about, thanks fellas.

Cajun Cleanin'
01-31-2011, 03:11 AM
WC is gonna be maybe 8 to 12 cents on the dollar.It is based on aformula for your trade.A guy that gets on ladders or lifts pays more for guys that don't and I'm sure there are a thousand other factor but you get the idea .You can exempt yourself if you own the company.

MOturkey
01-31-2011, 08:55 AM
Don't forget depreciation on your equipment.

prezek
01-31-2011, 09:06 AM
I would guess you are in the ballpark. We all calculate differently of course. Going into the season, I like to be conservative, so factor all my yearly expenses into only my mowing season. 7 months. My fall cleanups and snow tend to vary too much and don't want to count on those numbers to pay my bills. I am at about $22 per hour based on 1400 hours. This number also includes my depreciation as well. I assume 2 years on hand helds and 4 years for mowers. I think this is a huge factor most guys fail to account for when they think they are "making money".

prezek
01-31-2011, 09:07 AM
Beat me to it MOturkey...

jay12
01-31-2011, 09:13 PM
My stand on the mowers maybe not the best but it is trading at 3 years around 1000 hours for around $4500 to boot, so we are 4.50 per hour (on the mower), and thats a lot! But we never trade before then, thats just a basis I use. So if I can go 1500 on 4 years trade is probably 5500 so thats around 3.67. These are hours on the mower and not billable of course. but I try to use it as a general basis on the mowers atleast, not perfect math but it helps. Too bad the low ballers dont have math as a strong point I guess or we would all make more money! :laugh: