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grassmasterswilson
02-07-2012, 02:23 PM
Anyone care to say what percent they are getting? Most of my residential lawns are getting above 50% the best I can figure. The smaller the lawn the larger the % profit. With commercial I am figureing in 15-20% profit. I would rather lose a job to a low baller than get one and not make anything.

BBC.lawn.services
02-07-2012, 03:10 PM
Here's what I put together.

I calculated all my numbers per working hour here's what I'm getting:
$25 per hour for the guy running the ZTR mower
here's the breakdown per hour -
$12 salary
$4.5 gas
$1 insurance
$3.5 mower replacement (est. 1,500 hr. life, initial cost $5,000)
Maintenance + miscellaneous expenses (truck gas, trailer wear and tear) - $4

$18 per working hour for the helper/weed eater/push mower guy
$12 salary
$3 gas
$1 insurance
$.50 equipment
maintenance/other expenses - $1.5

Puts us at $43 per working hour
company profits/taxes/rainy day fund (pretty much just equipment reinvestment money.) 16% = $7 (rounded up .12 cents)

= $50 2 man working hour

So I try to make 16% on top after all foreseeable expense are payed. Thou... with a truck the price would go up. Forgot to plug that in.

orangemower
02-07-2012, 03:16 PM
Here's what I put together.

I calculated all my numbers per working hour here's what I'm getting:
$25 per hour for the guy running the ZTR mower
here's the breakdown per hour -
$12 salary
$4.5 gas
$1 insurance
$3.5 mower replacement (est. 1,500 hr. life, initial cost $5,000)
Maintenance + miscellaneous expenses (truck gas, trailer wear and tear) - $4

$18 per working hour for the helper/weed eater/push mower guy
$12 salary
$3 gas
$1 insurance
$.50 equipment
maintenance/other expenses - $1.5

Puts us at $43 per working hour
company profits/taxes/rainy day fund (pretty much just equipment reinvestment money.) 16% = $7 (rounded up .12 cents)

= $50 2 man working hour

So I try to make 16% on top after all foreseeable expense are payed. Thou... with a truck the price would go up. Forgot to plug that in.
Those are practically lowballer prices. $25 an hour for a ztr mower AND operator? Where's your profit? WOW $43 an hour for two guys and all the expense? Holy cow that's cheap. You're driving the prices down with those numbers.

BBC.lawn.services
02-07-2012, 03:48 PM
Lol... that's what I look at when I'm giving a bid. This is purely my direct expenses. I have truck/trailer payments to factor in. as well as tools/workshop stuff etc.

I'm still developing my system for expenses so this is a work in progress. Where do you see that I need to charge more?

This is more for small commercial and residential.

When ALL expense are factored in than it equals about a dollar a minute for (less for weed eater guy becasue they generally don't cost to much.) but for the ZTR guys (and to cover business related expense) it equals a bit more than a buck per minute. It's this still low balling?

djagusch
02-07-2012, 04:10 PM
Here's what I put together.

I calculated all my numbers per working hour here's what I'm getting:
$25 per hour for the guy running the ZTR mower
here's the breakdown per hour -
$12 salaryDoes this include employer side taxes (tax, unemployment, etc?) It seems really low unless you are paying really low.
$4.5 gas Yep
$1 insurance ok
$3.5 mower replacement (est. 1,500 hr. life, initial cost $5,000) what ztr are you buying for 5k that last 1500 hrs? I put in $5 for that 10K mower 2000hrs
Maintenance + miscellaneous expenses (truck gas, trailer wear and tear) - $4if this includes mower maintenance (oil, grease, belts, blades) you might be close for only those items. To add the truck and trailer $4 is really low.

$18 per working hour for the helper/weed eater/push mower guy
$12 salary
$3 gas
$1 insurance
$.50 equipmentI think this is low, this guy has a couple ground of equipment to use at anytime
maintenance/other expenses - $1.5

Puts us at $43 per working hour
company profits/taxes/rainy day fund (pretty much just equipment reinvestment money.) 16% = $7 (rounded up .12 cents)

= $50 2 man working hour

So I try to make 16% on top after all foreseeable expense are payed. Thou... with a truck the price would go up. Forgot to plug that in.

Just trying to help you out. I don't think I can have a employee on a site for less than $45/hr with a worth while profit using handheld equipment. Key words is worth while profit.

unkownfl
02-07-2012, 04:19 PM
I think your cost of doing business is way to high. You need to reduce it to be competitive. You spend $7.5 an hour in fuel? $2 dollars an hour on insurance?

fastlane
02-07-2012, 05:46 PM
I think your cost of doing business is way to high. You need to reduce it to be competitive. You spend $7.5 an hour in fuel? $2 dollars an hour on insurance?

Truck, equipment and liability insurance - about $3000 a year. 40hrs a week x 26 cut season = 1040hrs. Insurance is about $3 an hr. I work less than 40 hr so insurance cost more than $3 an hr.

blk90s13
02-07-2012, 05:56 PM
Just trying to help you out. I don't think I can have a employee on a site for less than $45/hr with a worth while profit using handheld equipment. Key words is worth while profit.

That is what I figured as well $45-$50 per man hour

Florida Gardener
02-07-2012, 05:59 PM
Truck, equipment and liability insurance - about $3000 a year. 40hrs a week x 26 cut season = 1040hrs. Insurance is about $3 an hr. I work less than 40 hr so insurance cost more than $3 an hr.

Your paying a lot for insurance. I pay just over $2-K/year for truck/trailer,equip and GL. Time to find new insurance.
Posted via Mobile Device

djagusch
02-07-2012, 06:06 PM
Your paying a lot for insurance. I pay just over $2-K/year for truck/trailer,equip and GL. Time to find new insurance.
Posted via Mobile Device

Just remember insurance can vary greatly. How many trucks/trailers do you own compared to him? What value of equipment compare? Do you have 50K in sales and he has 300K in sales? Is he counting work comp? What coverages? To many variables to say insurance is low or high, FYI the wife shops mine yearly and pay $350/month.

BBC.lawn.services
02-07-2012, 06:11 PM
Thanks so much for that, djagusch! I was just trying to get some more specifics instead on just saying I'm lowballing. Thanks for that!

I totally forgot about taxs on employees... man... that adds about $4 bucks per employe so I'll be paying $16 per employe if I keep the "real" salary at $12. This is my first year to be a registered business so taxes are still new to me. (pretty much the first year to do business so don't get to offended! lol)

Mower replacement cost. - I'm buying used with about 300-400 hours. est. 2000 hrs. life. That is probably a bit optimistic. Always better to be on the low side. I'll up my number a bit.

2.5K sounds like a safe bet to me for total insurance. Keep in mind that I don't run the business 40-50 hrs a week. More like 20-25 hrs. I probably will only go with liability insurance this year. I won't get a truck tell August. (I suppose I'll have to get insurance than but I assume a personal insurance will be all I need?)

Equipment insurance does sound good thou.

Thanks guys!

djagusch
02-07-2012, 06:13 PM
I think your cost of doing business is way to high. You need to reduce it to be competitive. You spend $7.5 an hour in fuel? $2 dollars an hour on insurance?

$7.5/hr of fuel is not much especially for 2 guys. A 61" ZTR eats 1.3 to 1.8 gph in my fleet. So I'm going to shoot for 1.8g/hr at $4/gal to be safe on fuel prices. Now add a trimming going for that hr and include 2stroke oil. His $7.5/hr doesn't sound too far off.

unkownfl
02-07-2012, 06:16 PM
So is this a work only truck? I know your liability insurance on the business can't be much. Unemployment and workers comp can't be much only paying them <$12 this shouldn't be figured twice. You can't figure 100% of your vehicle insurance into your hourly rate if you don't use that vehicle 100% same for fuel etc. This will only mess up your hourly rate and makes you charge a higher rate which entails you to loose business due to higher bids. You would have that insurance premium regardless of the business or not. Same with the payment on the truck you would have the payment regardless of the business or not if it's not 100% business use. Still $7.5 an hour in fuel is crazy high for a mowing gig. $5.5 in maintenance what do you have an airplane? Figuring the hourly rate with a full hour on ztr can be tricky. Are you figuring this out for a specific job or day? Why would you figure a total of 10 hours on the mower if he only uses it for 6 and the rest doing other things on the job. I highly doubt any operation is running the mower all day without down time job to job.

orangemower
02-07-2012, 06:18 PM
Thanks so much for that, djagusch! I was just trying to get some more specifics instead on just saying I'm lowballing. Thanks for that!

I totally forgot about taxs on employees... man... that adds about $4 bucks per employe so I'll be paying $16 per employe if I keep the "real" salary at $12. This is my first year to be a registered business so taxes are still new to me. (pretty much the first year to do business so don't get to offended! lol)

Mower replacement cost. - I'm buying used with about 300-400 hours. est. 2000 hrs. life. That is probably a bit optimistic. Always better to be on the low side. I'll up my number a bit.

2.5K sounds like a safe bet to me for total insurance. Keep in mind that I don't run the business 40-50 hrs a week. More like 20-25 hrs. I probably will only go with liability insurance this year. I won't get a truck tell August. (I suppose I'll have to get insurance than but I assume a personal insurance will be all I need?)

Equipment insurance does sound good thou.

Thanks guys!
No, you'll need commercial insurance for the truck. It's best to shop for a policy that covers everything. Liability, truck and equipment. It's going to be cheaper then separating them. You could even add a umbrella policy that would have even more coverage. Also, the number of account you have makes a difference on the price. The more you have, the higher it goes.

grass-scapes
02-07-2012, 06:22 PM
Fuel is a big expense and its only going to go up.

Last fiscal year, I spent 12K on fuel for one crew

unkownfl
02-07-2012, 06:24 PM
Fuel is a big expense and its only going to go up.

Last fiscal year, I spent 12K on fuel for one crew

That's only 5.77 per hour and I know they didn't work 52 weeks of 40 hours in NC mowing.

BBC.lawn.services
02-07-2012, 06:31 PM
Oh, alrighty. You guys are quick on the replies today!

Sounds like a nice big umbrella policy would be best than. Might as well get insurance for the truck along with everything else. 2k isn't much to pay for peace of mind.

unknownfl - well I do have that helicopter... works great for holding the mower up for changing blades. I'm gonna pay it off in about 2,500 years. :laugh:

as far as fuel price. I'm trying to leave room in case of a price at the pump increase. My ZTR uses a little over a gallon an hour (48" 19 hp Kawi) I est. 1.5 g. at $3.50 a g.
weed eater/blower/push mower - 1 gallon an hour. (oil for 4 mix'es included) $3.50.

Well... I est. for down time etc. If I have a job that would take me an 1 hr. solo. Assume I use the ZTR for 40 min. I would than take my hourly total which applies for pretty much any sitition. and reduce it by a 1/3. Same with the price using smaller equipment. I would take 2/3 of that. Than add the business profit on top and call it a bid!

unkownfl
02-07-2012, 06:34 PM
See the problem with your hourly rate is, you're trying to combine fixed and variable rates to some how give you a skewed hourly rate.

On the insurance aspect it will vary state to state. In Florida you can get a normal policy on the vehicle assuming it isn't a commercial truck like a dump etc. and just add business use to the policy. A commercial policy is more for a dump truck, tractor trailer, etc. Then you could buy a policy for general liability for x amount. This will be based off your gross revenue, equipment if you chose, and number of employees. Usually will be less than 500 per year for a solo person and maybe a 100 or 2 more for 2 employees. If you add your equipment it normally will have to be paid in full at least the rider will be and that will probably at least double your premium.

BBC.lawn.services
02-07-2012, 06:52 PM
I see what you mean about the different variables. The hourly rate it just something to which I can move around to fit specific jobs etc. Kind of a ballpark est. but it helps none the less.

clydebusa
02-07-2012, 07:10 PM
Here's what I put together.

I calculated all my numbers per working hour here's what I'm getting:
$25 per hour for the guy running the ZTR mower
here's the breakdown per hour -
$12 salary
$4.5 gas
$1 insurance
$3.5 mower replacement (est. 1,500 hr. life, initial cost $5,000)
Maintenance + miscellaneous expenses (truck gas, trailer wear and tear) - $4

$18 per working hour for the helper/weed eater/push mower guy
$12 salary
$3 gas
$1 insurance
$.50 equipment
maintenance/other expenses - $1.5

Puts us at $43 per working hour
company profits/taxes/rainy day fund (pretty much just equipment reinvestment money.) 16% = $7 (rounded up .12 cents)

= $50 2 man working hour

So I try to make 16% on top after all foreseeable expense are payed. Thou... with a truck the price would go up. Forgot to plug that in.

Good lord I was looking at those numbers and said man mine is around 50 and then noticed you are OKC, I am Tulsa. I do finger a little more than 1500 hours on replacement. A couple of years ago a rental place told me they figure closer to 3k to 3.5k.

BBC.lawn.services
02-07-2012, 08:46 PM
Hey! Good to see another Oklahoma guy on here. I'm actually Ponca City. So far the lawn industry has treated my decently here. Temp. in the summer defiantly is tough as well as the limited grass growth during that time.

Always wondered whether people don't pay as much here for lawn stuff because for the most part our lawns don't look to good on most years... maybe not thou.

Nice that our un-employment rate is only 6.8%, I think it keeps some of the lowballers out because they have jobs. This theory is yet to be proven thou. lol

Flex-Deck
02-07-2012, 10:19 PM
I keep it simple - Last year, gross $125K - I have 5 mowers, trade one each year for $3500 - $4000/yr. I put $4000 into a savings account for truck trailer depreciation,
I paid myself $11000 (W2)
I paid my wife $9000 (W2)
S Corporation Dividend (Left over Cash after all bills and employee wages were pd) - $36000

That is a total of $56000 true net on $125 Gross

clydebusa
02-10-2012, 09:21 AM
Hey! Good to see another Oklahoma guy on here. I'm actually Ponca City. So far the lawn industry has treated my decently here. Temp. in the summer defiantly is tough as well as the limited grass growth during that time.

Always wondered whether people don't pay as much here for lawn stuff because for the most part our lawns don't look to good on most years... maybe not thou.

Nice that our un-employment rate is only 6.8%, I think it keeps some of the lowballers out because they have jobs. This theory is yet to be proven thou. lol

Have a few friends that live in Ponca. Love the Marlin Mansion. Hate the wind. In the last 20 so years I have been to Ponca 30 to 40 times I believe the wind has blown all but once. Take care and go eat at the head country BBQ joint! :cool2:

unkownfl
02-10-2012, 01:10 PM
I keep it simple - Last year, gross $125K - I have 5 mowers, trade one each year for $3500 - $4000/yr. I put $4000 into a savings account for truck trailer depreciation,
I paid myself $11000 (W2)
I paid my wife $9000 (W2)
S Corporation Dividend (Left over Cash after all bills and employee wages were pd) - $36000

That is a total of $56000 true net on $125 Gross

Your asking for it. You're paying pretty low wages and to much in distributions (what you're calling dividends). I don't know your age but you're not paying much into your SS and medicare.

clydebusa
02-10-2012, 03:36 PM
I keep it simple - Last year, gross $125K - I have 5 mowers, trade one each year for $3500 - $4000/yr. I put $4000 into a savings account for truck trailer depreciation,
I paid myself $11000 (W2)
I paid my wife $9000 (W2)
S Corporation Dividend (Left over Cash after all bills and employee wages were pd) - $36000

That is a total of $56000 true net on $125 Gross

Pretty good congradulations, my numbers are not as good. 2 years ago bought some equipment didnt this last year. CPA said more taxes please. So this year I will dump some money at the end of the year. Maybe a business trip to beach!

Flex-Deck
02-10-2012, 04:36 PM
Your asking for it. You're paying pretty low wages and to much in distributions (what you're calling dividends). I don't know your age but you're not paying much into your SS and medicare.

I pay myself and my wife $15/hr. Interesting how people make observations and come to conclusions without the facts. I am retired, and collecting SS.
They were concerned about how much money I was going to make because it was something they like to know in case they need to penalize my SS payment. In discussions with them (I filled out a 5 page business forcast) I bluntly asked them if they thought $15/hr to sit on a mower was to low. They were actually quite impressed that I was willing to subject that much to SS taxes and income tax. I pay income tax on the distribution, and that is the law to the letter, and I am following it. I was in a high income job for 38 years and paid in maximum on SS and medicare for those 38 years, and I am offended when people make assumptions based on ignorance that I am not carrying my end of the load

Patriot Services
02-10-2012, 05:01 PM
I keep it simple - Last year, gross $125K - I have 5 mowers, trade one each year for $3500 - $4000/yr. I put $4000 into a savings account for truck trailer depreciation,
I paid myself $11000 (W2)
I paid my wife $9000 (W2)
S Corporation Dividend (Left over Cash after all bills and employee wages were pd) - $36000

That is a total of $56000 true net on $125 Gross

Your CPA should be talking you into a SEP IRA.:usflag:

TJLANDS
02-10-2012, 05:15 PM
I keep it simple - Last year, gross $125K - I have 5 mowers, trade one each year for $3500 - $4000/yr. I put $4000 into a savings account for truck trailer depreciation,
I paid myself $11000 (W2)
I paid my wife $9000 (W2)
S Corporation Dividend (Left over Cash after all bills and employee wages were pd) - $36000

That is a total of $56000 true net on $125 Gross

Cmon guys, why do you post this.
True net? really
Did you take the "Dividend" or reinvest it?
File joint or separate?

If you took it , Let me know how much taxes you pay on $56000 with more than 2/3 from dividend, and then maybe we will be closer to your
"true net".

Flex-Deck
02-10-2012, 05:26 PM
Cmon guys, why do you post this.
True net? really
Did you take the "Dividend" or reinvest it?
File joint or separate?

If you took it , Let me know how much taxes you pay on $56000 with more than 2/3 from dividend, and then maybe we will be closer to your
"true net".

The true net is the net the Lawn Mowing operation pays me, or "My income" is $56,000. I am responsible for paying taxes on my income on a personal level. If you ask a person for a job, and they say your wages will be $60,000 a year, that means they are going to pay you $60,000 minus taxes and SS. What is the big problem.

TJLANDS
02-10-2012, 07:27 PM
Posted via Mobile Device

TJLANDS
02-10-2012, 07:32 PM
you are wrong,

Sorry its not even worth taking about,
Have at it
Posted via Mobile Device

Grasskeepers
02-11-2012, 02:03 PM
i like the commericals i don't feel bad when i charge alot, i have 4 places on one block i charge them 80 each i unload once with my mower and timmer and finish them in 80 minutes, on a dually 44 thats profit

i perfer to work smarter not harder

Set Apart Lawn Care
02-11-2012, 08:04 PM
To BBC Lawn Care,

FYI on the insurance if you are still shopping, I went with The Hartford this year, its was $2,300 for 1,000,000 general liability plus $10,000 in equipment coverate, $1,300 for commercial auto, and my workers comp is pay as you go. I turn in my payroll each week and they debit the appropriate amount from my account, I estimated $60,000 for payroll not including myself and they estimated around $3,000 for workers comp. I also had the choice to break the GL and commercial auto into payments which is nice.

On your prices, that is exactly what I wanted to charge 4 years ago when I started. I worked my butt off and made no money! When doing residential we average $70-$80 per hour on a two man and $100 or so for a 3 man. The third guy really doesnt profit me much, but it enables me to do more yards, and hopefully train one guy to run a 2nd crew when I can afford the additional equipment. We do better per hour each year as we get more and more yards in concentrated areas.

You said this was your first year officially in business, here are a couple things I learned the hard way.
1 - If they dont pay, complain, or refuse to get on a regular schedule just drop them. My first year I was so desperate to have customers I'd take on anyone and they ran me into the ground.

2 - Have an efficient billing system so that you get your money fast. I offer customers a 5% discount to pay at the beginning of the month and may of them do. It is to hard to be their bank, and for me waiting for checks to come in after I've given them a paper invoice just took to long. I'd ended up using my savings to pay my overhead until checks finally came in. No Good!

3 - I dont know what you can handle, but dont go after things you cant handle. I really wanted to get big yards that paid a lot of money, but I didn't have the infrastructure to support that and couldnt compete with companies that had 4 man crews with multiple zero turn riders. I was a two man operation with to 36" wb and two 21" hondas. I waisted to much time.

My first three years were tough and I made a lot of mistakes. You'll do well, way better than me if your patient, work hard with persistance, and know it always seems to cost more to operate than you want it to. Thats my 2 cents.
Hopefully I am just telling you things you already know!

unkownfl
02-16-2012, 11:11 PM
I pay myself and my wife $15/hr. Interesting how people make observations and come to conclusions without the facts. I am retired, and collecting SS.
They were concerned about how much money I was going to make because it was something they like to know in case they need to penalize my SS payment. In discussions with them (I filled out a 5 page business forcast) I bluntly asked them if they thought $15/hr to sit on a mower was to low. They were actually quite impressed that I was willing to subject that much to SS taxes and income tax. I pay income tax on the distribution, and that is the law to the letter, and I am following it. I was in a high income job for 38 years and paid in maximum on SS and medicare for those 38 years, and I am offended when people make assumptions based on ignorance that I am not carrying my end of the load

$93.70 per man hour.... Yeah ok... Did you pay yourself only when mowing? How about estimates, working late on the computer, billing, and sitting at the bank making deposits or did you do all that for free no wages earned?



$20000/15 1334 hours $125,000/1334=$90.70 per hour just showing my math teacher... I would love to learn how to achieve that...