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SullysAllSeasons
01-19-2013, 01:02 AM
So I have been working in the industry while at the same time slowly building my business. I am going full throttle this year but have a few things holding me back...now I may have put the chicken before the egg here but last fall my local Toro dealer had some good deals paired with 0% for 48 months, I bought a 60" Z with collection system, 48" Grandstand and a Giant Vac truck loader. Now that I have the equipment I need to figure my hourly costs in order to get make what I need to pay the bills and stay profitable. I honestly never really paid attention as I just bought my old mower out right to make some beer money and was never really worried about the pay back. I think I have a good idea of what I need to do so if you guys could give me some pointers if I;m wrong....here we go

So I know I will need to break this down per piece of equipment as some things are not always used, such as the bagger. For examples sake though this is what I think....
I paid roughly $23,000 for the package, now assuming I run the whole package 30 hours a week and want it "paid off" in 3 years do I just take the number of mowing weeks in 3 seasons, multiply it by 30hrs and then divide the 23k by whatever the number ends up being?? And then just apply the same formula for each piece since things like the bagger and truck loader will only be working 1/4 the time?? I'm no math wiz, barley passed it in high school lol, but am I on the right track?? Any help or suggestions would be greatly appreciated!

SullysAllSeasons
01-19-2013, 01:14 AM
FORGOT SOMETHING....

I totally forgot to add, I do not currently have a shop but feel like I should be charging like I do so I can get one. How do you go about figuring out how to add that in. Maybe a dumb easy question but you will never know if you dont ask!

JContracting
01-19-2013, 01:50 AM
Don't forget to include your overhead. Figure out the best you can what you'll burn in fuel (I have it calculated what I burn per mile), and then you have insurance, office supplies, advertising budgeting, dump fees, repairs & maintenance, phone, the list goes on. Plus what you want to profit and what you need to make to pay personal bills, personal vehicle, house payment, student loans, credit cards, etc.

When I calculate out my expenses for the upcoming year I prefer it to just know what I have to have per week, per month, and per year, rather than per hour, knowing per hour is very important and I always know what it costs per hour to operate, but I don't always have 40 "billable" hrs in any given week. That's where knowing how much per week or month you must make. For any maintenance work I aim for $75/man hr and hustle hard on the job to get that.

SullysAllSeasons
01-19-2013, 12:57 PM
Yea for sure overhead as well, but I kinda figured those calculations would work out the same. I have a per mile cost down on my truck and trailers. You make a good point about what you need to make daily/monthly, but I know what my bills are and what I want to make, just wondering how to make sure I am achieving that, maybe the same questions and maybe Im over looking th answer but is there some sort of formula to throw all these numbers into and come out with a solid number in the end???

xclusive
01-19-2013, 03:01 PM
Yea for sure overhead as well, but I kinda figured those calculations would work out the same. I have a per mile cost down on my truck and trailers. You make a good point about what you need to make daily/monthly, but I know what my bills are and what I want to make, just wondering how to make sure I am achieving that, maybe the same questions and maybe Im over looking th answer but is there some sort of formula to throw all these numbers into and come out with a solid number in the end???

The formula you are looking for has to be developed by you because everyone has a different operating costs and profit needs. The key is knowing what it costs you to run per hour/minute and then figuring out if that $40/week house is making or costing you money. I have my costs broken down to the minute so I can price my work accordingly. For example, I know that my $40/week house takes 17 minutes to finish (from the time I arrive til the time I pull away) and it costs me $25 so that gives me a $15 profit.

fastlane
01-19-2013, 04:08 PM
The formula you are looking for has to be developed by you because everyone has a different operating costs and profit needs. The key is knowing what it costs you to run per hour/minute and then figuring out if that $40/week house is making or costing you money. I have my costs broken down to the minute so I can price my work accordingly. For example, I know that my $40/week house takes 17 minutes to finish (from the time I arrive til the time I pull away) and it costs me $25 so that gives me a $15 profit.

This is a good example of why everyone needs to figure their own cost per hour. - Eclusive - Is the cost of $25 per 17 minutes for 1 person or a crew of 2 or 3 ?

JContracting
01-19-2013, 06:03 PM
I should note I don't have anyone working for me on maintenance but on installs I usually have help and labor costs are definitely factored in. I'd like to be able to change that this year though. Hopefully the workload will come with my advertising campaigns
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djagusch
01-19-2013, 06:12 PM
I should note I don't have anyone working for me on maintenance but on installs I usually have help and labor costs are definitely factored in. I'd like to be able to change that this year though. Hopefully the workload will come with my advertising campaigns
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Even doing it your self you should have a labor cost figured. Otherwise when you add employees that account won't make you the money it should.
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JContracting
01-19-2013, 06:53 PM
I do have it figured in. My pricing is still in the correct range, however, maintenance work takes a little bit longer than a 2, 3, 4 man crew. I know that when I add employees for maintenance I know what I need per man hour.

cpllawncare
01-19-2013, 10:00 PM
WOW! I keep seeing these crazy man hr numbers on here, $75/mnhr? REALLY? your really quoting your labor rate at $75/mnhr? how much are you paying your guys 40-50/hr?

xclusive
01-20-2013, 01:14 AM
This is a good example of why everyone needs to figure their own cost per hour. - Eclusive - Is the cost of $25 per 17 minutes for 1 person or a crew of 2 or 3 ?

That isn't my real cost just an example, but that is for a 3 man crew. My cost is actually lower than that.

xclusive
01-20-2013, 01:19 AM
WOW! I keep seeing these crazy man hr numbers on here, $75/mnhr? REALLY? your really quoting your labor rate at $75/mnhr? how much are you paying your guys 40-50/hr?

Yes I totally agree with this statement. Maybe 5 years ago that would have been okay but nowadays with every moe, Larry and curly being a landscaper that definitely isn't happening. If you can get that per hour for a 3 or 4 man crew more power to you, but I don't see that happening in this economy.

JContracting
01-20-2013, 04:30 AM
I'm definitely not paying anyone that works for me 40-50/hr. I don't charge by the hour if that's what you are getting at. That's basically the number I aim for and bust a$$ as hard as possible to get that, primarily with clean ups. Around 60-65/man hr for mowing is what I aim for. The numbers vary for installs depending on what the task at hand is.

cpllawncare
01-20-2013, 10:37 AM
I'm definitely not paying anyone that works for me 40-50/hr. I don't charge by the hour if that's what you are getting at. That's basically the number I aim for and bust a$$ as hard as possible to get that, primarily with clean ups. Around 60-65/man hr for mowing is what I aim for. The numbers vary for installs depending on what the task at hand is.

Help me out here, I'm not figuring something right, if you have a two man mowing crew and your getting 60/mnhr your charging $60 for a lawn that takes 30mins to service?

jrs.landscaping
01-20-2013, 12:30 PM
Help me out here, I'm not figuring something right, if you have a two man mowing crew and your getting 60/mnhr your charging $60 for a lawn that takes 30mins to service?

He's solo, a lot of solo guys try to get $60 + PMH. I try to be around $50 PMH to be competetive yet cover my costs.

cpllawncare
01-20-2013, 03:00 PM
Just asking here, man/hr = man/hr weather your solo or two or three?

djagusch
01-20-2013, 03:25 PM
Just asking here, man/hr = man/hr weather your solo or two or three?

His $60 to $75 is obtainable in our market especially in his suburb area. Most of my flat rate monthly contracts have $60 to $75 per hr for work outside the specs of the contract. Nobody flinches when they see the rate. Around here giving $50/hr rate happens but is more the mid to low rate.
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jrs.landscaping
01-20-2013, 03:51 PM
His $60 to $75 is obtainable in our market especially in his suburb area. Most of my flat rate monthly contracts have $60 to $75 per hr for work outside the specs of the contract. Nobody flinches when they see the rate. Around here giving $50/hr rate happens but is more the mid to low rate.
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People around me don't flinch when they see $75 PMH, they :cry:

Some guys down south are talking $30 PMH

Geography has A LOT to do with pricing.

cpllawncare
01-20-2013, 06:30 PM
WOW! Now I know why everybody is moving here! Just don't move here and think your going to get 60-70/mnhr ain't happening. you can get 60/mnhr for mowing but for straight labor more like 30-40/mnhr I was at 45 last year and struggled like crazy on straight labor bids.

JContracting
01-20-2013, 06:55 PM
Help me out here, I'm not figuring something right, if you have a two man mowing crew and your getting 60/mnhr your charging $60 for a lawn that takes 30mins to service?

Yes that is what I'm getting at.

Even if I had employees with me on maintenance properties the numbers per man hour don't change. However, on larger properties I'd be willing to reduce the amt per man/hr a little bit as less truck fuel burnt and wear & tear on trucks & trailers. I have a buddy whose company only does townhouses & commercials for maintenance and they average $50/man hr.

cpllawncare
01-21-2013, 11:35 AM
It's just hard to believe that there is that much difference in cost of living between here and there.I'm seeing guys here charging 25/30 mn/hr just crazy!

GreenGuysLC
01-28-2013, 05:27 PM
I AM in the south....and yep....man hours here are also 60-75. It is called knowing your cost. Factor in your fuel...your oil...your belts...your misc repairs....blades....advertising....office expenses (even small guys have this)....not to mention license...liability ins....auto ins ( the commercial type)...workers comp.... if you can work and cover cost at 30 pmh.....you havent truely looked at your cost. Hell...8 years ago it cost me $20 an hr just for the mower...not including the man sitting on it! Lowballers dont have to low ball to get business. You can still get business and be respectable to the industry...just be willing to lose a bid here and there...i will take my one $70 pmh over your 3 $30pmh any day.
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JContracting
01-28-2013, 05:37 PM
Wholeheartedly agree on all of that post. ↑
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cpllawncare
01-28-2013, 07:32 PM
I AM in the south....and yep....man hours here are also 60-75. It is called knowing your cost. Factor in your fuel...your oil...your belts...your misc repairs....blades....advertising....office expenses (even small guys have this)....not to mention license...liability ins....auto ins ( the commercial type)...workers comp.... if you can work and cover cost at 30 pmh.....you havent truely looked at your cost. Hell...8 years ago it cost me $20 an hr just for the mower...not including the man sitting on it! Lowballers dont have to low ball to get business. You can still get business and be respectable to the industry...just be willing to lose a bid here and there...i will take my one $70 pmh over your 3 $30pmh any day.
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Your solo though! You can't charge that with a crew!

JContracting
01-28-2013, 07:53 PM
Why couldn't you?
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Nate'sLawnCare
01-28-2013, 08:14 PM
I built a spreadsheet for calculating my minimum charge for properties. It calculates my fuel cost for mower and vehicle up to $4.50/gallon, labor to pay a helper(if needed), mowing time based on acres/hour. I also factor in as a cost for replacement and maintenance of my equipment - example is a $8000 mower that I would replace at approx. 2000 hours will be $4/mowing hour to replace. I add in a little extra for maintenance, insurance, licenses, etc. I also have a minimum hourly rate (including travel) to clear after all of this is calculated. I'm working on another spreadsheet along the same lines to do apps since I've started offering that this year.

cpllawncare
01-28-2013, 08:37 PM
Why couldn't you?
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Because nobody is going to pay two guys $70 to spend 30 mins on their lawn ! At least not anybody with any sense!

xclusive
01-28-2013, 09:44 PM
Because nobody is going to pay two guys $70 to spend 30 mins on their lawn ! At least not anybody with any sense!

Im with you on that. I have some lawns that take a half hour with 4 guys. There is no way I can charge $140.00. I would be out of business.

jrs.landscaping
01-29-2013, 08:23 AM
It's kind of the same concept as when guys buy newer/better equipment, they think their price should go up. Business owners know how to figure costs and to trim fat to keep operations lean and expand margins. To the guys making $70 PMH :clapping: if I could get away with it I'd charge that much as well.

cpllawncare
01-29-2013, 09:42 AM
It's kind of the same concept as when guys buy newer/better equipment, they think their price should go up. Business owners know how to figure costs and to trim fat to keep operations lean and expand margins. To the guys making $70 PMH :clapping: if I could get away with it I'd charge that much as well.

If I were solo I would charge $70/pmh, that's just $35 for your avg lawn! We try to get $75/pmh on cleanouts.

GreenGuysLC
01-29-2013, 10:14 AM
Someone here likes to Assume.... so let me clarify. I run crews...no i am NOT solo. Now....when bidding a property...i go bid based on one person.... and charge based on 60-75 pmh. In theory if one man takes an hour...two should take 30 mins. Well those of us that run crews know that isnt alwsys the case. I do find it interesting yoy say 4 guys and 30 minutes isnt worth 140 bucks. Why not? If not...i wouldnt run 4 men....sounds like the property doesnt support it. Guys....wake up. You are undermining the industry and arent profiting at the end. I am telling you... run the numbers. What is Your Operating Cost??? Can you cut for 35 or 40 pmh and make monry? No. If one of my CREWS show up and do a residential in a 1/3 acre type setting.taking only 30 mins. ...i am getting $60. That minimum. Let me further complicate your issue.....do u charge the same rates for each person? If u are running crews (3 person or more). You may have to factor in the trim guys. No i dont expect to get 75 pmh on him. When i bid a property it is more to it than just how long. It is factoring in which route will it be on...how many guys on that crew...mowers/ trimmers needed...total services we are selling....it all factors in. Bottom line... bid based on one man....and 75 pmh. That doesnt mean at the end of the day my crew made 75 pmh...but thats how i bid. And if we do job pr hr...it is 60-75...depending on machines needed. 75.....that accounting for a mowing machine. If you ask me to bid just a weed trimming job....prob be more like 50 pmh. There is no one size fits all....but u gotta understand cost...and running a mower and only getting 35 pmh ...thats whats crazy.
Now to validate myself so cp isnt confused...6 men..three trucks. 3 exmarks lazers...1 toro walkbehind..3 walkers.
My client list includes high end residential... also Target center...lowes x2. Rite aid x3. Zaxbys x2. Ryans. Kohls x3 (adding 4 in spring). And many many more. We work 50 hrs a week....and we do more than just cover cost.
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xclusive
01-29-2013, 12:20 PM
Someone here likes to Assume.... so let me clarify. I run crews...no i am NOT solo. Now....when bidding a property...i go bid based on one person.... and charge based on 60-75 pmh. In theory if one man takes an hour...two should take 30 mins. Well those of us that run crews know that isnt alwsys the case. I do find it interesting yoy say 4 guys and 30 minutes isnt worth 140 bucks. Why not? If not...i wouldnt run 4 men....sounds like the property doesnt support it. Guys....wake up. You are undermining the industry and arent profiting at the end. I am telling you... run the numbers. What is Your Operating Cost??? Can you cut for 35 or 40 pmh and make monry? No. If one of my CREWS show up and do a residential in a 1/3 acre type setting.taking only 30 mins. ...i am getting $60. That minimum. Let me further complicate your issue.....do u charge the same rates for each person? If u are running crews (3 person or more). You may have to factor in the trim guys. No i dont expect to get 75 pmh on him. When i bid a property it is more to it than just how long. It is factoring in which route will it be on...how many guys on that crew...mowers/ trimmers needed...total services we are selling....it all factors in. Bottom line... bid based on one man....and 75 pmh. That doesnt mean at the end of the day my crew made 75 pmh...but thats how i bid. And if we do job pr hr...it is 60-75...depending on machines needed. 75.....that accounting for a mowing machine. If you ask me to bid just a weed trimming job....prob be more like 50 pmh. There is no one size fits all....but u gotta understand cost...and running a mower and only getting 35 pmh ...thats whats crazy.
Now to validate myself so cp isnt confused...6 men..three trucks. 3 exmarks lazers...1 toro walkbehind..3 walkers.
My client list includes high end residential... also Target center...lowes x2. Rite aid x3. Zaxbys x2. Ryans. Kohls x3 (adding 4 in spring). And many many more. We work 50 hrs a week....and we do more than just cover cost.
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I know what it costs me to operate my business and make money. So when I give a price for a service I know that I am making money not losing it. Trust me I wish I could get that kind of money per man hour, but if I did charge that I would not be in business.

GreenGuysLC
01-29-2013, 12:27 PM
If you are charging less than 50 per hr....you are not making money. Let me ask....are you struggling day to day....do you often have trouble paying bills....or cant do the extra things you want? Do you feel pressure to get more clients? If you lose just one...is it gonna hurt u? If so.....look at your bottom line and u can see you arent actually making money. Making money means covering your cost...paying bills...and having some left to save or spend. :
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xclusive
01-29-2013, 01:30 PM
If you are charging less than 50 per hr....you are not making money. Let me ask....are you struggling day to day....do you often have trouble paying bills....or cant do the extra things you want? Do you feel pressure to get more clients? If you lose just one...is it gonna hurt u? If so.....look at your bottom line and u can see you arent actually making money. Making money means covering your cost...paying bills...and having some left to save or spend. :
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As I stated previously I know what it costs me to operate my business, make money and/or be able to save or spend at my discretion.

JContracting
01-29-2013, 01:55 PM
If I were solo I would charge $70/pmh, that's just $35 for your avg lawn! We try to get $75/pmh on cleanouts.

That is my minimum price for an avg size lawn. What is yours?
I agree with the GreenGuys, bidding $50/hr doesn't cut it. Ideally, I shoot for $75/man hr min., however, depending on equipment used, if it is just mowing, $60/man hr suffices.
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LandFakers
01-29-2013, 02:51 PM
Around here I am getting $60-$65/pmh for mowing. Ill break down my costs to operate below...

Mowing
To run 2 52" machines, 1 ZTR, and 1 WB= $9.37/per hour
Two trimmers running for an hour= $.75/hour
Two blowers=1.26/hour
3/4Truck=$.53/ a mile (loaded)
One worker=$20/hour
My wages=$25/hour
Now to figure out what it really costs to mow. The average time for me mow a yard that I have figured to be $60 or one man hour. I have several of these properties and the average time to complete from dropping the gate to picking it up is 27 minutes. I have a fairly tight route and the average drive between properties is 1.47 miles (this is what a winter with barely any snow has given me time to do) and takes about a 5 minutes to drive to the next property in most instances. And then its rinse and repeat. So in 1 hour of running it has cost me just at $56.59 with everybody paid and me doing 2 yards at $60 a piece. So that is a profit after im paid of $63.71 which most of the time goes into marketing, repairs, and everything that it costs to run a business. And at the end of the week of full mowing the amount of leftover money after all that goes out isnt much. Im sure most of you will see the above number and start yelling at the screen but technically that is just me breaking even. Add up the additional costs to run your business and the owner of the business isnt making all that much per hour. Now if I had somebody else working for me and if sat at a desk I would be in trouble.

LandFakers
01-29-2013, 02:54 PM
I can put put up my running costs for all my services I offer, You all should know yours because if you bidding low you can think your making good money until bill time comes around

jrs.landscaping
01-29-2013, 03:33 PM
My client list includes high end residential... also Target center...lowes x2. Rite aid x3. Zaxbys x2. Ryans. Kohls x3 (adding 4 in spring). And many many more. We work 50 hrs a week....and we do more than just cover cost.
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The first set of accounts will most likely pay $75 PMH..... The second set I don't see it. I see what you're saying about hourly labor rates vs. bidding rates, but if your crews don't make $65 - $75 PMH per day how do you figure that is your average rate over all accounts?

WPLC
01-30-2013, 08:59 PM
So with a worker you are only completing 2 $30 lawns per hour? Our eco is still pretty bad here in Michigan, but $50 per hour solo and $100 an hour with worker is pretty managable. If you don't mind, could you post how you figured out cost for different services such as hedge trimming, fall cleanups, and mulch installation?

Gmgbo
01-30-2013, 09:26 PM
When I first started out I thought $40 pmh was way to high. Once I got rolling I realized I wasn't making any money. My jobs are all figured at $60-$75 pmh. I don't tell the customer that.
You really have to sell yourself and your company. Your appearance, knowledge, and expierance go a long way.

Greenguys makes many good points in his posts.

Why are you charging a fraction of what the hvac guy charges to come to your house?
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cpllawncare
01-30-2013, 09:45 PM
That is my minimum price for an avg size lawn. What is yours?
I agree with the GreenGuys, bidding $50/hr doesn't cut it. Ideally, I shoot for $75/man hr min., however, depending on equipment used, if it is just mowing, $60/man hr suffices.
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For an avg 10K lawn $70/hr is the norm we knock out a 10K lawn just mowing in 11 mins we've timed it that's not the trimming and all just the mowing.

GreenGuysLC
01-30-2013, 10:53 PM
When I first started out I thought $40 pmh was way to high. Once I got rolling I realized I wasn't making any money. My jobs are all figured at $60-$75 pmh. I don't tell the customer that.
You really have to sell yourself and your company. Your appearance, knowledge, and expierance go a long way.

Greenguys makes many good points in his posts.

Why are you charging a fraction of what the hvac guy charges to come to your house?
Posted via Mobile Device

Thanks...my opinions are from years of experience and yes...with lots of trial and error. I do like seeing the different numbers that people uae as their operating cost. Gas alone eats $4 per hour....my goal is to pay for a mower in 1500 hrs. I can go into a long spill on how to accurately figure your true operating cost. It gets into everything from blades..belts..oil..grease...filters..tires..and a little for the odd stuff....i can assure you.. if you calculate that...plus your insurance...it is more that $10 an hr.
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