PDA

View Full Version : sent out crew for first time - compare percentages


wrestlingcoach
08-25-2004, 10:24 PM
Does this sound right?

Sent out crew they grossed $272 mowed small lawns. SMALL DAY
they Had 9.5 man hours in the process @ $10 per hour
then plus $1.75 more per man hr for work comp & matching funds
also sent $25 in gas. They had to drive 18 miles one way for one job , I know there is some good windshield time in there.




272.00
-95.00 = 35%
-17.50 = 6.4% ( all together employee expense = 41.4%)
-25.00 = 9.2 %

= $134.50 in profit = 49% profit

does these percentages sound right?


How does other companies compare in percentages?


I know that if I paid like every one else 7-8.50 per hour that would help but pay good - expect good work and they work hard!!!

NCL
08-25-2004, 10:33 PM
How many guys did you send out?

wrestlingcoach
08-25-2004, 10:41 PM
2

one went out early and mowed lawns by himself for a couple of hours while the other guy met up with him after he completed his morning school bus route.

shea 7 hrs
dan 2.5 hrs

probably not the most effiecient but it has to work
since the bus route gives health ins.

HOOLIE
08-25-2004, 10:51 PM
Your numbers aren't taking into account your other expenses, like taxes, payments for trucks/equipment, etc. You'll need to factor all that in as well for a true profit figure.

As for me, I'm solo. But I'd be interested in hearing what others say. BTW, what's the $1.75 matching funds thing?

Trevors Lawn Care
08-25-2004, 10:52 PM
thats sounds very good to me..

It isnt very accurate though....Now figure in what the insurance percentage is, fuel, mower depreciation, and such....Although those should only be a very small percentage it is still a percentage that needs to be looked at....I guess it is more accurate than i first thought, but it the actual number would prolly be some less.

Trevor

ddthomas2
08-25-2004, 10:52 PM
No, you did not make 49% profit! Not even close.

You forgot all of your other overheads. For instance, equipment depreciation and maintenance(repairs, blades, sharpening, cleaning). Same for truck. What about other insurances like general liabilityand vehicle insurance. Billing, accounting, and collection costs. Advertising. Business and Income taxes. What about your time spent managing. Consumables like trimmer string. Any ice in the cooler?

I am sure that I forgot several more.

The message is: Too many people are very unrealistic about what the costs in this business really are. They are the ones who are not here next year. It's pretty easy to make money in spite of your self if you are doing the work. When you start becoming a business by hiring others, it gets a lot tougher.

wrestlingcoach
08-25-2004, 10:56 PM
this is a rough estimate first
i know liab ins, grease blades etc, etc

but

I am more concerned with the % of employee cost


the $1.75 is 8.91% of workers comp plus another 7.65% of social security /medicare plus 1% fed umemployment and another 1 or 2 % state unemploy

wrestlingcoach
08-25-2004, 11:01 PM
Hey I know that the pure bottom line profit isn't close to 49%

especially after buying $22,000 in eqipment this year

but Is the employee cost comparable to other lawn companies
for a general day

for the last 2-3 years my gas expense for the mowers and company truck combined has been 5-6.5 % for the entire year
this year it is running at 6.61% of the gross sales

HOOLIE
08-25-2004, 11:05 PM
Back when I worked for "The Man", his goal was to keep payroll under 35% of gross revenue. Under 30% and he was real happy, but anything over 35% started to hurt him (or so "The Man" claimed)

But every LCO is going to have different overhead costs, what's bad for one might be OK for another.

Kelly's Landscaping
08-25-2004, 11:09 PM
Thats a tad under 30 an hour per man gross its weak there is room for improvement. We typicaly hit 75-90 and hour for a 2 man crew. It will take them some time to get use to being on their own often I find when I send out a crew they lose a ton of time to drive time since they take the long way not knowing all the short cuts.

dvmcmrhp52
08-25-2004, 11:14 PM
You're at $28.63/man hour.
That's on the low side and as well if you would lose the 18 mile one way drive on that one account your rate would go up.

ddthomas2
08-26-2004, 01:01 PM
17.5% for employee expenses would be low for Louisiana, cant say for sure in your state. I think workers comp is just under 13% for us, so I use an approximation of 25% overall to be safe.

I try to price at $60/hr per man, with drive time in our city, that currently is working out to $32/hr of actual gross income per hour paid. As you can see I need to focus on getting more accounts closer together.



Dennis

Fantasy Lawns
08-26-2004, 01:37 PM
I wish I could see 35% labor cost

In your boat your total labor cost vs hour comes out to $14.42 per hour .... I say a good hourly 'income" rate than would have to be around $43.26 per hour (3x hourly cost) granted this is a rough rule

But ya really gotta look at getting either those hours down fore that income or increase the hourly income for those hours

dkeisala
08-26-2004, 01:58 PM
I use CLIP - we are averaging between $35 to $39 per man hour which includes drive time. I like to keep labor cost to between 20% to 25% of gross revenue averaged over the year.

all degree
08-26-2004, 08:24 PM
Hey its a good start especially considering that you are not working. It seems to me that if you are that concerned with numbers you will def. improve. Keep putting the same thought into it.