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View Full Version : Really knowing what it costs per hr. per employee?


Bunton Guy
12-10-2004, 04:06 PM
Have any of you guys figured what it costs you with insurance, benefits & taxes to have an employee per hour?? My current employee dosent get benefits just yet but I had heard from a past employer that I and everyone else there was costing him $37.50 per hour once all taxes & benefits were payed for each employee.

PMLAWN
12-10-2004, 04:25 PM
That seems high. I run about 30% ( no Health Ins.) Thats 30%on top of pay.
---$10.00 pay = $13.00 to me

mmacsek
12-10-2004, 04:31 PM
I figure about 35 to 40 % on top of the wages. No benefits. That includes workman's comp. , taxes and payroll service. Matt

Fantasy Lawns
12-10-2004, 04:45 PM
WOW $37.50 per Hour .... that would put me out of business

My hourlies cost me $13.60 per hour with taxes n W/C

YardPro
12-10-2004, 06:55 PM
that seems too high to me as well.
WE ARE OVERHEAD HEAVY and ours is only $20.00

specialtylc
12-10-2004, 07:08 PM
My costs are. L&I insurance $1.10 per hour. S.S. 8% of dollar per hour, or at $10 per hour thats 80 cents. These are the major ones. We also have to buy some safety supplies for them. Such as ear plugs, glasses, and sometimes gloves.I also supply asprin, bandaids, etc.

baddboygeorge
12-10-2004, 07:11 PM
thats why my employees are considered contract labor !!pay em cash an 1099 em

YardPro
12-10-2004, 07:13 PM
earplugh, gloves, glasses should be insignificant. Thay should be what , $10.00 for 100 hrs ??
if they loose them they buy them....
so on a $10/hr man you're showing mabey $2.00/hr.

so where isthe other $25.00 /hr?

mbella
12-10-2004, 08:46 PM
thats why my employees are considered contract labor !!pay em cash an 1099 em
Can you explain. Thanks

K.Carothers
12-10-2004, 08:58 PM
thats why my employees are considered contract labor !!pay em cash an 1099 em

That is illegal. They are not employees if you are 1099 them. You are treading on thin ice brother.

Bunton Guy
12-11-2004, 12:43 PM
I was hoping that he was wrong when he told me that 37.50 figure.

Lawnworks
12-11-2004, 02:55 PM
That is illegal. They are not employees if you are 1099 them. You are treading on thin ice brother.

What would the penalties be? What do you think the chances are that the IRS would investigate on a small business?

Richard Martin
12-11-2004, 03:15 PM
What would the penalties be? What do you think the chances are that the IRS would investigate on a small business?

Seeing as how they will literally goes to the ends of the earth to investigate an individual then I would think that they would absolutely investigate a small business if given a tip by a disgruntled former employee.

The DOL just finished prosecuting a gas station owner not 3 miles from my house. A disgruntled former employee called them and said that he/she didn't get paid overtime correctly. When the DOL investigator showed up at the station to check out the claims the station owner got all ignorant with the investigator and pushed her back out the door of the service station.

Not only did the station owner have to pay back overtime and fines but now he also has a record for assault.

I'll give you 3 guesses who the next people to visit the gas station are and the first 2 guesses don't count.

Fantasy Lawns
12-11-2004, 03:40 PM
It only takes one pissed off employee to drop a dime or 1 accident .... beyond the tax penalties ..... insurance issues (if they are 1099 they are not covered under one's policy) there are soo many other issues ..... ie failure to have correct I-9 paperwork can be a $5k per employee alone

YardPro
12-11-2004, 04:10 PM
What would the penalties be? What do you think the chances are that the IRS would investigate on a small business?


chances are pretty good

all it takes is for one guy that works or has EVER worked for you to not file or get cuaght cheating. whey will then make you pay all the taxes, his share and yours plus penalites (which can be many times the amount of the tax).
it has happened to several people here. it's not pretty.

the other problem is that it is a disservice to the employee.
they end up paying more taxes than they would if you withheld and matched.

do you carry workmans comp on them? etc..

Lawnworks
12-14-2004, 07:26 AM
My costs on a $10 an hour employee are about $3 give or take. How does yours get up to $20? Is that including your other costs like equipment, gas, etc?

YardPro
12-14-2004, 08:13 AM
you have to figure in all the fuel, shop expenses, accounting expenses, EVERYTHING.

every dime it takes to run your business has to be figured in the hourly rate.

also you have to figure in the non billable time.

if you have 10 hours per man per week in non billable time ( loading and unloading, fuel stops, blade sharpening, etc. and your man makes $10/hr, then you add $100/week to the overhead recovery.

Lawnworks
12-14-2004, 10:19 PM
Alright, so in my case in a 3 man crew after all labor, gas, equipment, insurance, etc divide it by 3 and that is your cost per man hour, right? It seems to me the competitive man hour rate around here is $25 on big properties.

YardPro
12-15-2004, 06:54 AM
yes
we also add in our non billable time.
we spend alot of time servicing our equipment. we sharpen blades and clean the bottom of the decks twice per week. that, and fuel stops, and the allowed two convenience store stops add up to about 25-30 hrs/week of non billable time with a crew of 3.
we take this amount ( salaries, plus all insurance, etc.) and figure that in to our recovery rate.
as far as our big properties we are about $28.00/hr on the 1500 hr/year property .

therainman
12-15-2004, 01:22 PM
anyone who thinks they can operate at $13.00 is sadly, slowly going broke. People who do not know what it cost them to operate have no way to know what they need to bring in to turn a profit. How can you understand what you need to charge if you dont know how much it will cost you to do the job? You need to take a long hard look at a few more key items. Equipment, fuel, parts everything right down to the staples and the stamps that go on your statements. I am no longer in the biz( i sold my company last spring) but when I was, a $12/hr employee cost me at least 22.80/hr to put on the road. That is my best effort to figure my cost. I was pretty sure however that I was still a little too low. Once you take the time to figure cost you need to plan for future growth and company investments. Then you can determine what your hourly rate really shgould be.


good luck

Ecobjs
12-15-2004, 01:49 PM
We have a detailed formula that we use, I believe you need a detailed formula if you use several crews or you could get hit in a bad way somewhere down the road. And I figure if you only have 1 employee you might as well get into good habits now.

Our formula involves several aspects. I will try to be clear, but its hard to write out in Paragraph form, so please be forgiving. For example: A $10 an hr employee cost us an additional 30% in ssn, liability ins, and workers comp, so that is an extra $3. We also factor in what overhead cost us per hour (rent, inoffice staff, phones, etc.). so if this overhead is $100,000 for the year and we plan to work 15000 man hours in the field (this is an estimate based on each Employee workng approximately 1800 hrs a year) then 100,000 divided by 15,000 hrs gives an additional add on expense to the employee of $6.66. Then we have to factor in equipment cost. So if an employee operates a large riding mower we figure that mower cost $4.55 an hour to run (other formula, but basically it is expense of mower divided be life of mower).
So for that $10 an hour Employee we need to get 10+3+6.66+4.55 = 24.21 an hour plus what ever profit we want to make on that employee. We want an extra $10-20 an hour depending on the type of work.

Clear as mud??? I will be happy to discuss further if anyone has questions.

mmacsek
12-15-2004, 05:01 PM
The original thread only asked what does it cost for taxes, insurance, and wages. The overall cost has to be more than $13.00 or ,like you said, you're digging your own hole. Matt

Landscare
12-15-2004, 05:14 PM
I agree with Ecobjs the cost is not just insurance,taxes, workers comp etc...
It also has to do with your equipment cost, overhead, and PROFIT... A lot of people think that just because they are covering there employees cost that they are making money, but the truth is if you dont figure the profit in then your basicly working to cover cost. I recently went through this whole process. You also have to realize there are certian cost that dont go up so the more employees you have the cost per employee actually goes down.

I would be happy to answer any questions you have on this, Like I said I did this whole process about a year ago with a business advisor that I hired.

Justin

YardPro
12-15-2004, 05:16 PM
the rainman and ecobjs are dead on.
when your business is small it is not as critical that you know your exact operating costs, but as you grow and start bidding on work it is crucial. either you will bid too high and not get the work or you will bid to low and loose your shirt.

the larger the job, generally the smaller the margins, and the less margin for error.

A lot of the reasons that the big companies can work for less than the average operator is that they have better formulas for thier operating costs. They can have thinner margins and do more volume and be successful.

The only way to determine these costs is to keep very detailed records. The longer you are in business the better you should know from year to year what it costs to operate.

Lawnworks
12-15-2004, 09:40 PM
Alright, what is your formula for getting a daily cost rate on a riding mower? I have noticed some big companies around here do 10+ acre jobs w/ walk-behinds. Cheaper to operate? What are some ways to really cut costs?

therainman
12-16-2004, 10:07 PM
cutting costs may not be the real answer to greater profits.
The easier way to boost profit is to become moe efficient with what your time. More efficiency means more work can be done in the same time with the same money.
Start with somthing as simple as blade changing and re-fueling. If your employees are doing this, make it an end of the day activity. At the end of the day when it is time to gho home it will take as much as 50% less time to perform. Have your own fuel tanks, avoid the gas station at all costs. The gs is really good for just another long conversation with someone they see walking in or out. Look at how your route is layed out, try to minimize travel time. mowing is what makes you money, the more hrs of an 8 hr dy you are mowin the more money you are making.


shawn

Ecobjs
12-17-2004, 10:19 AM
Lawnworks,
for us to get the hourly cost of each piece of equipment we factor the following: purchase price of item, including finance charges and taxes, the annual cost for upkeep on the item (new belts, fuel filters, etc.), the cost of oil and fuel to run the equipment (right now we are more quessing this than being specific). We total all this and then we estimate how many hours we can run the machine (without a major overhaul), and divide. For instances: Walk behinds cost less, less costly to run, but don't last as long. You can order some pretty good books breaking this down, but you will still need to figure your own actual cost. For instances, my guys run equipment pretty hard so my numbers might be higher than yours.

YardPro
12-17-2004, 01:10 PM
the reason you probably see companies mowing large places with smaller machines, is that if they are having to outfit many crews, the savings on WB's are substaintal. also they are easier to transport and more fuel efficient.

the other thing is that they may not have enough large properties to justify a large mower.

Lawnworks
12-18-2004, 06:12 AM
Ecobjs.
In your formula you added that mower cost to your hourly cost. On a crew of three, shouldn't the mower cost be divided by three? Or really the whole crew equipment should be added up then divided by three, right? I understand being more efficient lowers costs, but also not having 50k trucks would lower costs as well. It seems that also if you find the longest lasting equipment, you will be more profitable in the end.

YardPro
12-18-2004, 07:54 AM
the mower would be added to the employee using it. the equipment that the others use would be added to thier costs. it doesn't really matter if you're figuring it as a total crew cost for a property.

Lawnworks
12-19-2004, 02:40 AM
Well I was just thinking having an average operating cost would be ideal, but I guess the more detailed the better.

Soupy
12-19-2004, 04:03 AM
Knowing your numbers is important. But if you really want to get technical you should have separate cost for each item being billed out. Lets say an employee cost $14hr, Take your fixed expense and divide that into last years billable hours to get the hourly cost for fixed overhead. You can also use last years #'s to figure how much non-fixed expenses (ie, office supplies etc.)cost you and divide that by last years billable hours. Then you add what you want to make off of him and that gives you his hourly rate. Then you take each piece of equipment and divide total cost per item + maintenance + fuel and break that down to an hourly cost. Now when you bid on a job, you figure how long the total job will take. Also figure how long each equipment will be used. Add all those cost together to come up with a figure. It is always good to add a % for cushion.

This way you will have different hourly charge/cost per service. I would suggest adding PITA fees for undesirable jobs too. Sometimes the cheaper task can be billed a higher rate just because no one wants or knows how to do them. Also items that don't get used much should be billed more because chances are they will depreciate faster by age then use.

With all that said. I don't believe in billing per hour for services. Instead bill each service by supply and demand (that is a whole other thread). Use your expense chart to make sure you can profit by these demands. If not then you are in trouble.

Ecobjs
12-19-2004, 09:21 AM
Yardpro and Soupy's method are right on. I have seen the calculations done several ways, at the end several are correct. If you want to figure equipment per crew or per man or per job, I think any would be better than not figureing it in at all---that is the way companies go out of business. To answer your questions, Yes, the longer the equipment last the less it will cost you (figuring equal priced machines, same maint. cost. etc.) Therefor we track each type of equipment and what it cost us a year to maint. For instances, we have Ford trucks and Dodges. We track monthly payment, oil changes, filters, new tires, how many miles a year and type of jobs. I then look back at year end and figure wht type of truck is better in the end for us (also which drivers!!)(FYI I personally could care less about the Ford Chevy, Dodge argument about which one is best, I just want to build a company and make money. I have Ford and Dodges because of dealer support near the shop). Anyway, these figures let me know what I want to buy in the future. We do this with mowers and trimmers, etc.

YardPro
12-19-2004, 09:39 AM
good point about the equipment tracking.
we do the same
i have no brand loyaly. i want the best performing, longest lasting piece of equipment i can get. cuase the one that best fills out those criteria will make the most money.

i would also like to again stress one more issue. Soupy mentioned it also.

Most people i talk with don't know thier number of non billable hours per year.
This is very important, as payroll will be your single largest expense.
If your employee has 25% of his time as non billable ( can actually be more with fuel and convenience store stops, loading equipment, and travel time, etc.
then it can kill your profit margin.

We do as soupy does. we look at billed hours from previous years.

here's an example of how much it can affect your bottom line.

$10.00/hr employee= $13.00/hr with taxes, insurance etc.

if you are billing him out at $30.00/hr and are thinking that every hour is billed then you're expecting $60,000./year. subtract his pay and that leaves you with
$34,000.00 year markup. before all other overhead expenses.

$34K- $10,000.oo per year for truck fuel , shop, etc. = $24K/year

now figure in the non billable time

1500hrs X $30.00/hr = $45000.00/year. -$26K (his pay) = $19K/year
$19K - $10K (same truck etc overhead. it will not change) = $9K

big difference $25K expected and $9K brought in. more than a 25% difference in the end. that's how non billable hours kill a company.
can you afford to bring in less than half of what you expect from an employee????

Soupy
12-19-2004, 10:08 AM
There are variables to look at when hiring an employee and figuring cost. If the objective is to start a new crew then you have to figure all the expenses. But if you already have a crew (solo counts as a crew) and you are wanting to add an employee to operate the trimmer etc. Then all you are adding to your overall cost is $13 per hour. To break even this means you have to add $520 in new sales and perform all work in the same amount of time as you are working now. In reality you should be able to add $850 in new sales which means you are working the same hours but grossing an extra $300 a week off that employee.

The above scenario is just a rough estimate of how a solo operator can add an employee. But I think it answers the original question. Anyone that has already made the move of hiring should know what it takes to expand.

Mclaughld
02-17-2005, 04:47 PM
Thank you, Soupy, YardPro and Ecobjs.

This is really great advice. Its shows the difference between people who just create themselves a job and those who create themselves a business. Nobody mentioned it but advertising would go into this hourly rate as well.

The non billable time is a good point. Have you considered going to Costco(warehouse grocery store) and buying a few cases of water bottles and Gatorade. Keep them cold and have your guys grab a few every morning before they go out. This way they wont need to stop for drinks. Then schedule your driver to leave the other guys working at a job while he goes to fuel up. This could be a way to cut down hourly cost.

Mack
02-17-2005, 05:26 PM
Is it not true that you can not make a employee a sub contractor if this person is using your equipment and driving your trucks. just asking

Mark McC
02-17-2005, 05:33 PM
I can see the advantage of figuring in all costs to the number of employee hours as a way of making certain you're charging enough, but that's a bit tricky without experience.

I'm looking to pull in enough customers to need one full-time employee and anticipate that I'll have to pay him 10 bucks an hour. My first guess was that it would cost me $500 a week for wages, insurance and all the other stuff. Some here are proposing the number is more like $13 an hour, or $520 a week.

That number doesn't blow my business plan out of the water, but it does shave it a little. The flip side of this equation is that I don't think I can do a decent job of extrapolating all costs to employee time until I have a year's worth of figures in hand from a two-person operation.

At that point, yeah, I can come up with numbers, but until then, I'm relying on my sense of what the market will bear (I'm not trying to be the king of low-cost LCOs, but I'm not shooting for Cadillac costs, either) and concentrating my business in a small geographic area.

I screwed myself up royally last year with WAY too much windshield. Never again. I guess my message here is that if you can keep your route tight and understand the market forces you're dealing with, all you really have to do is control costs and keep from spending work time at the gas pump.

By the way, my employees will not do daily maintenance until I have at least two. I can see hiring someone to come out on Saturday and handle the weekly routine a lot sooner than paying the crew to handle daily maintenance. It just doesn't take that long if you're set up properly and my notions of a production schedule/reasonable overtime pay simply won't allow it.

steve122
02-17-2005, 06:27 PM
Great thread! lots of good advice, this is one thread all newcomers to the business should be directed too.

YardPro
02-17-2005, 06:36 PM
What would the penalties be? What do you think the chances are that the IRS would investigate on a small business?

all it takes is for one of them to not file and get cuaght.
it's happening to a LARGE company here. he's been paying 1099 for overtime. A fellow we just hired called the labor board and they are not starting an investigation. the former employer is getting ready to get burned.

he called becuase he found out that instead of getting money back like he expected, he owed money.

gogetter
02-17-2005, 07:07 PM
Is it not true that you can not make a employee a sub contractor if this person is using your equipment and driving your trucks. just asking

That's a double negative there guy :dizzy: :)

If I understand your question correctly, you cannot call someone a
"sub-contractor" if they are using your equipment and truck. They are an employee then.

OnMyOwn
02-17-2005, 08:48 PM
Clarification is the most important issue relating to loaded costs. If you are looking for loaded employee wages, that is rather simple. Take your hourly rate (x) 7.65% FICA (+) FUTA and SUTA relating to early proportional payroll. Your WC is a function of aniticpated payroll dollars and can be spread over anticpated hours worked. Your G/L is becoming a function of payroll, but is usually based on fixed factors. This can be divided equally among employee / working owner hours. Benefits such as health ins., vacation, uniforms, cell phones, etc. can be added in to cover some of the overhead.

If you are looking at breakeven, you need to add in the rent, eqpt. purchases and depreciatiable life, repairs, acctg. overhead and everything else.

Hope this helps.

clncut
02-17-2005, 08:51 PM
So for that $10 an hour Employee we need to get 10+3+6.66+4.55 = 24.21 an hour plus what ever profit we want to make on that employee. We want an extra $10-20 an hour depending on the type of work.

Lets just say after you add in your profit for that employee you get $30.00 So you have you and your employee working. What do you charge /hr for yourself. Would you also use the 30.00 you figured for your employee so your new wage would be 60.00/hr? Thanks for your help. Im currently in this situation of bringing on a helper and could really use some advice.

Mclaughld
02-17-2005, 09:14 PM
Lets just say after you add in your profit for that employee you get $30.00 So you have you and your employee working. What do you charge /hr for yourself. Would you also use the 30.00 you figured for your employee so your new wage would be 60.00/hr? Thanks for your help. Im currently in this situation of bringing on a helper and could really use some advice.

You have to think what your willing to work for per hour. If your willing to work for $10 an hour, then sure. But as the supervisor, you should be getting at least $15. When working out your cost, i dont think you should add the profit margin to your own hours. Think more of hourly pay. That might mean you need to pay yourself $25/hour.

You add a profit margin to your employees cost because otherwise you wouldnt make any money off his labor, just breaking even. For yourself, your hourly pay is already worked in.

Hope that makes sense.

clncut
02-18-2005, 09:58 AM
yes it does and thank you for your advise. Anyone else care to chime in?

oldturf
02-18-2005, 12:16 PM
I had a thread not to long ago about THE COST OF DOING BUSINESS and tried to explain ,in brief,what is necessary to figure your cost. A $10.00 an hour man using a ZTR or other expensive piece of equipment with taxes,insurance,transportation dead time,etc. is going to cost you a minimum of $30.00 an hour. I read post from idoits saying they will set the world on fire mowing yards at $15.00 and others making $500.00 per week per man charging $15.00 an hour. Well these people must be high school drop outs and have never suceeded in learning how to even add. Take the time, add it up people it is not rocket science. Low ballers are hurting everyone by setting a low standard. It is true that these people do not last long but the supply of them seems to be endless.

BULLGRAZER
02-18-2005, 12:31 PM
Attached is one zip file of two documents that hopefully will provide 'food for thought' and assistance regarding employee cost/expenses (excell workseet that you can plug numbers/info and it will calculate - also can be modified for your specific needs/ratios) AND IRS Section 1709 FACTS about Sub-Contractors (Adobe pdf).

-=KC=-
BULLGRAZER

Mark McC
02-18-2005, 12:40 PM
I had a thread not to long ago about THE COST OF DOING BUSINESS and tried to explain ,in brief,what is necessary to figure your cost. A $10.00 an hour man using a ZTR or other expensive piece of equipment with taxes,insurance,transportation dead time,etc. is going to cost you a minimum of $30.00 an hour. I read post from idoits saying they will set the world on fire mowing yards at $15.00 and others making $500.00 per week per man charging $15.00 an hour. Well these people must be high school drop outs and have never suceeded in learning how to even add. Take the time, add it up people it is not rocket science. Low ballers are hurting everyone by setting a low standard. It is true that these people do not last long but the supply of them seems to be endless.

Your figure of $30/hour to have an employee comes out to $48,000 a year for a 40-hour week and a 40-week year. Assuming each employee is productive for 330 minutes a day (I know windshield time varies, but around here, I have to expect 2.5 hours a day behind the wheel 'cause traffic is miserable), I have about 66,000 minutes a year. To cover the cost of having him on board, I have to get 61 cents a minute for each minute he's working.

My projections of 85 cents a minute per employee (for one employee) will cover that. It would leave me with a profit of $15,840 a year for that employee. If I can do that with additional employees (most will argue that each additional input will yield less return), a two-man truck will give me about $31,680 a year of pre-tax income.

Does that sound right to you?

rodfather
02-18-2005, 01:09 PM
Good calculations Mark.

oldturf
02-18-2005, 01:31 PM
Your figure of $30/hour to have an employee comes out to $48,000 a year for a 40-hour week and a 40-week year. Assuming each employee is productive for 330 minutes a day (I know windshield time varies, but around here, I have to expect 2.5 hours a day behind the wheel 'cause traffic is miserable), I have about 66,000 minutes a year. To cover the cost of having him on board, I have to get 61 cents a minute for each minute he's working.

My projections of 85 cents a minute per employee (for one employee) will cover that. It would leave me with a profit of $15,840 a year for that employee. If I can do that with additional employees (most will argue that each additional input will yield less return), a two-man truck will give me about $31,680 a year of pre-tax income.

Does that sound right to you?
In an ideal world your figures would work out, but if the two man crews are sent out independently, without your supervision, then it has been my experience that the productivity will drop approx. 30% . It is true that each added employee will yield less return, but each new employ also multiplies yourself and that is the way to make money.

I see that you are able to charge $51.00 per hour in your area, while around here it is tough to get more than $45.00 per hour. I run one 4 man crew at present, but my customer base is mostly large commercial accounts and I find that everything goes better when I am around. I would like to, and have been planning on sending out another crew but finding a good crew leader is tough.

Continue to track you cost and your dead time, windshield time, and you can refine your cost more each year,

By the way, I would like to apologize for my rather negative comments on my previous post today, but its been a bad day and I should not vent on this forum, too much of that already.

Have a good day.

Mark McC
02-18-2005, 01:37 PM
In an ideal world your figures would work out, but if the two man crews are sent out independently, without your supervision, then it has been my experience that the productivity will drop approx. 30%.

Funny you should say that.

http://www.lawnsite.com/showthread.php?t=96154

oldturf
02-18-2005, 01:52 PM
Mark;
Looks like we are on the same page on this one.

rodfather
02-18-2005, 02:28 PM
In an ideal world your figures would work out, but if the two man crews are sent out independently, without your supervision, then it has been my experience that the productivity will drop approx. 30% . It is true that each added employee will yield less return, but each new employ also multiplies yourself and that is the way to make money.

Yes and no. Remember too as you add employees, some of your fixed expenses now will be covered with more employees thus adding to your profit margin and ROI as I see it.

Mark McC
02-18-2005, 02:36 PM
Yes and no. Remember too as you add employees, some of your fixed expenses now will be covered with more employees thus adding to your profit margin and ROI as I see it.

Had a hunch that some of the fixed overhead would at least help make up for the lower productivity. Another benefit would be that you don't need a separate stock of back-up equipment for each rig. Now, if I could just afford a gas station franchise.

rodfather
02-18-2005, 02:39 PM
Now, if I could just afford a gas station franchise.

Add in a convenience store and you're all set Mark. Wait a minute, you can't cause you're Irish and not I***** LOL

Mark McC
02-18-2005, 02:50 PM
Add in a convenience store and you're all set Mark. Wait a minute, you can't cause you're Irish and not I***** LOL

Yyyyyyyyyyyyyyyyow. Not very PC there, Mr. Rodfather! :rolleyes: Funny thing about the Irish thing is that when my dad was in AA, most of the guys with him were also micks...one Italian guy, but otherwise a bunch of Hibernians. Talk about running true to type. Back then, I really worried about that... :help: .

But you know, I hear there's a lot of jack in the convenience store business if you have the right location. The only problem I have with it is that I'm just not fond of derelicts with busted-up pistols who want a "contribution" to the cause. Call me a tightwad, that's just me!

oldturf
02-18-2005, 03:32 PM
True, some of your fixed cost do get divided by more people, but for the most part that offsets very little. Some employees can cost you. I even had one FEMALE crew leader that was stealing customers and mowing them on the side, with my own equipment. You must have hour meters on everything and moniter them daily. A good foreman and crew leaders are a must with multiple crews.

ooo
03-09-2005, 04:11 PM
I made an Excel document how I figure out per man hour costs. It may need a little adjusting for your needs, but it gives you an idea.

These figures sound about right?

bigviclbi
03-11-2005, 08:20 PM
Guys to reiterate: For every hundred dollars paid to your employee you owe $30 in workmans comp, state and federal unemployment? This thread is great, I don't fully comprehend everything, this year I will have emplyees on the book and I really appreciate this info. This is why i love Lawnsite, not so much for "you're a scrub, etc" but I can now understand how much you guys that give ins. etc. have to pay. This is will be my third year and (cross my fingers) things are looking good. Now I need to start crunching my numbers, I have been laxadaisical about this so far.

mottster
03-11-2005, 11:43 PM
the way our mind is set is that our full-time employees cost us twice what they make by the time we factor in health, auto insurance as well as liability and costs of DOT, pesticide licensing. Part-time employees are more like 150% their hourly pay.

Soupy
03-12-2005, 12:04 AM
Guys to reiterate: For every hundred dollars paid to your employee you owe $30 in workmans comp, state and federal unemployment? This thread is great, I don't fully comprehend everything, this year I will have emplyees on the book and I really appreciate this info. This is why i love Lawnsite, not so much for "you're a scrub, etc" but I can now understand how much you guys that give ins. etc. have to pay. This is will be my third year and (cross my fingers) things are looking good. Now I need to start crunching my numbers, I have been laxadaisical about this so far.

For me is it just under $20. It all depends on your WC rate etc.

old dog
03-12-2005, 02:29 AM
thats why my employees are considered contract labor !!pay em cash an 1099 em
BE REAL CAREFUL-uncle Sam might come a knockin :nono:

old dog
03-12-2005, 02:38 AM
the rainman and ecobjs are dead on.
when your business is small it is not as critical that you know your exact operating costs, but as you grow and start bidding on work it is crucial. either you will bid too high and not get the work or you will bid to low and loose your shirt.

the larger the job, generally the smaller the margins, and the less margin for error.

A lot of the reasons that the big companies can work for less than the average operator is that they have better formulas for thier operating costs. They can have thinner margins and do more volume and be successful.

The only way to determine these costs is to keep very detailed records. The longer you are in business the better you should know from year to year what it costs to operate.

If you have 1000 employees working you do not need much hourly profit on
each employee to make out well.If you have two employees you need to make
considerably more profit per hour to make it worth doing.As previously stated
in a big company,with razor thin margins,your accounting had better be flawless,or it is just another statistic!

old dog
03-12-2005, 02:48 AM
Is it not true that you can not make a employee a sub contractor if this person is using your equipment and driving your trucks. just asking
Absolutely-if you set his schedule and supply his equipment,he is an employee,
ne matter what you think!So what are some wc rates.I have unemployment comp which is 10.2 % of the first $8,000 of each employee.How does that
compare to some others?

PMLAWN
03-12-2005, 07:14 AM
I split out the crews for WC, Maintenance guys are only 3.8%, yet irrigation runs 7.6%. I know that my handyman guys are higher too but not sure off hand how much. I think 7-8 also.
I pick a target # and pay for that---Maintenance I guess around 100K so I pay at the rate of $3800.00 for that group. This is based on their gross pay.