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Old 08-30-2012, 06:39 AM
Duekster Duekster is offline
LawnSite Fanatic
Join Date: Jan 2007
Location: DFW, TX
Posts: 7,969
It is very difficult to run full overhead recovery.

I do have my excel spread sheet set up

I have my large assets
Large Mower
All that is added up and divided by 10,000 hours or 5 years of use
I add a percentage for taxes, insurance and repairs plus inflation.

I do the same for small equipment but over 6,000 hours or 3 years.

This is simplified but you get the idea. It gives me a hourly cost.

I do a monthly cost for my shop, utilities, and various adminstrative cost.

I then project this cost over 12 month and divide by my mowing season... Residential is 9 months and commercial is 12 month. I then come up with an hourly cost.

I have my labor, I add burden to it. I then add all this up add my markup and I now have an hourly rate.

You have to build this rate for yourself with your cost. You also have to realize you will not be 100% productive so recapturing all the cost is hard.

Some times you do not get full rate on your jobs but some overhead recovery is better than none cause the cost do not stop kust because you do not have work.

For me, residential mowing does not really make a profit but it helps fill in holes in the schedule, it does pay for OH and as such it helps. Residental also generates other work that is profitable.
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