Originally Posted by larryinalabama
Theres 14 to 16 yearolds on here all the time, sometimes I even learn from them.
Reality is for someone to pay employees 50k per year they would have to be able to produce 150k to 200k per year, And with taxes going up on 250K earners that number will likley go up.
For me solo is the only way to go.
A crew lead in the 40-50k range will manage somewhere between 3 and 6 employees on a job site (depending on what the job is, and ranging differently from job to job)
But the standard 3 man crew, in a regular season, should be producing 200k to 250k, with a possibly best at 300k (better if your season is longer, like atlanta etc)
So for starters, you would need to HAVE those sales. Most companies I see whining about not having good help are at the 600k-900k in sales mark. So that's usually not the issue.
if you are at the 250k-300k sales you are still in the do-it-yourselfer mom and pop range.
If you are trying to grow/expand and reach 600k, you are going to need the 40-50k guy. He could be like 36k ish at first and grow into the role as the sales built up. a good way to make that transition is through bonuses. Maybe his base pay is 27k and he gets another 10-15 when the work is completed on time and in budget.
The major issue with that however, is I have never seen a company under 600k in gross sales make good on the bonus idea. Because the funds are mismanaged, no matter how good their crew lead is, no matter if his individual jobs made the money, the company always squanders it, or comes up with excuses not to pay it. Then they piss off their lead, who will eventually leave, and they go RIGHT back to having people they can't trust running their jobs.
IF you can't justify the money for the employee, DON'T grow. Cap yourself at what you can handle. There is nothing wrong with being a mom and pop shop.
Many people find a way to grow through family, brothers, sisters, kids etc.
A multi generational family business can rake in the dough (if you have a dysfunctional family this probably won't work)
You still have to have SOME employees tho.
The best way to decide "what to pay your guys" is to sit down with them, send the time, to figure out, what does Jose need to make it through a year? How much does he NEED? Not how much does he want, so that new camaro will come into reality.
Depending on your demographics, I think you will find GOOD help will need 14-15$/hr. In most areas where you landscape, this will translate into around 20k ish a year.
That one employee will likely 'cost' you 26,000 per year.
But he produces around 1500 hours of work for the season which you should be billing out at $45-$70.hr (depending on the nature of your business, and what work it is)
So on the low end, his gross is a bit over $67,000, just in the labor you sold, not the material installed. Which would be separate.
IF he has a crew mate, and a lead man the crew will cost you around 100k ish in payroll and bill out over 200k in labor. (plus materials installed)
Last time I looked that's 50% gross margin.
Your overhead calculations will dictate what your hourly rate actually is, everyone is slightly different depending on their company.
But if you are into high end residential construction, and you have good sales and a good year that SAME crew can bill out at 337,500.00 for the year. But your overhead is likely going to be higher than the first example, so that doesn't exactly mean you make MORE money.
Employees aren't the enemy. It's your overhead. your cost of doing business. Most guys in the business have NO idea what their true overhead is, and NO Idea how to control it. they panic because they don't have money, and have no idea where it is going, and they try to keep the employee payroll down to compensate for the mismanaged business, which is causing the issue of "what can't I find good guys", When you can find the guys, you are making the problem worse, by having them not show, have crappy efficiency and not even complete the work you DO have sold for the year.
This all brings the company owner back the the point "I need better guys"
What's the definition of insanity?
Doing the same thing over and over and expecting different results.