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Old 08-11-2013, 07:48 PM
32vld 32vld is offline
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Join Date: Feb 2011
Location: Long Island, NY
Posts: 3,976
Originally Posted by dllawson View Post
When you first start trying to calculate a budget it is easy to get overwhelmed with the small details. It is often better to start with big easy numbers and then work to smaller more detailed numbers as you have the time or the interest.

There is a very simple way to start calculating your cost per hour to operate. Add up all of your expenses for the past 3 months. Dividing that number by 3 will give your average monthly expenses. Divide that number by the number of days a month you plan on working. (I use 20 for budgeting, but it would be more if you work Saturdays.) This will give your average daily expenses. Finally divide that number by the number of hours you plan on billing each day. This will give you an average cost per hour to operate.

Example: Expenses: April - $2000, May - $2800, June - $2400.
Total expenses = $7200. $7200 / 3 months = $2400 a month in expenses.
$2400 / 20 working days = $120 a day in expenses
$120 / 6 billable hours = $20 an hour in expenses

I understand this is an overly simplistic approach to budgeting, and I am only suggesting it as a starting point. However, it is fairly accurate and can be calculated in about 5 minutes so that you can start using it on your next bid.
Great advice. Trying to figure in every small cost when you have know idea how much 2 stroke oil, you will go through, or line, or edger blades in a season is a total guess that you hope you will not be that off. Bad to think you were making money and find out you broke even due to under estimating one's costs.
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