01-02-2014, 05:38 PM
LawnSite Gold Member
Join Date: Feb 2011
Location: Long Island, NY
I do not 35 weeks for 40 hours a week. I was using figures to illustrate figuring costs.
Originally Posted by peeklandscaping
32vld, Question please. you said 'You work 40 hour week, for 35 weeks' does this mean for every piece of equipment it's 40 hours a week? Or do the hours per week vary for different equipment? Example, my truck would be 40 hours per week, 35 week per year, whereas a pole-saw would only be 1 or 2 hours per week, maybe 5 times per year. Just need some detail on that. Thanks for your help
One can go into as much depth in figuring costs as one wants or needed.
I do not need to figure out how much money I made using a pole saw. I know it saved me time. Faster then carrying and setting up, then climbing a ladder, and safer working on the ground then on a ladder. So I saved time which freed up more time to do more jobs. Not taking a ladder saved time not loading or unloading a ladder that day. No ladder, trailer load less so I saved fuel and wear and tear on the tow vehicle and trailer.
Normally I would not break out the cost of a chain saw, hedge trimmer, edger. I see how much they are used. And, I know that I made money with them. I know that I did enough work to pay back the cost of the chain saw. Though it may not of brought in a lot of work. It keep competitors off my customers property. So as you can see it is not always dollars and cents but dollars and sense.
I also will figure big ticket items such as trucks, mowers, trailers. Because if you need to make so much an hour to buy a $35,000 truck or $12,000 mower. You can not just take one weeks mowing's gross and go buy a major piece of equipment.
As a small semi solo operation running one truck. I will not do the math to figure out the individual hourly cost for a line trimmer, edger, hedge trimmer, stick edger, chain saw, back pack blower.
Example: that is 6 hand helds. Average price $400. Two will need to be replaced every year. Figure on buying three every year so I have a back up
for each one. Also having backups could have me set up to add a second truck. Planning ahead I could expand and hot have to come up with the cash or debt to grow.
That's a $1,200 a year cost. I would divide this by 1400 hours. You would get an hourly cost of $.86 hour.
Now being your started out and you only worked 400 hours the hourly cost would be $3.
When I did fall cleans up I know how much I spent on fuel, 2 stroke oil, leaf bags and total hours worked. I know how much I grossed per hour, labor costs per hour for help, and materials. I know how much it cost me per hour to do clean ups. Because of that I know my hourly profit to do this years clean ups. I was able to compare the hourly rate between different customers. I now know how to tweek my prices for next year to get the same hourly profit from each customer.
I do not know or care to know how many bags per job or gallons of fuel per job.
Now on a corporate scale of GM I would probably have to know the costs in greater detail. Though that size business will be able to afford the staff to collect and work those numbers.
I remember a story in school. Some industrial giant on the likes of a Rockefeller. Walking through his factory observing a worker dropping melted lead to seal a can. He asked the worker how many drops. The worker responded when it looks done.
"Rockefeller had his minion's find out exactly how many drops of lead where needed. He then had all the cans sealed with that exact number. It was on such a large scale that he saved a lot of money on material and time.
My scale of business wasting a dozen leaf bags. Spilling 8 oz of fuel. Are numbers to small to matter.
Though I want to know that if I used 10 boxes of leaf bags, 6 six packs of 2 stroke oil. That next year I will buy 10 boxes of bags and 6 six packs of oil because I do not want lose time, put on extra mileage to make multiple trips to buy supplies.