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  #1  
Old 07-03-2012, 09:16 AM
RBatten RBatten is offline
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Maintenance Labor %

I have looked far and wide for an average labor cost %. I know here in FL we earn our money in the summer and make our money in the winter so I was wondering what kind of labor % I should be shooting for in the summer and winter months.

I want my labor costs as low as possible but I can't see running 30% labor in the summer months. You end up working the guys like dogs and most will tire and quite. Then it cost more money to hire and train new ones.

We had a great spring with lots of projects and design install work, but now that summer is here, the projects have dried up and my labor costs are rising fast.

If you are willing to share you numbers with the group I'm sure that we can all improve our businesses. I don't go out and mow yards myself. I do have to help sometimes when things get really backed up, but as a general rule I don't spend time on the truck. So all the solo guys or owner operators out there, calculate an hourly rate or salary for yourself that meets industry norms and let us know what kind of % rate you get.

Right now I'm basing my rate on Maintenance work ONLY, and I'm coming up with between 35-45% depending on the week. Lots of rain, labor goes up. Hot and dry, labor goes down. I want my business to be profitable on Maintenance work alone so that all the extra stuff, mulch, sod, and misc plantings is all gravy and increases my profits. I don't want to depend on the project work to make a profit.

There you have it. Lets see your numbers!

Thanks for all your help. Have a great 4th!!
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  #2  
Old 07-03-2012, 05:52 PM
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jvanvliet jvanvliet is offline
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I know what my daily & hourly nut is during season; I use the same numbers off season.
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  #3  
Old 07-03-2012, 09:44 PM
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Landscape Poet Landscape Poet is online now
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I can not help you with the crews but will share my info in hopes of at least giving you some possible help.

I am solo with a assistant. My payroll runs me about 14% on the maintenance portion of things. This does NOT include my salary of course but rather just my payroll being paid to my employee.

So in theory, if I added another employee to take my place I would be running in the 28% to 30% range assuming that production would stay at the same pace.

It should be noted too that I generally pay my employee for a full 40 even during the winter months for scheduled weeks even if we do work a full week as I figure he has expenses he needs to cover too and keeping him satisfied is in my best interest.

I think you have the right idea in making sure your maint side controls your income you rely on, sod, installs etc are then just gravy as you said. This is the way I have always done it and it works for me.

Hope that helps,

Mike
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  #4  
Old 07-03-2012, 09:51 PM
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Patriot Services Patriot Services is offline
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Bear in mind most medium/large operations layoff the majority of their staff come winter. Seasoned guys understand this and don't mind working like dogs in the season knowing they will get a 2~3 month layoff in winter.
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  #5  
Old 07-04-2012, 08:16 AM
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jvanvliet jvanvliet is offline
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Labor is my single biggest expense, followed by fuel, fleet maintenance and repairs. I don't know how you can possibly cut labor to as low as 14%. My labor cost lock stock and barrel (taxes, insurance, etc) is about 47% during season and about 30% off season (off season we furlough 30% of our crew).
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Old 07-04-2012, 08:36 PM
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Quote:
Originally Posted by jvanvliet View Post
Labor is my single biggest expense, followed by fuel, fleet maintenance and repairs. I don't know how you can possibly cut labor to as low as 14%. My labor cost lock stock and barrel (taxes, insurance, etc) is about 47% during season and about 30% off season (off season we furlough 30% of our crew).

I am able to reach 14% with ease and could make it lower if I did not pay my guy for a full 40 during the on weeks during winter. If I was a real prick I could send him packing during the winter months all together and call it good and either re-hire him or another as spring approaches and bring my profits up.

My lower % comes from as stated not including my labor in that too in case you missed that part, the rest is just volume as we are a two man crew handling roughly 28-30 residential lawns each day. Most of our properties are newer (within 7 years or so old) so the landscape is not mature which requires less input on our part too. I do not chase shrubs etc just for the hell of it either. Most guys that I know will include shrub trimming etc for a extra $20 or $30. That simply does not make sense to me when I can go two houses down and mow their lawn and not spend near the time and make twice as much gross. It simply does not make sense to me and my business model. The same holds true for high detail properties....do we still have some..yes but I can assure you that those are not as profitable in this market as they should be in comparison to just straight mow, trim, edge, blow properties. There is a line of diminishing returns in the current market. Everyone is willing to give the customer extra for just a little more. I don't see it that way. You want your shrubs trimmed and you have a house surrounded by viburnum - that is fine, but it will cost you, because the time I spend jacking around with your viburnum every month - I can go mow two of your neighbors 3K of turf properties, edge them, trim them, and blow them off. This is were I differ from many - I do not let my ego get in the way and only insist on doing the nicest properties with customer who want everything perfect....I like the upper middle to middle class person who works 60 hours a week, does not have a detailed landscape that consumes time each month and just simply wants someone reliable to care for the lawn, not scalp the piss out of it, not be consistent with the days they are mowed, will leave them a note in the mailbox or drop them a email if the lawn is too dry or if webworms or any of our other lovely pest we have down here are currently attacking their lawn. I want that guy because he is happy to pay a reasonable amount just to have that done and not have to worry about it after working all week. He/She holds a well paying enough position at their employment that they are not cheap asses and will pay through the winter because they appreciate the fact that business is business. Those are my kind of people that allow me to run a 14% payroll with ease. Everyone else can have the Mc Mansions with the prices they are getting on them in the current market.

As Diamond pointed out - I am not required to pay WC because of my size so that does not figure in to my payroll either.

I think that the problem that the OP is facing is just what many lawn guys face, they want to be big, they want to have it all. That is ego getting the best of you if you are not in the position to correctly grow like that. The simple step of adding another truck and trailer is one that I am struggling with right now. That is extra money in fuel, extra money for the truck, extra money for insurance, extra money for maintenance upkeep of equipment etc etc after the initial outlay of cash to equip the trailer you have to purchase so that it ready for business.

Like the OP stated, he has the ability to take on a extra 5-7K in accounts right now...my question would be why is he already there? You know Jvan and so should any one else that has been in business for awhile...Payroll is your largest expense....why would you keep that many people employed if you did not have the need for them. Why would you have that much equipment at the ready?

My plan instead of being ready for today for what might happen tomorrow. Swamp myself with so much work that it is hard for us to keep up, which is where we are at. Before I buy another mower, truck, trailer, set of sticks, insurance for it all...myself and my guy will work OT. Why pay OT? Because it is sure as hell a better return on my investment that having equipment sitting around not bring me home money.

Many of you have asked why do you sub your sod etc out. Because my ego does not get in the damn way of my pocket book, that is why. I make a very very nice profit on sod each year for essentially taking sales calls, spending some time with the customers, asking silly questions like why are we replacing sod? The generally don't know - or their pest control company let it happen or their lawn guy did not let them know anything was wrong or that he took out 3 sprinkler heads on a visit but did not bother to tell them. I take that little time, figure out why the sod went bad - sell it, have a good close rate on selling my maint. service while discussing this, and oh yeah, then I sell them the PCO part too. Then I collect my check for the sod from them, collect my check for lawn maintenance , check my collect for the PCO part and guess what...all I did was the lawn maintenance. I do not let my ego get the way of my wallet. Too many lawn turds want to do everything themselves, they want to be the biggest and baddest and fail because they are overstaffed,, try to grow to fast, want to have the nicest trucks and nicest accounts, that is why I am able to keep my payroll low - I simply do not do that. I grow slow and steady taking on work that is profitable and which allows me volume. In this business just like every other there is a law of diminishing returns ..the trick IMHO is to figure where you can make money and laugh your ass off a the guys that think you are as good of a businessman as them because you do not have the brand new f-350 or the most tricked out trailer. Look deep at your cost on a property by property bases and you will start finding out where your real money comes from and where it does not come from.
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"the art of survival is a story that never ends"

Providing Lawn Services, Landscape Installations and Solutions and Sod Services in the Oviedo Florida Market

If you aspire to a six-figure income, don't get advice from someone making $18,000 a year!
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  #7  
Old 07-06-2012, 08:56 PM
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GreenT GreenT is offline
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Quote:
Originally Posted by Landscape Poet View Post
I do not chase shrubs etc just for the hell of it either. Most guys that I know will include shrub trimming etc for a extra $20 or $30. That simply does not make sense to me when I can go two houses down and mow their lawn and not spend near the time and make twice as much gross. It simply does not make sense to me and my business model. The same holds true for high detail properties....do we still have some..yes but I can assure you that those are not as profitable in this market as they should be in comparison to just straight mow, trim, edge, blow properties. There is a line of diminishing returns in the current market. Everyone is willing to give the customer extra for just a little more. I don't see it that way. You want your shrubs trimmed and you have a house surrounded by viburnum - that is fine, but it will cost you, because the time I spend jacking around with your viburnum every month - I can go mow two of your neighbors 3K of turf properties, edge them, trim them, and blow them off. This is were I differ from many - I do not let my ego get in the way and only insist on doing the nicest properties with customer who want everything perfect.....

Mike, I'm confident you will do well in the future with your operation. You are an intelligent man. That said, don't fall into the trap of thinking you have everything figured out. Do that and you will limit yourself.

There's a world of very high end clients that will not flinch at a $20K per year maintenance budget on their residence. Some, a lot more.

And that's a world that is extremely profitable....

.
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  #8  
Old 07-06-2012, 08:59 PM
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Quote:
Originally Posted by GreenT View Post
Mike, I'm confident you will do well in the future with your operation. You are an intelligent man. That said, don't fall into the trap of thinking you have everything figured out. Do that and you will limit yourself.

There's a world of very high end clients that will not flinch at a $20K per year maintenance budget on their residence. Some, a lot more.

And that's a world that is extremely profitable....

.
Glad someone on here gets it.....
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  #9  
Old 07-06-2012, 09:01 PM
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Quote:
Originally Posted by GreenT View Post
Mike, I'm confident you will do well in the future with your operation. You are an intelligent man. That said, don't fall into the trap of thinking you have everything figured out. Do that and you will limit yourself.

There's a world of very high end clients that will not flinch at a $20K per year maintenance budget on their residence. Some, a lot more.

And that's a world that is extremely profitable....

.
That's what I meant to do the first time.....
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  #10  
Old 07-07-2012, 07:55 AM
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Landscape Poet Landscape Poet is online now
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Quote:
Originally Posted by GreenT View Post
Mike, I'm confident you will do well in the future with your operation. You are an intelligent man. That said, don't fall into the trap of thinking you have everything figured out. Do that and you will limit yourself.

There's a world of very high end clients that will not flinch at a $20K per year maintenance budget on their residence. Some, a lot more.

And that's a world that is extremely profitable....

.
I do not doubt that market exist T nor that it is profitable or that it can be, but i am sure you would admit that it is a much smaller market with more limitations on obtaining those accounts.
My complaint was not so much about one style of account of business model as it was against that we are guilty of some lawnboy logic from time to time but in todays market if you are not careful you find yourself in our hot weather do hard work for much less you could make doing a simple mow n blow job. I figure you are smart enough to read between the lines and know what i am referring to.
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