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Old 04-19-2014, 02:57 PM
ReddensLawnCare ReddensLawnCare is online now
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Cost Per Hour

So guys, I am hoping I can get a little help here. I post a good bit, but don't normally ask for help. I am looking to get a comparative to other business around my size. I will share some numbers without being to revealing, but hopefully enough to gather some responses.

I am looking to see if my Cost per man hour is close to other companies my size.
My current cost per hour per employee is $37.50. That costs includes all of my fixed costs from last year and some variable costs such as payroll, fuel, and some materials. It also includes my fixed costs such as warehouse rental, truck and dump trailer payments, equipment replacement, and my salary.

I am basing my price per hour on 3,600 hours per year between two employees. I did not include hours I will work on this cost per hour. Is that the right or wrong thing to do.

Last year our sales were $141,000 and that was with Myself, one almost full time employee, and one guy that helped for 120 hours last summer. We have a customer list about 105 strong that we service at least 4 times per year. Of that we have 43 weekly accounts that consist of 19 full service contracted customers representing around $4,400 per month in revenue. We treat those 43 weekly accounts plus an additional 24 for a total of 67 properties that we do the fertilizer and weed control for.

We operate with one Chevy 1500, Chevy 2500, 6X12 Utility Trailer, and 6X14 Dump trailer. We run one ZTR and One Walkbehind.

So for those of you who actually take the time to figure out your cost per hour, please let me know if I am in line, or way out off on this figure. If you have something to contribute but need more information, please PM me and I will share the more specific numbers with you.

Thanks in advance.
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  #2  
Old 04-19-2014, 06:37 PM
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JCLawn and more JCLawn and more is online now
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I figured mine was $35ish a hr. I am close to your size. If you are working as an employee you should include yourself as an employee.
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Old 04-19-2014, 07:54 PM
ReddensLawnCare ReddensLawnCare is online now
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Working more as an owner. I don't do much gm, but help with installs and do sales
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Old 04-19-2014, 07:57 PM
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Quote:
Originally Posted by ReddensLawnCare View Post
Working more as an owner. I don't do much gm, but help with installs and do sales
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To me you have to include yourself as an employee no matter what unless you are just the chairman and do nothing in the business. In this respect the grunts are the ones fulfilling the work and making the company money.
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Old 04-19-2014, 08:27 PM
ReddensLawnCare ReddensLawnCare is online now
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In that respect my cost per hour should decrease because that is another 2000 hours per year and since I had my salary built into their rate, it should bring it down. Is that the correct thinking?
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Old 04-19-2014, 11:40 PM
ReddensLawnCare ReddensLawnCare is online now
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Anyone else
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Old 04-20-2014, 02:56 AM
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TPendagast TPendagast is online now
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This is your cost BEFORE adding in your profit?

IF it costs you 37.50 to run your show based on 3600 total hours , but those hours don't count your own hours?

You should either include your hours or add yourself into the costs as an overhead employee.

I tend to double recover, I bill for my own time on a job site AND recover for each employee on the site.

I average around $4/per hour per employee for just my self.


If all your costs per man hour equate to $37.50 then you tap on what? $17, so your billing the customer at $42.50? or are you BILLING at $37.50?
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Old 04-20-2014, 09:07 AM
ReddensLawnCare ReddensLawnCare is online now
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That cost of. 37. 50 included my salary. I charge 45 per man hour. The additional represents business profit correct?
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Old 04-21-2014, 01:15 AM
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TPendagast TPendagast is online now
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Quote:
Originally Posted by ReddensLawnCare View Post
That cost of. 37. 50 included my salary. I charge 45 per man hour. The additional represents business profit correct?
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In theory,

It's not actually profit until you've finished out the FY and your costs remained, in fact, 37.50 per hour.

You could have windfall jobs, or a very good efficiency year and your profit could be considerably more than planned as well.

Profit is all relative to performance/production.
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