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  #51  
Old 05-04-2006, 01:49 AM
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Envy Lawn Service Envy Lawn Service is offline
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Quote:
Originally Posted by Soupy
This guy runs a much larger business then you or I. Plus I doubt the 35/man hr is for mowing. I have never seen anyone charge mowing by the hour it is usually per cut, month, or year. If he has a few guys on a mulch, pruning, etc. type jobs then he can make decent money with cheap tools and cheap labor. The lower price keeps them busy so he can easily make it up in volume. These type of business owners usually don't do the work themselves so they look at what the bottom dollar amount is and not the per man hour profit.

At this point we are all assuming to know what this guys expenses and profits are. For us smaller companies to say he is or is not making decent money is just assumptions.
Oh, but most guys are quoting a man hour rate x their best guestimate of man hours involved.

Anyways, I used the "put one employee on a mower" analogy as an example everyone can understand. And to put it bluntly, putting a guy on a mower is a pretty small time feat for putting an equipment operator in the field.... but put a guy on a tractor, skid steer, backhoe, trackhoe, wheel loader, dozer... well I'm certain you understand the obvious. I've been there, done that, and there is a lot of cost involved.

I always looked at the man hour profit. That's how I could tell what my company cleared per man hour and total on the job.
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  #52  
Old 05-04-2006, 01:55 AM
Evergreenpros Evergreenpros is offline
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$35 an hour with an efficiency rating of 75% (total hours vs income generating hours) with a 2 man crew is over $100,000 revenue a year per truck.

If you can't make money doing landscape maintenance clicking 100k a year per truck there is a problem.

Granted a solo wouldn't touch those numbers but if you had 5 trucks it would be 500k in revenue a year.

Wages at $10 an hour with everything included is less than 47k per truck. Making 20k profit per truck it leaves 32k for other expenses or higher wages.

Looks like a healthy company to me.
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  #53  
Old 05-04-2006, 01:58 AM
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Envy Lawn Service Envy Lawn Service is offline
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Quote:
Originally Posted by Az Gardener
Well I wondered how long it would take before all the solo operators figured this out. You are already paying all your expenses and trying to generate revenue off one person.

Lets say your expenses are 6-K per month, you have to earn 36 bucks per hour just to cover expenses. With 3 guys in that same truck now your only talking 11 per man hour to cover expenses, now you add the labor and your up to 23-25 per hour and your making 10 bucks per man hour, multiply that times 5 crews and you can see being a solo is not so attractive. Yes I know there is the windsheild time but you should still be able to bill for 85% of the work day. With that many crews there are supervisor expenses etc too. But you should get the gist of the economics, it is done all over with very profitable companies. Commercial rate around here is 25 per hour. Residential 30-35 for most.

Think about it, how much more will your expenses go up if you add one or two laborers to your operation, As long as you can efficiently manage your labor you may have to buy another mower maybe get a bigger trailer but the truck, insurance and fuel are your big expenses and they don't change with one or 3 employees in the truck, the cost only changes significantly when you put another truck on the road.

No disrespect, but if you are solo you own a job. If that makes you happy great. I had lots of jobs, I don't want to own a job.
Well, that might be true 'IF'...

1) One was paying wages under the table
2) Had no multiplied operational expenses involved


Also, insurance is an example of a fixed MONTHLY expense.
The majority of the rest is debt repayment, so lets call it what it is... debt.
And the interest on that debt is an additional monthly expense.

But anyways, thanks for the great example you gave so I could illustrate the typical mindset.
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  #54  
Old 05-04-2006, 02:08 AM
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Envy Lawn Service Envy Lawn Service is offline
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Quote:
Originally Posted by Evergreenpros
$35 an hour with an efficiency rating of 75% (total hours vs income generating hours) with a 2 man crew is over $100,000 revenue a year per truck.

If you can't make money doing landscape maintenance clicking 100k a year per truck there is a problem.

Granted a solo wouldn't touch those numbers but if you had 5 trucks it would be 500k in revenue a year.

Wages at $10 an hour with everything included is less than 47k per truck. Making 20k profit per truck it leaves 32k for other expenses or higher wages.

Looks like a healthy company to me.
But the cost of putting five trucks on the road with 2-man crews, tools to use and keeping them busy with work costs a heck of a lot more than a flat $10 per man hour....
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  #55  
Old 05-04-2006, 02:17 AM
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T.E. T.E. is offline
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Is this the competitor?

Originaly quoted by turfdude:
It is a numbers game. A lot has to do with your location, cost of living, equipment set-up, OVERHEAD, etc...

IF an average employee is paid $ 9/hr, and you're paying him benes, vacation, sick, figure in workman's comp, etc... then he's realling costing you $14-$15/hour. Then you must figure fuel charges, equipment costs, all other insurances (vehicle, business operating), equipment replacement, and all other fixed and variable costs. Finally you have to add your gross profit %. If you say you must make $60-$100 per man hour to make a profit then I say that your overhead costs are OUT OF CONTROL.

With the above given secinario, you should be able to make a decent buck at a rate much lower than that. Otherwise what you're really saying is that you need to make that money all year round mowing et.al., or conversely your prices for these services are too low and you now must make up your losses w/ extravagant leaf fees.
Once again, I don't mean to knock our industry, but in general we're not going to generate the same $/hr as an automechanic repair shop, electrician or plumber.
I have spoken to different people who claim to make $60 or so per manhour, but when you ask them what their 2 man or 3 man crew grossed that day, it ranges from $30-maybe $45/manhour.
I have found that I have been on a higher clean-up rate per manhour in my areas than a lot of others. We've all been around for 5-15 years. Not one of us comes close to this kind of rate per hour. Not one of us is a scrub. We all make a good living, pay our help well and make a nice profit.
To each his own I guess.

BTW, if all of the "other companies" bosses jumped from a bridge, I hope they wouldn't necessarily expect me to follow.
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  #56  
Old 05-04-2006, 02:47 AM
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SOMM SOMM is offline
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thats when competitor u know bobby, corrects and tells customer they read it all wrong, and that it's $35 per man per hour X 5 men minimum (includes equip) = $175 per hour.

or if its one man = $35 per quarter hour (incl. equip) would be better.
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  #57  
Old 05-04-2006, 03:04 AM
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Envy Lawn Service Envy Lawn Service is offline
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And another thing.... (and I swear I'm not picking on you)

But take this statement for example:
Quote:
Originally Posted by Az Gardener
Well I wondered how long it would take before all the solo operators figured this out. You are already paying all your expenses and trying to generate revenue off one person.

Lets say your expenses are 6-K per month, you have to earn 36 bucks per hour just to cover expenses.
Now, just for example, if you have figured out you can't make money at $35 per man hour solo.... what on God's green earth makes people think they can all the sudden make money if the hire employees to duplicate themselves in the field at the same man hour rate?

Really.... what makes people think they can take the product of a failing formula, multiply it and come out better somehow?
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"The bitterness of poor quality lingers on long after the sweetness of cheap price is forgotten"
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  #58  
Old 05-04-2006, 03:17 AM
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Envy Lawn Service Envy Lawn Service is offline
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Now... in my opinion, the bottom line is this....

There are too many people who treat their business finances like their personal/household expenses. Or they just intigrate it.

In other words, what I mean is, for instance... if during one month they came to the shop or came home with a total of a few thousand dollars in checks and cash, to them this is their income, as it would be if they had a common job. They then take their earmarked paycheck and pay up all their bills just like they were an employee. To them, gross business income = net employee income.

IOW, they think "Hey I made $30 and hour today" and so long as they can make their business debt and personal debt payments they are happy
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"If you place a low value upon yourself, rest assured..... the world will not raise your price."

"The bitterness of poor quality lingers on long after the sweetness of cheap price is forgotten"
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  #59  
Old 05-04-2006, 06:24 AM
lawnartisan lawnartisan is offline
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Me and my single 21" toro proline i bought used for $250 which I work out of the back of my 4 cylinder pick-up truck sure seems simple compared to all these considerations.
I cant wait to build clients to the point i can afford to hire and start exploiting lower wage employees to put money in my pocket. But hey, this is America, land of the free, home of the capatalist.
Im just starting out and heck I barely make $35 by myself before all my cost which are almost non existent.(because my route is very tight and i drive a 4cylinder.) Now I suppose alot of you bigger established guys who have all your cost figured out and make bank think $35 is a joke, but I feel $35 an hour on paper per man hour seems reasonable even for a large company. Not everyone has all there clients in Beverly Hills. Mowing takes certain learned skills, and you can put much pride in your work, but lets face it, its not rocket science. IMO $60 or more per hr on paper, not piece-work mind you, would seem to have you lose majority or your bids to your competitors. This is where price seems to affect the volume of work you can bring in-house to pack a schedule and hire some heads and to start having them put money in my pocket without having to lift a finger. In conclusion, Im looking forward to this day.
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  #60  
Old 05-04-2006, 07:14 AM
bobbygedd bobbygedd is offline
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the $35 per man hour, was for labor on work like leaf cleanup, trimming of shrubbery, etc. as far as the mowing, he bid less than us by about 12%. while talking to him, he said his lawns are all priced at about $35 per mow. each mow takes his 2 man crew about 25 minutes gate to gate (for u geniouses, that's gate down, when stopping, to gate up, when leaving).
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