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Old 08-25-2012, 12:34 AM
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cpllawncare cpllawncare is offline
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Margins

What kind of margins are you guys typically working off of? is there an industry avg? where would I look for such info?
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Old 08-25-2012, 08:16 AM
Duekster Duekster is offline
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Originally Posted by cpllawncare View Post
What kind of margins are you guys typically working off of? is there an industry avg? where would I look for such info?
Not trying to be a smart arse but when you say margins?

It would also vary by the type of work.
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Old 08-25-2012, 08:26 PM
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good point, lets say lawncare vs landscaping projects, I'm looking for 40% on landscaping projects , just wondering how far off lawncare is from that.
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Old 08-25-2012, 08:38 PM
Duekster Duekster is offline
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Excluding OH
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Old 08-25-2012, 08:56 PM
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the 40% is on top of labor and material cost, which is at 50% markup.
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Old 08-26-2012, 12:04 PM
Duekster Duekster is offline
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That is just it. I do not apply my Markup like that. Margins are on cost of product or service (COGS) and Mark up is after all expenses.

Just wanted to be clear on the terms before we toss around numbers.

My margins are close to 50% when looking at labor alone.
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Old 08-26-2012, 02:26 PM
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cpllawncare cpllawncare is offline
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That's what I was thinking labor margins are at 50% guess everybody has their own formula's, I just thought there may be an industry avg guess not.
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Old 08-26-2012, 02:30 PM
Duekster Duekster is offline
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I do labor calculation and get the total for a crew. I add up the burden as a percentage.

I then Multiply the labor rate by the burden.

Then I add the equipment cost and the OH.
I then add my markup.
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Old 08-26-2012, 05:36 PM
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Originally Posted by Duekster View Post
I do labor calculation and get the total for a crew. I add up the burden as a percentage.

I then Multiply the labor rate by the burden.

Then I add the equipment cost and the OH.
I then add my markup.
Thus giving you your gross margin?
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Old 08-26-2012, 05:44 PM
Duekster Duekster is offline
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Originally Posted by cpllawncare View Post
Thus giving you your gross margin?
Gross Margin % only includes direct expenses not indirect if I am thinking of the right term.

Therefore in our industry. You would include labor and equipment and cost of materials if any when calculating.

I think one way this is used is to check how efficient a company is.


IE, You wanted to value a company.... you look at how effective they are at delivering product / service versus how much their OH is.

In some cases you want the management to make your operation more profitable in other cases you just want the production.
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