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$35 per man hour

Discussion in 'Lawn Mowing' started by bobbygedd, May 3, 2006.

  1. Envy Lawn Service

    Envy Lawn Service LawnSite Fanatic
    Posts: 11,062

    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.
     
  2. Evergreenpros

    Evergreenpros LawnSite Bronze Member
    Posts: 1,155

    $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.
     
  3. Envy Lawn Service

    Envy Lawn Service LawnSite Fanatic
    Posts: 11,062

    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.
     
  4. Envy Lawn Service

    Envy Lawn Service LawnSite Fanatic
    Posts: 11,062

    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....
     
  5. T.E.

    T.E. LawnSite Senior Member
    Posts: 799

    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.
    __________________
    Bob
    If you fail to plan ..... you plan to fail.
     
  6. SOMM

    SOMM LawnSite Senior Member
    Posts: 426

    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.
     
  7. Envy Lawn Service

    Envy Lawn Service LawnSite Fanatic
    Posts: 11,062

    And another thing.... (and I swear I'm not picking on you)

    But take this statement for example:
    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?
     
  8. Envy Lawn Service

    Envy Lawn Service LawnSite Fanatic
    Posts: 11,062

    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
     
  9. lawnartisan

    lawnartisan LawnSite Member
    Posts: 55

    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.
     
  10. bobbygedd

    bobbygedd LawnSite Fanatic
    from NJ
    Posts: 10,178

    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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