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5 acre price estimation

Discussion in 'Starting a Lawn Care Business' started by Infinite, Feb 22, 2005.

  1. Precision

    Precision LawnSite Silver Member
    Posts: 2,995

    Get a handle on your costs.

    example My GL insurance is 1080 per year. or +/- $5.50 per day. So call it $1 per billable hour. My vehicle insurance is $1200 per year. Call it $1 per hour. My equipment costs are $5 pr hour. My gas costs are $2.50 per hour. Maintenance costs are $1.50 per hour. On and on. So my costs to be in business are something like $16 per hour.
    Then if you want to make a wage of $30 per hour. You need to charge $40 per hour for your billable hours to cover the paper work, estimates, maintenance time.
    So say you want to make $30 per hour over 40 hours weekly or $60K annually with my costs, you need to be charging $56 per hour.

    At $37 per hour with my (not real) above listed costs, you are pocketing something like $15 per hour. or $30K if you can bill 2000 hours.

    A rather simple example, but this is how one must conquer billing/pricing.
     
  2. drmiller100

    drmiller100 LawnSite Senior Member
    Posts: 562

    Interesting approach.

    I'm thinking about it a little different. I have fixed costs of doing business, and variable costs.

    Fixed costs I pay no matter if I work or I don't. Liability, truck payments, mower payments, marketing, rent, electricity I pay no matter what.

    Variable costs I pay when the mower is running. Fuel, maintenance, labor. My labor is right at 20 bucks an hour in costs. Compared to labor, the rest is mouse testicles.

    So, I can bid a four hour a week job at 35 an hour and keep my guys busy and pay their wages and pay on the fixed costs as I build my business. Or I can pass on that business and not keep my guys busy so they have time to go find a different job with more hours per week......

    Further, if I spend a little on equipment and arrange performance bonuses, maybe I can cut that 4 hour job down to a 3 hour job, in which case I am getting 47 bucks an hour. Not likely I know, but once you have the job it is easier to upgrade the customer or find efficiencies then if you are sitting at home watching tv.
     

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