desired %profit on commercial vs residential

Discussion in 'Lawn Mowing' started by grassmasterswilson, Feb 7, 2012.

  1. grassmasterswilson

    grassmasterswilson LawnSite Platinum Member
    from nc
    Posts: 4,521

    Anyone care to say what percent they are getting? Most of my residential lawns are getting above 50% the best I can figure. The smaller the lawn the larger the % profit. With commercial I am figureing in 15-20% profit. I would rather lose a job to a low baller than get one and not make anything.
     
  2. BBC.lawn.services

    BBC.lawn.services LawnSite Member
    Posts: 170

    Here's what I put together.

    I calculated all my numbers per working hour here's what I'm getting:
    $25 per hour for the guy running the ZTR mower
    here's the breakdown per hour -
    $12 salary
    $4.5 gas
    $1 insurance
    $3.5 mower replacement (est. 1,500 hr. life, initial cost $5,000)
    Maintenance + miscellaneous expenses (truck gas, trailer wear and tear) - $4

    $18 per working hour for the helper/weed eater/push mower guy
    $12 salary
    $3 gas
    $1 insurance
    $.50 equipment
    maintenance/other expenses - $1.5

    Puts us at $43 per working hour
    company profits/taxes/rainy day fund (pretty much just equipment reinvestment money.) 16% = $7 (rounded up .12 cents)

    = $50 2 man working hour


    So I try to make 16% on top after all foreseeable expense are payed. Thou... with a truck the price would go up. Forgot to plug that in.
     
  3. orangemower

    orangemower LawnSite Silver Member
    from pa
    Posts: 2,773

    Those are practically lowballer prices. $25 an hour for a ztr mower AND operator? Where's your profit? WOW $43 an hour for two guys and all the expense? Holy cow that's cheap. You're driving the prices down with those numbers.
     
  4. BBC.lawn.services

    BBC.lawn.services LawnSite Member
    Posts: 170

    Lol... that's what I look at when I'm giving a bid. This is purely my direct expenses. I have truck/trailer payments to factor in. as well as tools/workshop stuff etc.

    I'm still developing my system for expenses so this is a work in progress. Where do you see that I need to charge more?

    This is more for small commercial and residential.

    When ALL expense are factored in than it equals about a dollar a minute for (less for weed eater guy becasue they generally don't cost to much.) but for the ZTR guys (and to cover business related expense) it equals a bit more than a buck per minute. It's this still low balling?
     
  5. djagusch

    djagusch LawnSite Platinum Member
    from MN
    Posts: 4,203

    Just trying to help you out. I don't think I can have a employee on a site for less than $45/hr with a worth while profit using handheld equipment. Key words is worth while profit.
     
  6. unkownfl

    unkownfl LawnSite Gold Member
    Posts: 3,838

    I think your cost of doing business is way to high. You need to reduce it to be competitive. You spend $7.5 an hour in fuel? $2 dollars an hour on insurance?
     
  7. fastlane

    fastlane LawnSite Senior Member
    Posts: 347

    Truck, equipment and liability insurance - about $3000 a year. 40hrs a week x 26 cut season = 1040hrs. Insurance is about $3 an hr. I work less than 40 hr so insurance cost more than $3 an hr.
     
  8. blk90s13

    blk90s13 LawnSite Bronze Member
    Posts: 1,452

    That is what I figured as well $45-$50 per man hour
     
  9. Your paying a lot for insurance. I pay just over $2-K/year for truck/trailer,equip and GL. Time to find new insurance.
    Posted via Mobile Device
     
  10. djagusch

    djagusch LawnSite Platinum Member
    from MN
    Posts: 4,203

    Just remember insurance can vary greatly. How many trucks/trailers do you own compared to him? What value of equipment compare? Do you have 50K in sales and he has 300K in sales? Is he counting work comp? What coverages? To many variables to say insurance is low or high, FYI the wife shops mine yearly and pay $350/month.
     

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