Do YOU know your hourly rate?

Discussion in 'Lawn Mowing' started by Rob T, Jan 28, 2003.

  1. Rob T

    Rob T LawnSite Member
    Posts: 165

    I see SO MANY posts on this site related to $/hour. It seems EVERYONE wants to know what their competition is charging. It really shouldn't matter though. It's all about what it cost YOU to do biz.

    So, how many of you actually sat down and figured out what you need to charge.

    How did you do it?
    Did you use an accountant?
    How do you deal with variable costs?
    How do you deal with fixed costs?
    How did you determine your final $ per hour?
    Did you do time analysis for your services?
    Do you have a spreadsheet or other useful tool to determine overhead costs?

    Say you have a lot of overhead but only a few jobs. You cant just charge $500/hr to cover costs. How can you determine a fair $/Hr figure without cheating yourself?

    Personally, I have made spreadsheets to figure my costs. However, it seems so hard to really nail it down accurately.
     
  2. lawncare3

    lawncare3 LawnSite Bronze Member
    Posts: 1,981

    I never charge an hourly rate. I don't because most people compare their prices to their own job. If you are getting $13 an hour would you really want to pay another guy $65 an hour?

    I would say most of them on here are charging about $25-75. The other reason I don't charge by the hour is that i'm so productive I get whatrever it is done in 45mins.:p
     
  3. troblandscape

    troblandscape Guest
    Posts: 0

    I think one of the benifits of having a bussiness is being able to avoid that thing called "hourly rate" because there is nothing better that doing a job you thought would take 8 hrs. only end up taking you 4hrs to get done, but I have found sometimes an hourly rate is good to use on jobs you dont know how long it will take,,, weeding which reqiures no eqiupment 35 per hour per man
     
  4. Flex-Deck

    Flex-Deck LawnSite Silver Member
    Posts: 2,846

    Take this machine, and charge a customer $320 for 19 acres, get it done in 2.3 hrs = $139 per hr.

    Machine cost = $16000 new - ONE OPERATOR - no help required.

    [​IMG]

    wide deck-snow-1.jpg
     
  5. walker-talker

    walker-talker LawnSite Platinum Member
    from Midwest
    Posts: 4,771

    You need to figure what your equipment cost are. The life span of a piece of equipment(all in hour measurements), how much it will cost to replace the unit, how much will be invested in the maintenance over the life span of the unit, how much fuel consumption within an hour. After collecting all the data you can arrive at an hourly cost of running that piece of equipment per hour. Other variables involved as you mentioned before. After figuring your hourly cost of equipment, your hourly wage and then what kind of profit you set.......you can come up with your set hourly rate. I think that most of this is in order.

    MATT
     
  6. lawncare3

    lawncare3 LawnSite Bronze Member
    Posts: 1,981

    Flex deck, how will you get that machine onto a trailer?
     
  7. Flex-Deck

    Flex-Deck LawnSite Silver Member
    Posts: 2,846

    Unflip two 1 7/8" ball hitch recievers, and use the front one - which you see on the front of the tractor - as a handle to pull the extra deck into the enclosed trailer behind the tractor - Should take at least 10 seconds to clip on or unclip the extra deck
     
  8. xpnd

    xpnd LawnSite Senior Member
    Posts: 378

    All that walker talker said but a different approach. I broke my rate down to what it cost per thousand square foot of turf serviced. For most residentials this number covers edging, line trimming, mowing, and clean-up. Commercials (and unique residentials) on the hand typically have more edging, line trimming and clean-up time than actual mowing turf time. Each task has an assigned $$ value and it is extended out by either linear feet or sq feet worked to bid the property. Each of these tasks is measured over a reasonable distance. It includes employee time, fuel used, equipment lifespan, repair and maintenance, overhead (which contains too many factors to list), etc, etc....If you don't understand what each portion of the entire job costs to make a complete job, then there is a good chance your profit margin is sufferring but it will be impossible to figure out where and why. 10% of your work will account for 90% of your losses. How much does it cost to edge 2500 feet of concrete or blow down 3750 sq feet of accompanying sidewalk? That's not hard to determine if you know what the cost is for 100' of edging of 1000 sq feet of concrete. Will going into this type of analysis paralysis give you a competitve edge? You bet. You'll only be working jobs where you're making money. I've eliminated myself from many jobs on the first pass because of where the numbers have led me. I'll let some fool who doesn't think knowing the numbers is all that important and does bids by guesstimating have first second or even third wack at the job, but eventually, usually about mid year, the phone will start ringing again to see if I will still honor my initial bid. Costs treated in this manner will cause your hourly rate to work out by default. I know what my equivalent hourly rate is but because of my approach to the business I never lose sleep over it because I know each task is profitable. I have yet to find a task that can't be analyized in this manner weather it be shrub trimming or weed control or anything inbetween.
     
  9. IBGreen

    IBGreen LawnSite Senior Member
    Posts: 726

    I don't know, hang on a second. Hey! Bill Davis, what do you charge? about $30 less than him!:D :D :D Just jkn man.
     
  10. Mid Rivers

    Mid Rivers LawnSite Member
    Posts: 209

    Flex-deck. You can mow 19 acres with that in 2.3 hours? Do you have to turn around or is that one strip about 10 miles long because that JD doesn't have a ground speed of much more than 5-6 mph does it. And you have to figure time to get that monster off the trailer and back on.
     

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