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Figuring Operating Costs: Mower

Discussion in 'Lawn Mowing' started by MOturkey, Sep 4, 2005.

  1. MOturkey

    MOturkey LawnSite Silver Member
    Posts: 2,757

    I've been taking some extra time of late to try and get as close an estimate as possible to the actual costs involved in operating my equipment. I honestly believe there are lots of people out there who don't have a clue as to what it actually costs to run a piece of equipment, which is likely one reason so many people underbid on properties.

    I'm keeping accurate, by the minute records on my existing accounts for mowing and trimming and comparing them to my current pricing to see where and how much I need to increase my fees. I also think this will help me in bidding future properties.

    I've already determined that my Gravely with the 23 horse engine uses approximately 1.3 gph of fuel. I've taken the liberty of factoring the dollars spent with a fuel cost of $3, the current price. I'm sure prices are going to drop somewhat over the short term, but who knows about next year and the next? Using $3 per gallon seems a reasonable starting place and adjustments can always be done later, if necessary.

    Here is what I've come up with so far:

    Fuel $4.00
    Routine maintenance
    (Oil changes, air filter replacement) .45

    Blades (based on average blade life
    of 150 hours) .40

    Blade sharpening 1.00

    Repairs (estimated) 1.00

    Subtotal $6.85

    These are for the most part, fixed costs, which vary little. the one remaining variable is depreciation on the mower itself, and I've never been able to glean any accurate information of what most people use as a base for this. I estimate it would have to be $5 per hour, or more, in most instances, so adding in that $5 brings us up to $11.85 per hour, or 20 cents per minute.

    Does this figure, to you guys who have been doing this for years, seem reasonable? I plan on using these figures as a starting point in figuring future bids, if I, and others, seem to think they are valid. I plan on purchasing some type of sharpening equipment next year, so that expense, will, at some point in time, decrease by doing it myself. I also plan on jumping from the current 50 inch deck to a 60, if and when I purchase another mower, so productivity should increase when that happens, as most properties in this area have larger yards, and I believe the benefits of a 60 outweigh any disadvantages it might have.

    Any input would be most appreciated, and I'm thinking this thread might help some new people avoid seriously underbidding properties. Thanks. Neill
  2. Imow4u2

    Imow4u2 LawnSite Senior Member
    Posts: 377

    I'll be watching this thread very closely, I've gotten to the same point. Right up to the depriciation which I think gets better the longer you own your machine. Mine is closing on 1500 hrs. and I've had no trouble with it.
  3. GarPA

    GarPA LawnSite Silver Member
    from PA
    Posts: 2,585

    there was a thread here a few years ago about this very subject. I think back then, around $5 was being tossed around and until gas went over $2/gal, the $5 per hour was a good benchmark.

    I'm now using $6 per hour based on a mower lasting 2000 hours...of course many get more than 2000 hours but I'll stick to it for operation cost purposes.

    GLad to see you want to know your numbers....too few of us in this business have any idea what our operating costs really are.
  4. ed2hess

    ed2hess LawnSite Fanatic
    Posts: 13,192

    I would also be very interested in your study. Now if you tacked on labor cost and insurance, trimmers, blowers, trailer, truck, etc you may be well over $30 per hour. How could you compete with the medium and large(TG)size lawn services that are operating sucessfully at a much lower labor and burden rate? How can TG operate at $25/hr???
  5. bobbygedd

    bobbygedd LawnSite Fanatic
    from NJ
    Posts: 10,178

    my costs are figured very accurately, down to the hour/day. unfortunately, i find it impossible to figure costs, until AFTER the year is complete. i believe operating costs will vary greatly, from business to business, even if they had identicle setups. the reason- we are not robots, we all do things a bit differently. my costs are based on my previous 3 yrs averaged. and they, are very accurate.
  6. MOturkey

    MOturkey LawnSite Silver Member
    Posts: 2,757

    I agree with this. I've no doubt that those who run their machines until they are virtually worn out probably come out with the best ratio of cost to hours of operation. But, repairs are, in most cases, going to go up substantially with equipment with lots of hours, plus some people (like myself) are not particularly mechanically inclined, and would rather trade more often so as to minimize having to work on them. Whether or not I can afford to do that remains to be seen. Neill

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