healthy return on employee

Discussion in 'Business Operations' started by dmk395, Nov 3, 2001.

  1. dmk395

    dmk395 LawnSite Senior Member
    from Ma
    Posts: 992

    If I pay an employee 10bucks an hour, to make a healthy profit what should I aim to bill him out at per hour?
     
  2. Guido

    Guido LawnSite Silver Member
    Posts: 2,085

    applicable taxes, insurance, and benefits into that hourly rate also, before you add on the profit. I think it depends on your area and your overhead on how much to "mark him up". I'm sure someone else would be able to help ou better than I on this one.
     
  3. John Allin

    John Allin LawnSite Bronze Member
    Posts: 1,489

    $28 to $35 an hour, depending on overhead.
     
  4. dmk395

    dmk395 LawnSite Senior Member
    from Ma
    Posts: 992

    John,

    So a foreman type should be billed out at around $40 per hour, meaning someone I pay $14-15 per hour (going rate in my area)?
     
  5. Guido

    Guido LawnSite Silver Member
    Posts: 2,085

    I would think if he is taking your spot on the crew you could charge what you were charging for yourself for an hour of labor. Not sure what your plans are, but I think most that hire a foreman is so they can take a step back into the marketing and customer service side and factor their cost into their overhead per hour.
     
  6. gogetter

    gogetter Banned
    Posts: 3,256

    I agree with Guido on the foreman question. I would say you would aim for the same amount you get for yourself.

    In other words, I shoot for $35 an hour for myself. If I hired an employee, I would strive for $35 per man hour.
     
  7. John Allin

    John Allin LawnSite Bronze Member
    Posts: 1,489

    I agree ( for what that's worth to anyone )
     
  8. HBFOXJr

    HBFOXJr LawnSite Bronze Member
    Posts: 1,706

    Approx. employee costs per hour

    $10.00/hr employee
    $ 1.00 OT 40 reg hr plus 10 ot @ $15 avg/ $11.00 hr for 50hr
    $ 1.95 SS, WC, LIA (approx 17.5% of wages ($11))
    $ 4.50 equipment (avg)
    $ 5.00 OH (up to $10)

    $22.45 miniumum employee cost per hr

    I'd like to make at least $10 per hr off this person working 1500 to 1600 hrs per year ($15-$16K)
     
  9. dmk395

    dmk395 LawnSite Senior Member
    from Ma
    Posts: 992

    Hb fox,

    So with that rational 32-35 per hour?
     
  10. HBFOXJr

    HBFOXJr LawnSite Bronze Member
    Posts: 1,706

    Depends on the real numbers for this situation, an individuals earning expections, and the industries ability to meet those expectations assuming a well run operation.

    When I see what laarger companies in and out of the green industry pay for people, sometimes I think I'm nuts and I've revised my expectations up.

    I have a college degree, 30 years self employed in the industry and a large investment in being able to field 3-4 crews for assorted lawn care and irrigation activities.

    Figuring that technically you should be making money "renting" your employees and equipment, selling what ever materials you use on custoemr jobs and working in the field or managing yourself, you ought to be making plenty.

    If you think just making $2.00-$5.00 an hour more than you could working for the man, sump'in ain't right.

    Everybodies right is different in $ but not in the reasons or methods of making those $ and not the difference some people think because they don't understand that even a 1 man band has overhead.
     

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