How do you put Overhead into estimates?

Discussion in 'Landscape Architecture and Design' started by MJK, Sep 24, 2006.

  1. MJK

    MJK LawnSite Senior Member
    Posts: 356

    I posted this in the Lawn Maintenance part, but thats because i have to parts to my company, build and maintain. My question is when you figure out your overhead, how do you put that into your price for work?
  2. Mike33

    Mike33 LawnSite Bronze Member
    Posts: 1,649

    are you meaning fuel. ins, advrt.,parroll, etc.?
  3. MJK

    MJK LawnSite Senior Member
    Posts: 356

    Yes, when you calcuate a companies overhead.
  4. Mike33

    Mike33 LawnSite Bronze Member
    Posts: 1,649

    Not to give you the run around, but what do you do. I do dirt landscaping with bobcat, misc. excavation, srw. If this is what you do i can help. If your cutting grass and property maint. i cant help you. Hell, i actually pay some one to cut my grass.
  5. JimLewis

    JimLewis LawnSite Fanatic
    Posts: 6,841

    I work it into the hourly rate that we charge. It's the only way to do it, as near as I can tell.

    So when people ask me why we charge $60 per man hour for design / build or $65 per man hour for irrigation I explain to them that this covers much more than labor. It covers all of our overhead. Our fuel, our office supplies, our office staff, liability insurance, bond, multiple licenses, vehicles, vehicle maintenance and lettering, uniforms, cell phones and radios, utilities, shop, worker's comp., auto insurance, estimating time, business literature, cards and forms, etc. etc. etc.
  6. AGLA

    AGLA LawnSite Bronze Member
    Posts: 1,742

    Record keeping is the answer. Things like gas and equipment maintenance is usually directly related to how much the equipment is used. You have to keep those records because you want to keep that as overhead for those certain operations (ie, you want to pay for your skidsteer with the skidsteer rather than all of the other work you do). Those figure in as overhead for those specific things.
    You have to track all of the expenses that you have over a year that are not directly paid for on an invoice to a customer. Those include wages you pay for workers time that is not directly billed (like when they wash the trucks, or your secretary, paid vacation time, ..., or yourself when you take a long lunch or a day off), rent, heat, electricity, liability insurance, postage stamps, paper, tee shirts, ...everything. Then you divide that over all of the billable hours that you have. In the end, you should have a good idea of how much you need to charge per billable hour over the course of a year.

    This does not work if you don't keep good records and/or you do not have any consistancy to how many billable hours you have over a year. It certainly does not work if you are new and have no records to draw this info from.
  7. YardPro

    YardPro LawnSite Gold Member
    Posts: 3,563

    take all your costs of doing the job, all labor, equipment, etc... then add your overhead...

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