How does size of crew effect estimate?

Discussion in 'Business Operations' started by 32vld, Apr 27, 2012.

  1. 32vld

    32vld LawnSite Gold Member
    Posts: 3,984

    Say you charge $60 hr solo.
    So you charge $120 for a 2 hr job.

    Now if you plan on using 2 people (you and an employee) and do the job in 1 hr do you still charge $120 or do you charge less or the same, and why?
     
  2. gcbailey

    gcbailey LawnSite Silver Member
    from WV
    Posts: 2,552

    does your employee make the same hourly rate as you? I don't know the exact math, and my theory may be wrong, but this is how I figured my 1st 2 man residential job

    crew of 1 (me) it was $80. Expenses were mower wear, gas for mower, gas for truck, trimmer wear, edger wear, fuel for trimmer, edger. Time it took was 2.5 hours....

    Added a 2nd man and I charged $100.... his hourly rate was $10. Same expenses add his hourly rate.... time to complete the job dropped to 80 minutes and we were able to pick up additional clients due to time saved. Ended up making more money in shorter time by adding another man and only charged $20 more.
     
  3. Calvert Lawn

    Calvert Lawn LawnSite Member
    Posts: 21

    I use a part time helper that works with me on the jobs that are condusive to his help. I charge $50/per if its a one man job and $80/per if its a two man job. This seems to work out where I make about the same amount either way.
     
  4. shop's lawn

    shop's lawn LawnSite Member
    Posts: 72

    With our mowing,irrigation and landscaping we try our best to stick right at $50.00 per man hour. Some mowing jobs dont equal out to that but then other jobs that ended up getting done faster then we thought when bidded picks up the time. Our min on mowing $35.00 per cut.
     
  5. Champion-Lawn

    Champion-Lawn LawnSite Member
    Posts: 74

    The size of your crew does affect the estimate based on your productivity and efficentcy. What really trips guys up is when they start doing work outside of the business model they are targeting. An example would be the company that only does residential and gets 1 large commercial account that they do during the week. You lose your strategic strength and effecentcys. Not to mention the equipment may not be geared toward the jobs. All that being said if you want to break out of the mold you have to start at some point, right?

    A one hour job for a one man crew = 1 billable hour of labor $60
    The same one hour job from above should in theory only take 1/2hr for a two man crew = 1 billable hour of labor $60

    I will be the first to say that the smaller crew size you can have on a property and work productively and effecently the more profits will go into your pocket. Some look at the total daily schedule, some look at the weekly schedule all to figure out how to configure crew sizes for routes. Some say if we cut more yards in a day because we have two man crews we are more profitable. This in not nessicarially so.

    If a solo operator cuts 6 properties a day at $60 each all being one hour in length and 1.5hrs of total travel time and .5hrs for lunch that operator makes $360 / 8hrs = $45hr / 1 operator = $45 an hour

    If the two man crew cuts 15 properties a day at $60 each all being one billable hour in length and 2.5hrs of total travel time and .5hrs for lunch that crew makes $900 / (7.5hrs labor + 2.5hrs travel + .5hr lunch) = $85hr / 2 operators = $43 an hour each

    Its the ago old debate; do you want to have the head ache of 5 million in revenue at 4% profits or do you want 1 million in revenue at 20% profits?

    **Note the small bump in travel time for 15 jobs, which demonstrates the importance of factoring in travel time.
     
  6. Duekster

    Duekster LawnSite Fanatic
    from DFW, TX
    Posts: 7,961

    A man hour is a man hour is a man hour.

    Some jobs are more productive with 1, 2, 3 and sometimes 4. Many jobs can be done solo where as having too many people is counter productive.

    Windshield time can kill you

    I rarely discount for the second, or 3rd guy unless they are truly a helper.
     
  7. 32vld

    32vld LawnSite Gold Member
    Posts: 3,984

    This has been my thought when I started this thread. If your business must charge $60 an hr to cover costs, and provide capital to grow and expand then this is what you have to charge for every billable hr.

    If you were to get paid $60 hr to do a job solo you need to still charge $60 when you and a helper can do it in a 1/2 hour.

     
  8. grassmasterswilson

    grassmasterswilson LawnSite Platinum Member
    from nc
    Posts: 4,474

    What i find is that its all about billable time. Although many times a 1 hour solo job for me doesn't always take 30 minutes with 2 guys.

    There's a difference between a crew of 2 guys and a crew of you + 1 guy. You are always going to work harder than most hired hands. So if you are going from solo to a +1 that job that took 1 hour might now take 40 minutes.

    Some jobs will be better than others, and the +1 takes some of the fatigue out of going solo all day. So I always like to factor in cost, labor, profit, and a little extra for unexpected overhead when giving estimates.
     
  9. Duekster

    Duekster LawnSite Fanatic
    from DFW, TX
    Posts: 7,961

    1 guy @ 60 X1 = 60

    2 guys @30 X 0.5 = 60

    watch your wind shied time.

    Small jobs, lots of people in a truck for 10 mins is more costly than 1.
    Large jobs it does not hurt you as much.

    I do not recommend dropping labor rates much on small jobs.

    Bigger jobs that have a lower percentage of mobilization time you can and should consider it.

    I do not mind helping here some but you have not identified your actual cost. Kind of a cart / horse thing.

    If you have a truck with 1 guy in it, that guy has to pay for that truck.
    if you have 4 guys in a truck, then ???

    You also have to know your fixed vs variable cost.


    Clue, fixed cost are not consistent cost....

    Fixed cost are those you do not control. IE Workers comp is not under your control and is attached to labor. Many people call this type of cost burden.
     
  10. wbw

    wbw LawnSite Fanatic
    Posts: 5,406

    Fixed cost are those you incur whether you produce or not. A truck payment is a fixed cost. You have to make the payment whether you work or not. Gasoline for the truck is a variable cost. You only have to purchase fuel if you are working.
    Posted via Mobile Device
     

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