How much does employee cost?

Discussion in 'Business Operations' started by rootytalbot, Aug 24, 2013.

  1. rootytalbot

    rootytalbot LawnSite Senior Member
    Posts: 273

    1) With taxes and work comp, how much does a 15 dollar/hr man cost per hour?

    2) What amount would you add to that cost for administration - per man?
    With-holdings, paperwork, and management - how much admin cost would you add for a middle of the road (semi-reliable) man?

    3) How do you figure a reasonable amount profit per 15 dollar (adjusted) man?

    I just hear, "charge 40 per hour and you'll be fine". But its hard to track the costs and know what I would profit without knowing what it actually costs.

    Thanks. I apply what I learn from this site on a daily basis, you guys are great.
     
  2. rootytalbot

    rootytalbot LawnSite Senior Member
    Posts: 273

    On a side note -

    could someone that is good at searches tell me how they would search my OP?

    I tried, and got good stuff, but never really nailed it. And it took forever.
     
  3. Stillwater

    Stillwater LawnSite Platinum Member
    Posts: 4,843

  4. PaperCutter

    PaperCutter LawnSite Bronze Member
    Posts: 1,955

    Your free place to start: http://www.sba.gov/content/small-business-development-centers-sbdcs

    Nicest people in the world. They will throw so much business info at you (for free!) that you'll be amazed. They can also recommend mentors and paid advisors to help you grow.

    I have a CPA, I pay her firm a couple hundred bucks a quarter for financial guidance. I think you should find someone local who can do that. Not every CPA is also an effective business consultant so you'll have to spend some time looking, but it's worth it.
     
  5. cpllawncare

    cpllawncare LawnSite Silver Member
    Posts: 2,659

    I hope your not using your labor markup as your only means of adding margin, I made that mistake, you can't put all your costing under labor cost say $40/hr and come out ok, it just won't work, been there done that,LOL
     
  6. JCLawn and more

    JCLawn and more LawnSite Fanatic
    from MI
    Posts: 5,206

    Here was my findings this year. A $10 employee would cost me $15. Now for me they would have to make $308 to break even on a day. That's one truck. If I ran 2 in a truck I am looking at around $480 a day in a w0 hour day. $40 a man hour would run you into the ground in a hurry at $10 a hour wages. At $15 a hour I would think your looking at around $22 a hour employee cost. So now for me I'd be at $370 a day for one person and $700 for 2. At those wages I'd think you need to be charging $60 a hour min and be trying to get $80 a hour.



    I think my math got a little sour in that, but I think you catch my drift. Break even would be $650 for 2 guys, that's $32.5 a hour averages. That's break even. So 60-80 a hour to make it profitable.
     
    Last edited: Aug 24, 2013
  7. ncpete

    ncpete LawnSite Senior Member
    Posts: 282

    I have seen the math for a $15.00 associate suggesting aggregate costs of $25.50 per man hour, when all taxes and associated insurance costs are figured in.
     
  8. Stillwater

    Stillwater LawnSite Platinum Member
    Posts: 4,843

  9. cpllawncare

    cpllawncare LawnSite Silver Member
    Posts: 2,659

    I was just using the 40/mn hr as an example not actual numbers, $60/mnhr would be about right for a 15/hr employee. It's really hard to get $60/mnhr though and $80/mnhr? forget it, not in this economy!
     
  10. JCLawn and more

    JCLawn and more LawnSite Fanatic
    from MI
    Posts: 5,206

    I thought through this myself and I am in the same boat. The way to get around it is to get a bunch of houses on the same street. To say they are 1/2 or smaller lots. Charge 35-40 a lot. 2 guys can cut 4 a hour easy. Well that's $140-160 so $70-80hr a person.
     

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