How much does employee cost?

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

  1. cpllawncare

    cpllawncare LawnSite Silver Member
    Posts: 2,659

    That's a viable plan for maint, we do that all the time. But for design install having your labor rate set at 60-80/mnhr is practically impossible to sale jobs. we do have to get creative with the math on that side of the business, most people cringe at anything above 55/mnhr.
     
  2. McFarland_Lawn_Care

    McFarland_Lawn_Care LawnSite Bronze Member
    Posts: 1,387

    Working man hours and billable hours are two different things as well. So even though you might be charging 60/hr, you need to determine what you billable time is on average. Say you have a guy that's costing you $20/hr including all labor associated costs. Then tally up the rest of your overhead and add that into the cost per hour based on a 40 hr week. Next, track all your billable time that you do on your own. Take into account, break downs, fueling up, loading and unloading in the morning/evening etc. Then add some extra time because no employee is going to work quite as hard or fast as the owner will. So if your average billing per man hour is more than your total overhead by a decent margin, then it makes sense to hire (provided you have enough work and equipment). If not, then try to change something - charge more, become more efficient, get better equipment etc. So say all my expenses (labor and EVERYTHING ELSE) comes to $35/hr. I'd need to be getting at least $40 per hour to make it worth it. That means 400 per man each 10 hr day. Do the math for your specific situation.
     
  3. JCLawn and more

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

    well that you could get away with easier because you on the job longer. If you can sit at one place and not move to another job, ya, you would make money at $50 a hr. Its more about your daily average than your job rate because your daily average sets your job rate.
     
  4. Stillwater

    Stillwater LawnSite Platinum Member
    Posts: 4,808


    Unrealistic long term, although it sounds comforting it is not a viable business model.
     
  5. JCLawn and more

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

    Kinda depends on where your at. Guys do hoa's and I have a few subdivions I work in that are 1000+ houses. It can be done.
     
  6. cpllawncare

    cpllawncare LawnSite Silver Member
    Posts: 2,659

    It's hard to do these days when there is so much underbidding for sure, but it would work if you could work it out somehow.
     
  7. McFarland_Lawn_Care

    McFarland_Lawn_Care LawnSite Bronze Member
    Posts: 1,387

    This area is ALL rural - NO "average" lawn size. It's crazy how much different business is in other areas of the country. What's a "LOT"??????? lol
     
  8. 32vld

    32vld LawnSite Gold Member
    Posts: 3,984

    A "lot" is small. :laugh:

    1/4 acre or less.
     
  9. jrs.landscaping

    jrs.landscaping LawnSite Silver Member
    from Maine
    Posts: 2,716

    same here, a "house lot" is usually 2 acres...... how much they turn into lawn depends on the homeowners, could be 7k sq ft or it could be 70k sq ft :dizzy:
     
  10. cpllawncare

    cpllawncare LawnSite Silver Member
    Posts: 2,659

    Most neighborhoods have an avg lot size just go by that. Usually a "Lot" is 1/4-1/2 acre depending on the neighborhood. "LOT" must be a southern term LOL not sure what you yankees call it. LOL although I have seen lots that are 1-2 acres so who knows LOL
     
    Last edited: Aug 25, 2013

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