How much profit do you make from an employee?

Discussion in 'Lawn Mowing' started by premierlawncare, Oct 1, 2005.

  1. premierlawncare

    premierlawncare LawnSite Member
    Posts: 91

    How much profit do you make from an employee? I have 100 accounts and run 1 truck. I am a owner/foreman and have 1 employee. I think that I profit 20% from my (good) employee. What do you think your profit is?

    I average about $50 an hour for the day, 8 hour day is $400. :cool:

    I estimate that if I did all the work alone I would make about $37.50 an hour.

    Keep in mind I am using a 36 stander for all 100 homes. I really need a 52 stander for 70 of the 100 to cut down more time.

    I figure I make $12.50 more an hour with 1 worker. I pay him $10 an hour. Thats a $2.50 per hour profit or 25% return on investment.

    Today my worker asked for a raise. payup I told him no!
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    On a 2nd thought, recently I had a 3 man crew doing 100 homes. Myself (foreman) and 2 workers. One of the workers was dragging his feet. For example I watched (clocked) him one day finish blowing off a med. sized home when we went to start a neighbors house. He took 25 minutes. :sleeping: I couldnt believe it. I confronted him about it. :realmad: Why did it take you 25 minutes ? he said there was alot of grass, blah blah blah. I let him go the next week.

    He called my 3 times a day for a week trying to get his job back. :cry:

    I was losing money on this employee by talking to him and his slow work.
    We work fast and the rest in the truck!!



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  2. Fantasy Lawns

    Fantasy Lawns LawnSite Bronze Member
    Posts: 1,913

    Your gonna need to know ALL your YEARLY operating cost before you can figure a REAL number .... anything before that is kinda guess work .... sure one can create an operating budget .... but these are general based on previous numbers & current cost (bills, etc) .... n from here we can "estimate" a profit per hourly rate ... per employee

    Anyways with that being said .... my average employee cost me $12.62 in the month of Sept .... total payroll with taxes & W/C was .... their average hourly rate is only $9.50 .... BUT this also includes my Foreman's salary .... so the $12.62 is a little inflated (based on a +$11K payroll & just over 900 hours of monthly labor) ... the point I'm trying to put across is .... just because you are paying him $10 per hour ... he is really costing you more when you input taxes & W/C if you have it

    That ALL being said ... fore me .... ALL cost figured .... that's direct, indirect & overhead ... last year I averaged just under $10 per hour ..... PROFIT .... per employee total yearly hours
     
  3. premierlawncare

    premierlawncare LawnSite Member
    Posts: 91

    Are you a working owner/foreman? How many trucks/crews do you run?
     
  4. Thirdpete

    Thirdpete LawnSite Member
    from Chicago
    Posts: 236

    grossing 400 a day, you should have bought that new stander already.
     
  5. premierlawncare

    premierlawncare LawnSite Member
    Posts: 91

    I just bought 1 new stander last month. 36. are you saying I should have bought 2? :)
     
  6. KINGjosh

    KINGjosh LawnSite Senior Member
    Posts: 531

    First off, Its really nice to see someone else on here from Fort Lauderdale. We're both in a real extreme market. Know body on this site has any idea what we have to deal with! Thats an awsome mower thogh ,I hear from local LCO's.

    How tight is your route? How many sub-cities do your accounts extend to?
     
  7. premierlawncare

    premierlawncare LawnSite Member
    Posts: 91

    Hey Josh, do you use a contract? I am going to monthly payments and contract come next april.
     
  8. Mower For Less

    Mower For Less LawnSite Senior Member
    Posts: 823

    I average about $15 per hour PROFIT per employee with a 2 man crew. It varies slightly depending on the day and how dense the route is that day, but about $15 is average for the week after overhead is accounted for.

    Kevin
     
  9. PTP

    PTP LawnSite Bronze Member
    from Tulsa
    Posts: 1,370

    I am not exactly sure. After I crunch the #'s from this year I will have a better idea.

    Here is what I do know:
    Solo, I was grossing about $45 per hour including drive time. With one helper, I am grossing about $80 including drive time. The employee takes about $14 per hour not including workers comp and stuff like that.
     
  10. PMLAWN

    PMLAWN LawnSite Gold Member
    Posts: 3,535

    Your numbers are way off. First he is not costing you $10.00 but with burden added to that is will be more like $13.00 per hour so now you are losing money.
    And why only $12.50 an hour more if he is working.
    In round numbers I look to get about $50.000 in production per guy.
    I run around a 8% profit margin so each guy I have should be putting about $4000 profit into the business.

    $50 per hour for the day is not good if it takes 2 guys to do that. You should be running about that per guy if you are doing residential.
    We get about $40 per hour (labor rate only)for the commercial stuff we do.
    While your direct costs stay the same for added guys you can profit from the indirect cost not going up when you add employees.
     

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