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I've done my homework, I think??

Discussion in 'Starting a Lawn Care Business' started by GTS, Feb 12, 2007.

  1. GTS

    GTS LawnSite Member
    Posts: 3

    Hey all!

    First off this is a great site. Everyone has there own opinion, but based on that you can gather all information you need to form your own opinion.

    Sorry about the long post, I can't seem to attach my document??? (why is that?)

    Alittle bit about me and my situation.

    I'm starting up a property maintainence company, and have no idea what my actual costs are so I have had to estimate everything.
    I live just north of Kingston, Ontario so all figures are based on the canadian dollar and economey.
    I have all my equipement purchased and paid for, but want to upgrade everything to commercial quality. So in reality my starting overhead is very low, but I want to price everything in terms of allowing for expansion for my company.
    I have a full time job 3 days a week, lol, but starting out part time I want to charge for full time prices. (NO LOW BALLING) This way should I start doing this full time, my present customers will not be in shock when I were to adjust my rates.
    Presently $60.00 seems to be the going rate around here.
    I will be doing yard work, pressure washing, window cleaning, snow removal, garbage removal,tree work etc., basicly anything a customer needs in regards to outdoor work.

    Attached to this post is my pricing and costs.

    Could you look over it and tell me if it looks right?
    Is it comparable with your business?
    Do my rates look right?
    Any suggerstions?
    Any opinions?
    What do you do about overtime? do you operate at a loss?

    Thanks for everyones insight and should you wish to disscuss anything in private, you can email me at gtsservices@yahoo.ca


    Billable hours

    Middle of April to Middle of November (7 months)
    spring clean ups, regular maintenance, fall clean up

    7 months x 4 weeks x 40hours per week = 1120 billable hours


    truck ($30,000.00 / 5 years) $6000.00
    Truck insurance $1500.00
    Business insurance $1500.00
    Trailer ($5000.00 / 3 years) $1666.67
    Mower ($10,000 / 3 years) $3333.33
    Advertising $2000.00
    Phones $1200.00
    Fuel for mowers ( 28 weeks x $50.00) $1400.00
    Repairs and maintenance $2000.00
    Other $2000.00

    Total expenses per year $22600.00

    $22600.00 expenses / 1120 billable hours = $20.19

    My wage (or most expensive employee) $15.00 x 25% taxes = $18.75

    $20.19 costs + $18.75 wages = $38.94

    In conclusion I have to bill customers $38.94/hour to cover my total costs.


    $38.94 x 35% mark up = $52.57

    Approximately $0.88/minute for working time covers mark up, wage and costs.

    Driving time

    per/hour for fuel $20.00
    wages for 3 men (2 guys at $13.00, 1 man at $15.00) $41.00
    employer contributions ($41.00 x 25%) $10.25

    Total costs per diving hour $71.25
    $71.25 driving costs / 60 minutes = $1.19/minute of travel

    In conclusion I would bill the customer $0.88/minute for work done and $1.19 per minute of travel time.


    Customer lives 15 minutes away and has a 35,000 sq ft yard, about 20 minutes of trimming and 10 minutes of blowing. Myself and two men. I have a tractor with a 42 inch deck and two 21 inch mowers, trimmers and blower.

    I should be able to mow 35,000 sq ft in 30 minutes

    Driving time 30 minutes (to and from) 30 minutes x $1.19 = $35.75
    Total man hours 60 minutes x $0.88= $52.80


    What did I make?

    Driving time and labour took 1 hour to complete, for myself and two employees.

    My costs were labour for two employees ($13.00/ hour x 2 x 25%) $32.50
    Fuel for truck $10.00
    Hourly overhead $20.19

    Total costs $62.69

    Therefore I made $25.86 for the job, or approximately $206.88/8 hour day.

    __________________________________________________ ___________________________

    If I sent out 3 guys to do the work I would make $7.11 or approximately $56.88 per day based on these figures.

    Overtime if I had to pay overtime, I would be losing money on this job.

    Wages would now be $41.00/hour x 1.5 overtime x 25% employer contributions = $76.89

    $76.89 wages + $ 10.00 fuel + $20.19 costs = $107.08

    cost to customer $88.55 - $107.08 = -$18.53

    I lose $18.53 because of overtime

    If I lowered my overhead, I would increase the money I make. Example buy a 3 man crew an $8000.00 truck, and I would lower my costs to $16.25 making me $11.05 per hour or $88.40 per 8 hour day

    Should I increase my rates to cover overtime, or just take the loss and not allow overtime to happen??
  2. lawnpro724

    lawnpro724 LawnSite Silver Member
    Posts: 2,201

    It must suck to live in Canada. Business insurance around here is only $500-$600 a year for a $1,000,000 in coverage and you could buy a new 16' landscape trailer for $1,000 including trimmer racks, I did. Repairs? if everything is new why would you put $2000 for repairs? Seems like alot to me for new equipment I guess Canada is high on everything. Good luck on your endevours.
  3. Vikings

    Vikings LawnSite Bronze Member
    from canada
    Posts: 1,667

    You live in Canada so your billable hours are year round, SNOW REMOVAL. Get a 4x4.

    I'm going to buy that $1350 trailer at Home Depot myself or go to Princess Auto and build my own. $5000 for your trailer..must be an awesome trailer.

    Don't pay over time, this year I'm going to time houses out. 45 min for this yard maybe an hour for that yard. got one guy give him 8 hours worth of work or give him 10 hours worth of work but he is sort of a sub contractor. Getting paid by the job. I had a job like that in window cleaning and I like piece work.
  4. Tim Wright

    Tim Wright LawnSite Bronze Member
    Posts: 1,034

    My liability insurance with equipment insurance is $2500.00 a year and a good landscape trailer of 20ft would run $2500.00 minumum.

  5. Lugnut

    Lugnut LawnSite Senior Member
    Posts: 551

    The trailer could be enclosed, making the price about right
  6. Eakern & Dog

    Eakern & Dog LawnSite Senior Member
    Posts: 431

    This is sort of off topic, but is the abbreviation of your company going to be GTS ? If so, I have some GTS patches(see pic below) left over from a company I worked for that no longer uses this logo. If you know of someone that sews,they look good on baseball caps. I will send a few to you for free

    Attached Files:

    • GTS1.bmp
      File size:
      630.7 KB
  7. Duekster

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

    I think you are getting the idea of how to figure your cost.
  8. lawnpro724

    lawnpro724 LawnSite Silver Member
    Posts: 2,201

    I bought my 16' landscape trailer w/drop down gate for $905.00 out the door and trimmer racks for $125.00. The trailer was made by a company I have been buying trailers from since 1990 and they do not sell retail, they are a manufacturer. Why would you pay retail if you dont have to? My trailer is a New 16' tandem axle 3500 each axle w/drop down gate and wood floors wired up with lights, rims, tires and ready for work. Oh and yes it retails for around $2,100 and its built very well. I guess I'm just a little smarter than you ..........LOL. Things must just be alot higher where you are or you just haven't figured out how to buy things wholesale yet.
  9. Ford Guy

    Ford Guy LawnSite Member
    Posts: 36

    i live in London, Ontario, and landscaping is considered a farm industry and you don't have to pay overtime hours to anyone in the farm industry. your numbers seem pretty good, but for your truck you figured $30 000 over 5 years, did you include interest?
  10. GTS

    GTS LawnSite Member
    Posts: 3

    Thanks for the replies guys.

    From everyones input seems my numbers arn't to bad.(except for the trailer)
    As for the trailer, I also am a tree climber and do a number of removals and sell firewood. The price I put in was for a 6 ton dump trailer. I realize that I can get a landscape trailer much, much cheaper.

    Does anyone know more about the farm industory and not having to pay overtime? Or where I could locate the information?

    This will be my first year so all my numbers are what I will be using to start with. After I have compiled some data I will be able to adjust accordingly. I just don't want to start up and have my billing all screwed up, and have to make big changes.

    Keep the opinions coming, you can never have to much information!

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