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Labor costs vs Gross sales?

Discussion in 'Business Operations' started by baruch05167, Mar 19, 2007.

  1. baruch05167

    baruch05167 LawnSite Member
    Posts: 7

    Does anyone else know what their labor costs are compared to their total sales?

    I usually run 50%. In other words. If I made $100,000 in sales this year, the labor costs would be $50,000. That includes me when I work on the job. I pay myself an hourly rate for doing the same work an employee on the job would do.

    I'm thinking that my labor percentage is too high. Any thoughts?

  2. rodfather

    rodfather LawnSite Fanatic
    Posts: 9,501

    It is. Our's were 25.37% for 2006
  3. haybaler

    haybaler LawnSite Senior Member
    from ma
    Posts: 511

    Good question. mine was about 30% last year(not including my labor), but I worked my a++ off. this year I think about 50%. Exmark used to show a pie chart in there brochures showing you how much you spend on Labor, fuel, equipment. basicly they where trying to convince you to buy the biggest mowers possable and spend less on labor.
  4. bullethead

    bullethead LawnSite Senior Member
    from Texas
    Posts: 273

    I think it depends on what you do. Is it just maintenance, just landscape or both. Adding materials to the mix is going to affect percentages to some extent. That being said - we have maintenance and construction crews - the blended labor percentage is 45%. My goal is to reduce this to 40% this year through harping on productivity (kind of like an earlier thread this month was discussing)
  5. Tony Clifton

    Tony Clifton LawnSite Senior Member
    Posts: 865

    Should be about 25% for landscaping, and 33% for maintenance.
  6. baruch05167

    baruch05167 LawnSite Member
    Posts: 7

    For maintenance it was 50%. My landscaping, which last year was small, was of course much better.

    TJLANDS LawnSite Bronze Member
    Posts: 1,669

    31.8% for 2006............ 80% Maintenance 20% snow
  8. sunriseturf

    sunriseturf LawnSite Member
    Posts: 114

    Mine runs about a third unless you add in the matching taxes which bumps it up to 42-45%. Depending on how much your payroll is. Yo only pay a certain percentage on unemployment up to 8000 dollars for each employee. That is also a variable rate so it can differ from year to year.
  9. rodfather

    rodfather LawnSite Fanatic
    Posts: 9,501

    and yes, that does include matching taxes as well.
  10. Precision

    Precision LawnSite Silver Member
    Posts: 2,995

    And Rod, you remain my personal hero. Now if I could only gross what you pay for labor I would be doing ok. :)

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