Man hour rating (Job Costing)

Discussion in 'Business Operations' started by Ghopper3345, Dec 31, 2012.

  1. ReddensLawnCare

    ReddensLawnCare LawnSite Bronze Member
    Posts: 1,652

    Cooluv not trying to be a jerk but you often give opinions and insight on things you know nothing about. If i had to guess i would say you are solo. I have one full time and one part time employee so by no means am i large but i am succesfull. The only debt i own is my truck for the company. Started with a Troy built riding mower and now has close to 85k in assets and i am proud of that. Sean's original and sequential post have all been spot on and correct even if you don't see it. Someone in your position really has no ground to stand on when you are arguing with someone like Shaun. If you had facts or EXPERIENCE to support your post then i think your opinions state here would be more respected. Just saying for future reference
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  2. Duekster

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

    Well Sean,
    your further discussion is spot on and does clear up the initial post. On the forum there are many people that post that all their equipment is paid for and do not have any overhead. They charge rates like the lawn boy using daddy's mower just to make some pocket change. Some are people looking to suppliment their regular job, some are semi retired, or in college. You get the point.

    If I made a 40K investment I would look ROE and earning my cap rate too. Often you can get an improved ROE with leveraging and many people do not get that. Thank you for making that point. WACC i know :) and IRV.
     
  3. coolluv

    coolluv LawnSite Gold Member
    from Atlanta
    Posts: 3,621



    Can you be more specific?


    Dave...
     
  4. coolluv

    coolluv LawnSite Gold Member
    from Atlanta
    Posts: 3,621

    Well can you walk me through the process of the startup to the Real Business and the timeline to becoming the Real Business....and the $200 marketing campaign?


    Dave...
     
  5. DaveyBlue32

    DaveyBlue32 LawnSite Member
    Posts: 136

    Can you tell the folks with too much time on there hands or what... Bra... You can't teach an old dog new tricks, and that fella ain't the sharpist tool in the shed, should be ringing resiliently in your ears... All you need is an ugly Dodge and a three wheeled walkbehind... And high prices... It helps if you speak Latin and know a lot about plants too. Here's business 101 ... With 10,000 dollars... I go buy 4 ... $500. Dollar walkbehinds... I got 8000. For oil and belts and beer... 2 of the 4 run good any given day... I wonder around town and cut 10 lawns @ 65 per cut...that takes me 6 hours...I spend 1 hour drinking beers and hitting the other 2 with a wrench so they run too. So.... 650 a day...your helper gets 100. Plus sum beer... 300. Goes in your cigar box in the shed... And 200 goes to you old lady... This plan works for like 5 years....because I change oil/filters like a man possed... If your doing the math it went for more.....beer! Three days a week and praying for rain... Let it rain, let it pour, dear lord let the grass go sum more....
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  6. TriCityLawnCareLLC

    TriCityLawnCareLLC LawnSite Bronze Member
    from Ohio
    Posts: 1,025

    Dave, I side with Sean in that you sound very ignorant in your claims-No offense.

    I started with $0. I bought Sean's book when i first started and it helped a lot. Going into year 5 and with some work that we've already signed for next year, we are over the $100k/yr in gross revenue. At this point it's just myself and a part-time helper but I've been working all month on putting systems into place to make us more efficient and to keep costs low.

    I financed a mower half-way through my first season and once it was paid off I financed another one (just this year). Both at zero percent interest. I also believe in buying newer reliable equipment bc down-time sucks. I have two trucks and 05' and and 07'. one is paid for the other i bought this year with 62kmiles and a brand new boss plow-to me it was a dumb idea not to do, especially for the price i got on it. NOW, the truck and mower are the only debts my business has currently, and both of the machines make me enough money to pay the monthly payments and profit.

    I guess my point is to @coolluv, that I am not sitting on mounds of dough, I did start with absolutely nothing ($0) and we are at a very successful part of our business. I try to keep things as lean and mean as possible. To prove Sean's point, I am able to come in less than other guys, get the work and still profit more than they could. IT can be done and I'm trying to do it.:usflag::usflag:
     
  7. djagusch

    djagusch LawnSite Platinum Member
    from MN
    Posts: 4,225

    Based on how he figured going in house for payroll /accounting. The $200 marketing campaign is website doing it yourself (it is easier these days but remeber his background), online ads (craigs and such), article writing and submitting, seo stuff. All this a guy can do himself pretty well and not spend money for a pro to do it. But just like the accountant, how do you value your time?

    The answser of when your in a real biz goes more to when you run the biz, not being the biz.

    I think sean is basically saying he is paying himself xyz in salary. Part of those duties is managing which is sales/accounting/hr/purchasing/marketing. It doesn't matter how much time is spent in one as long as they all get done. Until the biz grows to a certain point he is very much the biz and saves money others may outsource. It works great if you can do it and still make a profit. But at a certain point one person can't wear all the hats and you need to hire for those spots which hopefully the expense spreads over more hrs which doesn't affect the rates as much.
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  8. BeachysLawn

    BeachysLawn LawnSite Senior Member
    from VA
    Posts: 271

    This post was the best on Lawnsite, period.
     
  9. Sean Adams

    Sean Adams LawnSite Gold Member
    Posts: 3,597

    Sorry I didn't respond sooner guys.

    First of all, I don't want to bash @coolluv - the more I have read through everything I think I get his overall point. No disrespect meant from me towards him.

    He is right when he says that a lot of people hop into this industry on a whim. You can't fault them all, as learning from the ground up is often the best way to learn. But that's the key point here....as long as they learn. There are plenty of people that hinder this industry because they figure out a few things and think it is clear sailing from there.

    I can't fault a solo operator who uses old equipment, his own personal truck, stores things in his garage and avoids every possible expense that he can. This is America afterall, and as long as he is falling within the confines of the law, who am I to beat him down or ridicule him?

    But....

    When it comes to this industry as a whole, yes, many changes need made. There is no barrier to entry. You can wake up, dust off your own lawnmower, print out some business cards, buy a gas can and within days (sometimes hours), bang, you're in business.

    Can an electrician or plumber do that? Not really.

    Does our industry need to do something about this? Yes, probably. Will the industry ever change in this regard? Not as long as consumers themselves have the choice of who to hire.

    Now could we insist that testing and licensing become a part of this game? I guess so, but where to begin?

    I have been thinking for some time now that creating some sort of online education for this industry makes sense - education that teaches people who are TRULY serious how to start, operate, grow and manage a respectable, professional, profitable business.

    From what I have encountered there are so many guys in this industry who are truly craftsmen - EXCELLENT at working "in" their business. They know how to do the work very, very well. The problem is, this is probably only 25% of the challenge.

    We've all seen it before, and our industry is no exception. A guy is really good at making pizza. He likes cooking. He doesn't want to work for someone else making $9 an hour, so he opens his own pizza shop. How many pizza shops are for sale right now on Craigslist? Plenty.

    Why?

    Because they know how to make pizza, but they have know idea how to run a business.

    I admire everyone in this industry for the most part, because it is a lot of hard work and usually goes unappreciated. I genuinely respect guys like @tricitylawncarellc who start with nothing, take necessary steps to educate themselves, and keep pushing forward knowing they don't know it all, but they are hungry to learn and keep moving forward knowing that in time, the hard work and sacrifice will pay off.

    I think every business owner here would be genuinely surprised if they sat down and figured out all of the waste that goes on in their business - from money spent that does not need to be spent, to inefficiencies out in the field, to bidding too low and the list goes on. Those who are continually working to improve, organize and make their business a well-oiled machine are the ones who can come in "lower" than most, still produce a quality service and make that often-elusive coin at the end.....profit.
     
  10. Sean Adams

    Sean Adams LawnSite Gold Member
    Posts: 3,597

    $200 for marketing and advertising to build a business....

    Before I begin, I'm going to say that hunger, desire and the refuse-to-lose attitude that goes along with the mere $200 is absolutely necessary.

    So it's 2013, people look for everything they want and need online for the most part, so there needs to be a presence online. You need a website.

    Wait, don't websites cost like $2,000 or something? Besides, how many people know how to build a website?

    Wait....it's easy. It's called Wordpress.

    1.) Buy a domain name for your business - $6.99.

    2.) Go to wordpress and set up a site - free.

    3.) Direct your domain name to your wordpress site - $13.00.

    4.) Get 5,000 flyers made (assuming you will make it look right and say the right things, not just a grocery list of services you provide) - $79.00.

    5.) Get 1,000 business cards made at a vistaprint.com site for $34.99.

    6.) Build your google local page - an ABSOLUTE MUST - free.

    7.) Place a business card sized ad in your local newspaper in the areas you intend to service - small newspaper - usually a once a week publication - $10.00 (weekly).

    8.) Create a facebook page for your business and actually build it and use it - free.

    9.) Email friends and family and let them know you are in business and ask them to spread the word.

    10.) Get 8 large yard signs made from vistaprint.com and strategically place them in high-traffic areas - $55.99

    Total spent $199.97

    Now I know better than anyone that it is the tendency for people on this site to go out of their way to poke holes in what I just said.

    But please read my first few sentences. With a $200 budget, you can get a lot further in 2013 than you could in the year 2005 even.

    It still comes down to your willingness and desire to get off your rear-end and do all of this - relentlessly. Passing out flyers, shaking hands, passing out business cards, telling people about your facebook page, placing signs, building your own site.... Effort.
     

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