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Overhead Estimate

Discussion in 'Starting a Lawn Care Business' started by Azrael, Feb 16, 2007.

  1. Azrael

    Azrael LawnSite Member
    Posts: 31

    I'm working on running numbers for my business plan. When estimating overhead, is 1/3 of your income/receipts a good number to estimate with? i'm trying to cover everything such as gas, oil, blades, mileage wear & tear, ins, etc. Basically more or less all overhead costs.

    Not sure if I'm clear so here is a concrete example:
    Total Income/Receipts for year: $60,000
    Overhead Estimate: $20,000

    THanks for your help!
  2. cleancutccl

    cleancutccl LawnSite Senior Member
    Posts: 698

    you need to actually go through all your paperwork and come up with how much you think you will spend in every category. Your fuel and maintenance costs are not overhead, they are cost per hour of machinery. Do a web search for a fillout sheet for calculating overhead that will help. You also need to estimate how much you will make this coming year to figure a percentage overhead to figure on every job. It takes time, so don't expect it to be easy, but if you want to ACTUALLY make money and not just think you make money it is a process you have to do.
  3. Azrael

    Azrael LawnSite Member
    Posts: 31

    Maybe I shouldn't have called it overhead, basically I'm just looking at ALL costs that would be coming out of receipts, minus large purchases i.e. mowers etc.

    I am just doing a business plan now, actually more like chicken scratches in a notebook to later turn into a business plan, and just would like a rough % for my scratches.

    I'll rephrase my question...In general, after someone removes all their maintenance, overhead, and miscellaneous expenses from their receipts, what percentage of the toal was that? Approx 33%?
  4. LawnRunner

    LawnRunner LawnSite Member
    Posts: 37

    I am now in my third year in the lawn care business. During my first two years I didn't pay too much attention to overhead, because frankly it would have probably scared the dickens out of me. With all the startup expenses and equipment purchases it was very high. In my first two years I considered myself lucky to just break even.

    Since this year is my third year I started thinking more about overhead. With startup costs out of the way and with just having to replace equipment during the next few years my overhead will be considerably less.

    In January I sat down and looked at my expenses and overhead versus projected income. Now take in consideration I feel I am being very conservative with my income projections. At any rate what I came up with for 2007 was 50%.

    Customers come usually just one at a time and it takes a good while to gain a good customer base. Hopefully you will be able to come by customers easier than I have. The more customers you have the less your overhead will be. This is because there are many expenses that do not change, like insurance for example.

    Just to let you know I like to look at expenses and overhead by the hour and I figure it presently runs me in the $10.00 to $12.00 range. Looking at it this way I know I have to get this out of the way before I can make any money.

    I wish you the best of luck.

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