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What is your cost per hour to run your business?

Discussion in 'Lawn Mowing' started by syzer, Feb 10, 2001.

  1. syzer

    syzer LawnSite Bronze Member
    Posts: 1,266

    What do you guys big and small calculate your cost is per hour to run your business during the season? Including insurance, equiptment, workmans comp (if applic.), maintenance, etc.? Trying to get a rought *general* idea though mine will vary much I'm sure from what is supplied here.

    Precision Landscaping.
  2. kutnkru

    kutnkru LawnSite Silver Member
    Posts: 2,662

    I think that what you are looking for is operating expenses broken down per account. This way you will get a better idea of the "nat'l avgs" to do business. If I run 6 wb and cut 300 lawns it costs me xxx dollars per lawn. Overhead will have too many variables. Am I understanding your question correctly???
  3. syzer

    syzer LawnSite Bronze Member
    Posts: 1,266

    Yes sir that would work.
  4. paul

    paul Lawnsite Addict
    Posts: 1,625

    A good way to figure this is using your fixed cost / mowing hrs or working hrs. You then can do the same for non fixed cost; workmans comp, fuel,labor, and replacement cost.
  5. kutnkru

    kutnkru LawnSite Silver Member
    Posts: 2,662

    Here is how I figure our operating expenses for services. Then I figure into account the fuel costs, maintenace repairs, new equipment purchases etc.

    I figure our bidding based upon the time it takes to complete services. This includes the following elements on top of performing the work, I call it S.T.U.D. time.

    I figure how long it takes us to "S"tart in the morning: This includes vehicle and maintenace checks, loading of equipment, and any discussions pertaining to daily schedules that may be necessary.

    The next factor is "T"ravel:
    This includes the distance between jobs for a given route, time taken if fueling is necessary, mileage to the dump, and distance to return to the shop at night.

    Then I factor in "U"nloading times. This is how much time it takes to unload the trucks and trailers for each job throughout the daily shcedules, and how long to put everything away at the shop once the daily tasks are complete.

    The final factor is "D"umping. This indicates how long it takes to remove the debris from the trucks at the dumpsite.

    Hope this helps some.
  6. mowing king

    mowing king LawnSite Member
    from ct
    Posts: 85

    it cost me $1.17 per min. to run a three man mowing crew. Overtime that crew cost $1.52 per min.

    I think that is what your looking for.
  7. syzer

    syzer LawnSite Bronze Member
    Posts: 1,266

    Great that is what I wanted. That seems high how did the figures come about if you dont mind me asking?

  8. mowerparts

    mowerparts LawnSite Member
    Posts: 110

    Do not forget to include travel time, workcomp cost, inlet marine cost (insuance on your equipment) liability insurence cost, taxes on your workers, equipment repair and parts, rent and so on....

    Cost per man hr. should be anywhere form $13.00 to $19.00 per hour depending on the per hour you pay your workers.
  9. mowing king

    mowing king LawnSite Member
    from ct
    Posts: 85

    that is a high number. i include all costs for that crew and the overhead for that crew as well as indirect labor.

    if they are on the clock for 9 hrs per day but only mow for 8 hrs. i still have to figure the cost for the unproductive time. plus billing expense and other office expenses.

    talk to your accountant he should help you with this.

    many guys in this business have no idea how to charge or what their cost are. many people think their cost are lower than they really are. Many owners don't include their own time as an expense.they just eat the time.
    i charge the company for my time, because i don't work for free. thats why i net more than most people Gross, in the landscape business. I don't mean the guys at this site because you guys are on top of things and i know many are doing great. But for the most part, many guys just don't make that much money. Because they don't know what their cost are.
  10. That dedends on the equipment you are using for that hour.

    A $10k ZTR may cost $9/hr to operate while a string trimmer may cost $1.25.

    You total cost per hour would include salary for labor and burden of employment, inital cost, fuel- maint. of equipment and a cost for fixed overhead.

    To determine fixed overhead take rent, utilities, truck payments, fuel, repairs, trailer, phone, tools, and divide by total man hours available.

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