what is your overhead per day or per year?

Discussion in 'Business Operations' started by RSK Property Maintenance, Oct 8, 2013.

  1. JimMarshall

    JimMarshall LawnSite Senior Member
    from NW PA
    Posts: 305

    I was taught overhead is all expenses not direct job related ie truck payments, administrative salaries, electric, property taxes, etc. Not direct labor.

    Let's just say you run 5 crews and have overhead of 100,000 a year. That's 385 per day per crew. So when pricing a one day job your price would be direct labor cost + materials + equipment + overhead + profit = price
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  2. JContracting

    JContracting LawnSite Bronze Member
    Posts: 1,878

    If anyone is unsure of what overhead or anything accounting related, read "Pricing for the Green Industry".
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  3. Tyler259

    Tyler259 Banned
    Posts: 100

    Not that it doesn't make sense but a budget is much broader. I wouldn't think living expenses would be included in your business overhead. A budget sure, but Efficiency explained it well. Operating expense. At $960 a day are you saying that's what you need to live on before you make any profit? Just trying to understand where you're coming from. :)

    I think your bunching them all together. It might be beneficial to do them separately to really see the business expenses. Then add up the college and gym payments etc on a different sheet.
     
  4. JContracting

    JContracting LawnSite Bronze Member
    Posts: 1,878

    I suppose I should have separated them as opposed bunching everything together. And the $960 per day was based on 3 working days per week.
    It includes doubling payments with some expenses too, truck payment, mower payment, etc.
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  5. GQLL

    GQLL LawnSite Senior Member
    Posts: 844

    What you did was make a budget for the year to cover your living expense, not your business overhead. So when your out mowing all you are doing is pay bills and not saving a dime, and you make money on installs. We make money on any service rendered yes we have a set overhead for each day. Alot of people account for the payment on the equipment and the depreciation but most forget to account for replacement of said equipment when it is done.
     
  6. Efficiency

    Efficiency LawnSite Bronze Member
    from zone 6
    Posts: 1,519

    You're going to price yourself out of the market accounting for your costs this way. Paying down extra should come from profits. Im sure you'll keep posting whatever you want but reading one guys book doesn't make you an expert qualified to give advice like you are, especially with so little implemented experience.
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  7. djagusch

    djagusch LawnSite Platinum Member
    from MN
    Posts: 4,165

    So your budget is based off working 3 days a week but also making double payments? The other 2 days are for installs but are not a factor in the budget?
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  8. larryinalabama

    larryinalabama LawnSite Fanatic
    Posts: 16,253

    Im a solo operator, year in and year out my expenses are close to 33%. I see a lot of fellers don't include equiptment replacement but you should. I wish I could get expenses down but I really don't see how at this point in my career. I will say when Im in my 70s, Im just gonna run a small pu and cheap mowers.
     

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