adding employees to your billing rate...

Discussion in 'Lawn Mowing' started by grassmasterswilson, Jan 13, 2010.

  1. grassmasterswilson

    grassmasterswilson LawnSite Platinum Member
    from nc
    Messages: 4,906

    I am currently a solo operator and hire a part time worker during the summer for a coupld of weeks. Over the last couple of years I have averaged around $45/hour billing rate (cosidering everything I billed out).

    What increase do you guys add to the billing rate per employee? If I pay a guy $10/hr I wouldn't add 10 to the billing rate. We will be able to get more done per hour. I may have to figure it out once I hire someone, but was just curious from anyone who have taken the next step.
  2. sehitchman

    sehitchman LawnSite Senior Member
    Messages: 911

    Your rate to the customer should stay the same with a little for inflation this year. Unless you are actually charging them by the hour, then it should be nearly double the $45 per hour you currently charge. You should be 60-80% more efficient with good help, so your account billing should be that much more to cover the labor costs. So with both of you on the job 60% of your $45 would mean you should bill at least $27 per hour for the assistant. That is way low, but should give you a start. For some reason, you can never hire anyone and get the same production as yourself. If you find that you are doing more jobs but after paying the employee you don't have anymore income. Then you are not really increasing productivity or profit. Keep in mind, with increased operation time, the equipment will wear out twice as fast also.
  3. meicher806

    meicher806 LawnSite Senior Member
    Messages: 385

    what do you charge for yourself? thats your hourly rate now double it. that's your new hourly rate. now bill accordingly.
  4. Richard Martin

    Richard Martin LawnSite Fanatic
    Messages: 14,699

    I've noticed this and given it some thought. I think the reason for it is when you have a "helper" that helper is never assigned the same task as everybody else. The helper only does trimming and then blowing the sidewalks off. If the yard takes longer to mow then it does to trim then you're wasting your helper's potential working time.
  5. Dodge2

    Dodge2 LawnSite Member
    from ottawa
    Messages: 134

    I find with a helper the greatest time savings is in mowing, ( about 90% of what i do), but I find with landscaping, leafs, mulch I am finding that each person is doing like 70% of what I do. I think most of it comes from them being paid by the hour so why would they give me 110% like I do. But if I pay by the job the work usually suffers because they don't have to deal with a angry client.
  6. JNyz

    JNyz LawnSite Bronze Member
    Messages: 1,087

    You should have a hourly billing rate for employees. If you own the company you are an employee. So if you charge $45.00 per hour for yourself, you should charge $90.00 for the two of you. Once you add up all your expenses CORRECTLY you will see you still are not charging enough.
  7. Richard Martin

    Richard Martin LawnSite Fanatic
    Messages: 14,699

    What I was trying to say is that there is a rate of diminishing returns on employees. You would think that if 1 guy can get a job done in 60 minutes that 2 guys should be able to accomplish that job in 30 minutes but it doesn't work that way. 40 minutes (or more) is the normal rate.
  8. MarcSmith

    MarcSmith LawnSite Fanatic
    Messages: 7,157

    I disagree

    you are the "supervisor" and therefore you get top billing and the highest hourly rate. then you got crew leaders, equipment operators, laborers, nose pickers ect...

    you can charge a flat rate per man hour. nothing wrong with it. But your clients may get upset when they see that you are putting such a high value on a laborers work. Just some food for thought...

    For simplicities sake though you could keep a flat rate of $45 per man per hour. so two men working for 1 hour = $90
  9. meicher806

    meicher806 LawnSite Senior Member
    Messages: 385

    That is what i was getting at, keep a flat rate of X, so 2 people working for 1 hour would be X times 2. I also agree with you that you will pay all employees less than your self. but from my experiance the employee will break twice as much crap as you so you need to have the cash flow to repair/replace beat up equiptment. or the accident," well i didnt think that would happen to there place, or i dont know how that rock got under my trimmer and went through there window."
  10. MarcSmith

    MarcSmith LawnSite Fanatic
    Messages: 7,157

    so true..... :laugh::laugh::laugh:

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