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Discussion in 'Lawn Mowing' started by BrendonTW, Jan 7, 2011.
Uhhhhhhh. Uhhhhhhh. I don't dare say it. Slap me, somebody.
lol. and a mighty fine tool it is.
You have a musical instrument. too?
BrendonTW I simply used your measurments and my formula's and It is only important what the end result is when it comes to making decisions . It took 3 minutes off all your footage measurments to get a quote price . We track all of our aspects of work to the minute reguardless if its insurance or the purchasing of a new truck
I went a different direction many years ago as I am not a numbers crunching fan. Like many who have spoken, doing an "eyeball" estimate can be risky, and is primarily a tool for more experienced people. One number that I have always like to look at is the years total gross income, divided by exactly how many hours (not just production hours but every prep hour, rain days, service, etc). My total hours paid for the entire year was 8224 (4 employees plus myself) producing $493,500 in total gross. This amazingly equates out to $60.00 per each hour of payroll. If I can't live on this in this very competitive market, then I really have an internal cost control problem! Over the last ten years this per hour figure has remained reasonably constant, from a low of $57.25 to a high of $62.60.
It looks like you're averaging about $100K per employee including yourself. That's awesome. If you receive Lawn & Landscape magazine, then you're probably familiar with their annual top-150 issue which lists the top 150 landscape companies by total gross sales. They also list the number of employees. Some of these companies are only averaging $50K per employee.
My people are very experienced, paid well, treated well, never laid off, require little, if any direct supervision and in return they work a smany days as needed, as many hours as needed to get our work objectives and responsibilities accomplished.
Lesson for review--back in the 80's and early 90's we had 30 employees. The "per employee" revenue really sucked, quality control was tough, and administrative costs were very high. We started downsizing in the mid 90's, redefining what we wanted to do, eliminating a lot of traveling, and the results were we ALL make more money, stress level was reduced to near nothing, equipment doesn't disappear and is better cared for. Our customer retention rate, both residential, commercial and HOA is near 100% and we have no contracts and zero bad debt.
It's all in what you focus on! If you treat your employees very well, things just seem to fall into place in good ways.
I'd have to agree with you on the points you make. One thing I preach constantly on here is the preference of making money on profit margin vs. volume. My biggest problem is finding people who want to work. I offer a relatively high hourly pay for entry-level workers plus a 5% commission per sale--and that's off gross. $5000.00 job? The commission is $250.00. There's no reason someone could not clear $35K a year income TO START. It frustrates me to no end. I guess I'll stay solo and purchase machines to serve as crew members.
Great thread, I actually use formulas for everything. When it came to edging sidewalks I timed myself on how long it took to do 200 feet. I then added my per hour wage on that and that became the wacking price. The trick here is to really know your cost so that you are not losing money every time you pick up a weed wacker. same with fence lines per 200 ft. I charge 1 per thousand to mow and use the formulas for the weed wacking. I have now tho simplified things and just go with stop charges. 1 per thousand and say a 20 dollar stop charge or if there is a lot weed wacking say 35. This latter formula has worked really well never lost money on it EVER.
We don't pay commission to employees but do split evenly at end of year 1% of total gross plus 1% of any increase in gross over the previous year. We do this lump sum on December 20th every year. This is my 38th season. Have paid this bonus since 1991 and I think it's a good reason why my people have stayed. I'm old now, and more than ever I depend on my employees.
Finding good people is tough!