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Commercial Crew Profitability logistics

Discussion in 'Lawn Mowing' started by Set Apart Lawn Care, Feb 3, 2012.

  1. Set Apart Lawn Care

    Set Apart Lawn Care LawnSite Member
    Messages: 192

    I am trying to gauge if I am thinking realistically about what to charge for commercial accounts. Here is what I have found my numbers to look like having a 4 man crew doing commercial accounts with me running the crew.

    3 employees = $80,000 (includes taxes, unemployment, overtime allowance etc.)

    Cost of running business = $30,000 (includes everything from ADP payroll services, general liability insurance, truck notes, equipment cost per year, cell phone, etc.)

    So it cost me about $110,000 give or take to run the operation.

    We also break our 40 hour work week into 4 ten hour days. At the few rates I've seen in Memphis, and what I currently have in my 1 contract, if the contract will gross $13000-$15,000 a year we can do 3 of these in a day. Essentially spending 3 hours at each property and 1 hour driving time (of course this an average, some some are more or less that 13-15k).

    At max capacity we can do 12 of these in our 4 day work week which would give me an average gross of about $170,000.

    So total gross $170,000 - Overhead of $110,000 = $60,000 net for my own salary and money for reinvestment. Realistically that means I would take $40-$45k a year and the rest would go into re-investment or savings.

    A step further, if I wasnt on the crew and replaced myself with a foreman who would probably cost $40,000 a year the crew would gross about $20,000.

    Do these numbers sound smart/realistic? Bare in mind that I will probably gross a little more than this because all these places have things like seasonal color and improvements not accounted for in the service contract.

    All thoughts/questions/criticisms will be greatly appreciated!
    Last edited: Feb 3, 2012

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