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Estimating and Billing Jobs Heavy on Manual Labor and Light on Equipment

Discussion in 'Bidding, Estimating and Pricing' started by Carolina Cuttin' Company, Jan 29, 2019.

  1. Carolina Cuttin' Company

    Carolina Cuttin' Company LawnSite Member
    Messages: 106

    I started a landscape maintenance company this September. (Not the best time, I know, but my old boss tells me things will pick up come springtime.) I mostly want to get into the "mow, blow, and go"* routine, but as I only have a handful of customers, I'm open to other small jobs in the meantime. I've blundered my way through estimating and billing for a couple of mulch-bed redos, but a question is becoming painfully clear. How do I bill for jobs that are heavy on manual labor and light on equipment usage? I usually charge $50/hr for "mow, blow, and go" because it's about the middle of the market range (in SC, at least) and people seem happy with the price. I'm a lone operator (for now) and I know I could afford to way undercut the market, but I don't want lose customers if I have to raise prices down the road. Quality is a non-negotiable for me, so I feel justified in charging more.

    *As far as I know, the term "mow, blow, and go" is courtesy of Dave Tucker:http://www.thebeautifulbusiness.com/aboutme/, http://www.cliplawncare.com/, https://clip.com/
     
  2. RedSox4Life

    RedSox4Life LawnSite Bronze Member
    from Mass
    Messages: 1,878

    When I was new in business I thought jobs like you described weren’t worth as much as mowing....,therefore I’d charge less.

    Thank god I learned better. Charge the same.
     
  3. OP
    OP
    Carolina Cuttin' Company

    Carolina Cuttin' Company LawnSite Member
    Messages: 106


    Just to be clear, if I have an 8 hour job, no power equipment, no materials, just me and a rake or shovel or something, you're saying I should charge $400 for it?

    Could you explain why you recommend that? It sort of makes sense to me, but I'm still trying to figure out why.

    Thanks.

    -Ian Bristol
    "To separate men from work is to separate them from meaning and life.” –R.J. Rushdoony
     
  4. That Guy Gary

    That Guy Gary LawnSite Silver Member
    Messages: 2,413

    A professional is paid for their skill and knowledge. Sometimes that's operating a machine, sometimes that's getting your hands dirty and just doing something well.

    When you invoice it, try to sell it as a whole product and not itemized, unless there are several major steps.

    Like a mulch job could be itemized as "Mulch - delivered and installed for $125 a yard" with "2 cubic yards installed" for a total of $250.

    You're frankly training them to think "Mulch is $125/yard, delivered and installed." and not "Is he really charging me $50 an hour?"
     
    tobylou8 and Mow-Daddy.com like this.
  5. OP
    OP
    Carolina Cuttin' Company

    Carolina Cuttin' Company LawnSite Member
    Messages: 106


    Thanks! That really helps.

    I still need a little help figuring this out, though.

    Let's say:
    I charge $50/hr for a "mow, blow, and go". Just making numbers up, let's say 30% to pay employees however much per hour, 50% equipment, fuel, transport, etc., 10% other expenses, and 10% profit. Don't know how accurate these numbers are, it's all hypothetical.

    Now, let's say:
    I charge $50/hr for digging a ditch in someone's back yard. Just me, my imaginary employees, the truck, and some shovels. So, let's say the numbers are 10% other expenses, and 5% equipment, fuel, transport, etc. If I pay the employees the usual rate (30%) and the company assumes the same profit rate (10%), where does the extra money go? The employees? The company?

    As a lone operator just starting up, I don't anyone, including myself, a cent for labor, so it's pretty simple right now. Down the road, though, I want to know how this would play out.
     
  6. prezek

    prezek LawnSite Senior Member
    Messages: 481

    You always have a labor cost. Be sure you are paying yourself a fair market wage. You can plug employees in or yourself to the equation, and it should be the same (not accounting for you being more efficient of course).

    I have never quoted anyone an hourly cost. Like mentioned above, give a price for the job as a whole.
     
    That Guy Gary and tobylou8 like this.
  7. tobylou8

    tobylou8 LawnSite Bronze Member
    Messages: 1,877

    What is the cost of your material, your time to pickup and deliver and time to actually do the work? If you're a solo operator and shoot for 10% profit, you will more than likely starve. Poverty level hovers around 20k. You'd have to bill out 200k to live in poverty. 200k is a lot of work for a solo operator. I realize few full timers work 40 hrs, but with weather and seasonal changes, nothing is like a 9-5. A solo operator should have at least a 40-45% margin just so you can eat at Olive Garden.
     
  8. prezek

    prezek LawnSite Senior Member
    Messages: 481

    He needs to pay himself a fair wage THEN still has his profit left on each and every job.
     
    tobylou8 and That Guy Gary like this.
  9. That Guy Gary

    That Guy Gary LawnSite Silver Member
    Messages: 2,413

    Exactly.

    You need to decide how much money you are going to pay yourself. Even as a solo you still have labor costs for a job even if it's just your wages.

    The figures won't ever be a fixed percentage of revenue, so instead you should set a minimum goal for profit. Let's say it's 10%. You don't need to put aside 10% of every job as profit, you need to make sure you're billing enough that there is at least 10% profit left over from every job. If that figure ends up being 20-30% on some jobs that's good!

    Wages, overhead, profit. In the beginning you'll finalize these numbers after the job and see how well you did but as you get more experience you'll be able to properly estimate them beforehand.
     
    tobylou8 likes this.
  10. TPendagast

    TPendagast LawnSite Fanatic
    Male
    Messages: 15,580

    OP you’re trying to do everything in percent instead of hourly rate.
    You’re making it more difficult than it needs to be

    The percentages are used to find your hourly rate but aren’t used to calculate every job.

    If you have equipment payments that’s in your overhead which is a percent of your hourly rate.
    If you don’t have equipment but are rather renting it
    You take your hourly rate and apply it to the job, then add the rental fee plus profit margin.

    If you have to pull weeds while your mower sits on a trailer, the mower still needs to be recovered in the cost of working.

    As you grow you can compartmentalize your overhead to different revenue streams, frequently referred to as departments or divisions.
    My gardening department is not responsible for recovering the overhead of my mower payments so hourly rate for them maybe different.
    Frequently however, gardening requires greater knowledge and typically comes with a license like pest applicator and/or master gardener, the job is typically more labor intensive and as a result the gardeners get paid more than the lawn jockeys, which means often, your hourly rates can be the same, just the money is allocated to different things (overhead recovery or payroll)

    At your stage of the game, you do not need to consider all that, your rate is your rate.
     
    That Guy Gary likes this.

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