Figuring out costs

Discussion in 'Business Operations' started by SullysAllSeasons, Jan 19, 2013.

  1. GreenGuysLC

    GreenGuysLC LawnSite Senior Member
    Messages: 366

    Someone here likes to Assume.... so let me clarify. I run i am NOT solo. Now....when bidding a property...i go bid based on one person.... and charge based on 60-75 pmh. In theory if one man takes an hour...two should take 30 mins. Well those of us that run crews know that isnt alwsys the case. I do find it interesting yoy say 4 guys and 30 minutes isnt worth 140 bucks. Why not? If not...i wouldnt run 4 men....sounds like the property doesnt support it. Guys....wake up. You are undermining the industry and arent profiting at the end. I am telling you... run the numbers. What is Your Operating Cost??? Can you cut for 35 or 40 pmh and make monry? No. If one of my CREWS show up and do a residential in a 1/3 acre type setting.taking only 30 mins. ...i am getting $60. That minimum. Let me further complicate your u charge the same rates for each person? If u are running crews (3 person or more). You may have to factor in the trim guys. No i dont expect to get 75 pmh on him. When i bid a property it is more to it than just how long. It is factoring in which route will it be many guys on that crew...mowers/ trimmers services we are all factors in. Bottom line... bid based on one man....and 75 pmh. That doesnt mean at the end of the day my crew made 75 pmh...but thats how i bid. And if we do job pr is 60-75...depending on machines needed. 75.....that accounting for a mowing machine. If you ask me to bid just a weed trimming job....prob be more like 50 pmh. There is no one size fits all....but u gotta understand cost...and running a mower and only getting 35 pmh ...thats whats crazy.
    Now to validate myself so cp isnt confused...6 men..three trucks. 3 exmarks lazers...1 toro walkbehind..3 walkers.
    My client list includes high end residential... also Target center...lowes x2. Rite aid x3. Zaxbys x2. Ryans. Kohls x3 (adding 4 in spring). And many many more. We work 50 hrs a week....and we do more than just cover cost.
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  2. xclusive

    xclusive LawnSite Bronze Member
    Messages: 1,054

    I know what it costs me to operate my business and make money. So when I give a price for a service I know that I am making money not losing it. Trust me I wish I could get that kind of money per man hour, but if I did charge that I would not be in business.
  3. GreenGuysLC

    GreenGuysLC LawnSite Senior Member
    Messages: 366

    If you are charging less than 50 per are not making money. Let me ask....are you struggling day to you often have trouble paying bills....or cant do the extra things you want? Do you feel pressure to get more clients? If you lose just it gonna hurt u? If so.....look at your bottom line and u can see you arent actually making money. Making money means covering your cost...paying bills...and having some left to save or spend. :
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  4. xclusive

    xclusive LawnSite Bronze Member
    Messages: 1,054

    As I stated previously I know what it costs me to operate my business, make money and/or be able to save or spend at my discretion.
  5. JContracting

    JContracting LawnSite Bronze Member
    Messages: 1,878

    That is my minimum price for an avg size lawn. What is yours?
    I agree with the GreenGuys, bidding $50/hr doesn't cut it. Ideally, I shoot for $75/man hr min., however, depending on equipment used, if it is just mowing, $60/man hr suffices.
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  6. LandFakers

    LandFakers LawnSite Fanatic
    from CT
    Messages: 6,309

    Around here I am getting $60-$65/pmh for mowing. Ill break down my costs to operate below...

    To run 2 52" machines, 1 ZTR, and 1 WB= $9.37/per hour
    Two trimmers running for an hour= $.75/hour
    Two blowers=1.26/hour
    3/4Truck=$.53/ a mile (loaded)
    One worker=$20/hour
    My wages=$25/hour
    Now to figure out what it really costs to mow. The average time for me mow a yard that I have figured to be $60 or one man hour. I have several of these properties and the average time to complete from dropping the gate to picking it up is 27 minutes. I have a fairly tight route and the average drive between properties is 1.47 miles (this is what a winter with barely any snow has given me time to do) and takes about a 5 minutes to drive to the next property in most instances. And then its rinse and repeat. So in 1 hour of running it has cost me just at $56.59 with everybody paid and me doing 2 yards at $60 a piece. So that is a profit after im paid of $63.71 which most of the time goes into marketing, repairs, and everything that it costs to run a business. And at the end of the week of full mowing the amount of leftover money after all that goes out isnt much. Im sure most of you will see the above number and start yelling at the screen but technically that is just me breaking even. Add up the additional costs to run your business and the owner of the business isnt making all that much per hour. Now if I had somebody else working for me and if sat at a desk I would be in trouble.
  7. LandFakers

    LandFakers LawnSite Fanatic
    from CT
    Messages: 6,309

    I can put put up my running costs for all my services I offer, You all should know yours because if you bidding low you can think your making good money until bill time comes around
  8. jrs.landscaping

    jrs.landscaping LawnSite Silver Member
    from Maine
    Messages: 2,764

    The first set of accounts will most likely pay $75 PMH..... The second set I don't see it. I see what you're saying about hourly labor rates vs. bidding rates, but if your crews don't make $65 - $75 PMH per day how do you figure that is your average rate over all accounts?
  9. WPLC

    WPLC LawnSite Member
    from USA
    Messages: 199

    So with a worker you are only completing 2 $30 lawns per hour? Our eco is still pretty bad here in Michigan, but $50 per hour solo and $100 an hour with worker is pretty managable. If you don't mind, could you post how you figured out cost for different services such as hedge trimming, fall cleanups, and mulch installation?
  10. Gmgbo

    Gmgbo LawnSite Senior Member
    Messages: 382

    When I first started out I thought $40 pmh was way to high. Once I got rolling I realized I wasn't making any money. My jobs are all figured at $60-$75 pmh. I don't tell the customer that.
    You really have to sell yourself and your company. Your appearance, knowledge, and expierance go a long way.

    Greenguys makes many good points in his posts.

    Why are you charging a fraction of what the hvac guy charges to come to your house?
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