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Discussion Starter · #1 ·
Ok, still crunching numbers here. Thanks again for your help in previous posts, but I have another question for you. I have checked my percentage for labor in relation to income and I'm getting 36.65%. So 36.65% of my gross income is dished out in Labor. Labor includes, well, labor, payroll taxes, subs, and workers comp. Do I have a problem on my hands here or not. It seems to be a little high but I'm not sure about you other guys. I know that the solo guys are going to have great percentages - Duhh. For the rest of you guys what are your numbers. I have six employees and my self. No I did not include my salary in this percentage. Reason being that I have done little in the field this year. Trying to grow this business and boost sales in other directions, Thanks for the help in advance!
 

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I know its just moving numbers around...but I would not put subs under labor. subs would fall under contracted services or materials, it would be a direct cost, and as such that cost would be directly associated with a particular job....and affect that particular jobs profit...yes it does affect the overall business profit, but it help give you an idea of which jobs are more profitable than others


you got it easy, 85% of my budget is labor.... 20 guys full time year round....
 

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Discussion Starter · #3 ·
Man I thought I was bad off. Thanks for the tip. That being said my new percentage is 32.31%. Any body else want to chime in on what theirs is? Also my numbers might not be fully accurate because there are a few contracts that we get paid over the course of 12 months. I only calculated up to the end of July. So there are going to be a few months in Nov and Dec where payroll is decreased and Income coming in from labor that was done already. If that makes sense.
 

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32% is in the ballpark of where you want to be (for maintenance). 38% is on the high side. I think that Marc's # of 85% is from his budget, 85% of expenses are labor, not an 85% labor/gross ratio. I may be wrong in assuming this, but it appears he is doing work in house, and not really contracting...no income.
 

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Discussion Starter · #7 ·
The only thing I can see to lower this would be to.
A) Hire a few more guys at a lower hourly rate to drop some of the hours from my higher paid guys.
B) Raise prices
C) Tighten down routes and for places that are farther away only send two guys instead of four.

Scenario A seems to make the most sense, but addressing all options would be beneficial as well.
 

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You should tighten the routes anyway. Send a dedicated 2 man crew to the outter most areas.

Have 1 guy stay late and prep the mowers instead of all of them doing it in the a.m. I have my crew chief do this. He fills the mowers with gas, checks the oil. Reloads the string trimmers, fills with gas. Fills the blowers with gas. Cleans out the truck. Make sure the workers times are wrote down. Etc.

I've done a lot of great things, but one of the best is putting a 50 gallon gas can in the truck that does the lawn mowing. 15 minutes in the a.m to fill 5 gallon cans and mowers x 4 guys is 1 hour of labor. Every other day is 3 hours. Monthly is 12 hours. You get the picture. I fill the 50 gallon up once a week.

33% is a good number. You should be alright with that.

Good Luck
 

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B&B makes some good points. Here are some things we do; account manager does almost all of the equipment repair & maintenance, he fuels all of the maintenance trucks and fuel cans. Those two items alone can cost you a lot of man hours, the account manager hustles to get those 2 things done, when the guys come in in the AM all they have to do is get their clipboard, and then get in the truck and turn the key....no stops during the day.
Your crews should be 2 men, not 3 (there are exceptions). If you are doing mostly residential and have 3 man crews, stop doing that, try sending 2 men out one day they will get the same amount of work done, maybe 50-60 dollars less. String trimmer heads can be filled up while riding in the truck between accounts. Oh, route density is a no brainer.
I dont know what you pay your guys, but don't overpay your labor, at the same time, don't try to get rid of your experienced guys that you may pay well, they are worth more money, they should be producing more work. I am in the $22/hr range for a 2 man maint. crew, $33/hr for a 3 man.
 
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