1. Missed the live Ask the Expert event?
    Catch up on the conversation about fertilization strategies for success with the experts at Koch Turf & Ornamental in the Fertilizer Application forum.

    Dismiss Notice

Hourly rates?

Discussion in 'Business Operations' started by Mike Royce, Nov 7, 2012.

  1. Mike Royce

    Mike Royce LawnSite Member
    Messages: 29

    I want to know what some of you guys charge for hourly rates for your work. I've heard a lot here about adding your cost of business, and things like that. But compitition is a big factor in this question. I can charge what I want, but if i'm above everyone else, guess what? I'll loose. So in general, what do you charge per man hour to do various work? Per man hour for leaf clean up, misc. work like bush trimming, mowing, etc. I'm a solo guy with 2 60" zero's, full blown leaf clean up set up, dumping bed in truck, in business for 10+ years. Just need advice. I'm solo because I hate employees. I've tried and tried and tried.
  2. smitty's lawncare

    smitty's lawncare LawnSite Member
    Messages: 165

    i find myself in the same situation as you. i roll solo and i believe it works out the best for me. since im solo, i tend to not charge an hourly rate, what i do is give my customer a set price on everything. for landscaping, i double my material cost and guess how many hours i will take, usually charging 30 an hour, then add it up and give the customer the price. for leaf cleanup and mowing, i just give the customer a set cost. for leaves it depends on how bad the yard is usually between 50 and 175. for mowing i generally charge 30-85 depending on the size of the yard.
  3. SDLandscapes VT

    SDLandscapes VT LawnSite Senior Member
    Messages: 581

    The first question I ask both of you is what does it COST you to run your business, how much money do you want to make, and how many billable hours do you expect in a season

    You cannot establish rates or even fixed prices without this information. Most don't have good answers for this question thus ruining the trade for everyone else--there is a lot more to it than cutting grass
  4. 32vld

    32vld LawnSite Gold Member
    Messages: 3,983

    You have to know your hourly costs to determine your hourly rates. In addition you have to know the average going rates for your area and determine your salary.

    Every thing is interrelated.


    Your costs are $40 hr you want to earn $20 you need to charge $60 hr.

    But if your area rate is $50 hr then you have to figure a way to cut your costs $10 hr or accept a salary of $10 hr. Your prices will be too high and you won't get enough work to stay in business.

    Your costs are $10 hr you want to make $20 hr so you charge $30 hr. Your losing money.


    You are low balling and leaving $30 hr on the table because you are under charging.

    So you need to find out the length of your seasons by the weeks.

    Simple Example

    You do 3 weeks spring clean up, 24 weeks mowing, 3 weeks fall clean up. That is 30 weeks at 40 hr per week for a total of 1200 billable hours for the season.

    Now lets say you already own everything you need to do property maintenance.

    You may think your only costs are for liability insurance and gas.

    Liability ins $1,200 that = $1 hr cost
    Gas $100 wk @ 30 wks $3000/1200 = $2.50 hr
    5 years your truck will have to be replaced $35,000/1200 = $29 hr

    Were at $32.50 and then you have to figure in costs to replace trailers, mowers, hand helds, maitenance, repairs, etc.

    Then add your required salary and you have your total costs.
  5. NC Greenscaper

    NC Greenscaper LawnSite Senior Member
    Messages: 446

    If you are solo and have been in business for 10 years then if shouldn't be that difficult to figure it out.

    1. direct expense are your employee wages (you have none)
    2. your indirect expenses
    a. labor expenses ssi, ui, medicare, (these are a percentage, so can be added to wage cost to compute them easier.
    b. I add my workers' comp here because it cost a percent of labor. its actually overhead.
    3. Monthly overhead expenses
    a. insurance (worker's comp, liability, vehicle insurance) monthly cost
    b. fuel cost average per month
    c. office/shop rent or mortgage payment.
    d. utilities for office/shop
    e. phone/computer expenses
    f. office labor if any
    g. equipment repair average. ( a big one for me)
    h. equipment depreciation expense. (you have 2 mowers lets say 9000 each, if they last you 2500 hours and you mow 400 hours per year, then they should last 6.25 years. So your $9000 mower cost you 1440 per year/ 12 months per year and your cost is $120 per month per mower. You need to run these numbers for all your equipment.
    i. business licenses and contractors license fees
    j. shop materials, trash bags, 2 cycle oil, trimmer line, edger blades, grease, anything else you use on a recurring daily bases.
    k. anyother expense you need to do your job.

    4. Take the sum of 3 a -k. and divide it by your average monthly billable hours. Let's assume you work 30 billable hours average per week. So in a month you will work 120 billable hours. (time spent performing a service for your customer). For instance, 3 a-K are $1000 per month/120 = $8.33 per hour.

    Since you have no wage expense you need to charge$8.33 per hour to break even.

    If you want to earn $5, 000 per month and work 120 billable hours then 5000/120 =$41.67 + 8.33 per hour to make the income you desire. ($50 per hour)

    Do the math and have confidence in what your charging and why. If your competitors are charging less then you may have to adjust the amount you want to earn per month remain competitive or provide a more valuable service than your competitors.
  6. khutch

    khutch LawnSite Senior Member
    Messages: 495

    Should this figure be $5.80 per hour? ($29 / 5)
    You buying the truck every 5 years, not every year.
  7. khutch

    khutch LawnSite Senior Member
    Messages: 495

    One thing that makes me feel a little better is some costs like cell phone, gas & oil, truck replacement + insurance, FICA and some taxes, I would be paying if I were in business or not, and since I am and least they are deductible.

    Those amount to about $6 per hour.

    True cost of running the business however I understand you have to include those.
  8. grassmasterswilson

    grassmasterswilson LawnSite Platinum Member
    from nc
    Messages: 4,966

    The hard part for me to figure out was how much work can get done in an hour. As a solo i tend to work much harder because once I'm finished I'm done and can move on to book work and sales.

    You will quickly figure out that adding a second guy doesn't necessarily translate to a job taking half as long! It does decrease the wear and tear on my body so that's worth a little!
    Posted via Mobile Device
  9. zackvbra

    zackvbra LawnSite Senior Member
    Messages: 553

    leaf/debris clean up or landscaping installs,etc I charge $30/hr.. I charge $60/hr for tractor work. For "trim, mow, blow and go's" its by the job. Like to mow a half acre it can be anywhere from $30-40. I have a large 6 acre account and its $115 every week during grow season. Grass grows crazy in south georgia, no need for fertilizer!
  10. Darryl G

    Darryl G Inactive
    Messages: 9,500

    What you can charge depends a lot on the area you're in. Where I am the cost of living is high so labor rates are up there as well. I won't even pull a weed for less than $45/hour and as I add equipment my rates go up from there. I just did a search and the lowest priced house for sale in my town is currently listed at $279K. That's the lowest!!! Property tax on it is $5,278 per year. I can't be working at $30/hr, ya know.......

Share This Page