How Much Do Your Guys Really Cost You an Hour?

Discussion in 'General Industry Discussions' started by PlantscapeSolutions, Sep 26, 2010.

  1. PlantscapeSolutions

    PlantscapeSolutions LawnSite Gold Member
    Messages: 3,009

    Looking at your overhead expenses can be depressing. I'm figuring my four guys cost me about an extra $5 per hour when you factor in your Insurance, CPA, fuel, mowers, trucks, 941 taxes, OT, and other expenses.

    What do you think your true labor expenses are? I'm thinking I'm at around $17.32 or more per hour. This does not include the expense of my salary. The markup from mulch, planting material, landscape applications, and other materials cover my salary. If was only a mowing company I would have to add another $7.75 per man hour to cover my salary.

    A lot of these low ballers probably don't know what their true expenses are. I lost an account a while back to a guy who claimed he could do everything for 1/2 of what I did it for. The guy made me look like I was making a ton of money. I told my customers the guys numbers just didn't add up and that he wouldn't be around for long.

    Well after only a month the other guys employee all quit because they weren't getting paid crap. My customer tried one other company and finally came back with his tail between his legs. I've had this happen several times in the last year or so.
  2. old oak lawn

    old oak lawn LawnSite Senior Member
    Messages: 703

    The way i figure it my guys cost me a extra $3.00 per hour. So they cost me $12.00 per hour salary and a extra $3 for insurance,unemployment, taxes and so on. Not 100% sure on my number but the best i can do. I think most people have no idea.
  3. Texas Lawn

    Texas Lawn LawnSite Senior Member
    Messages: 262

    I think its hard to figure out when you combine fixed and variable expenses. I dont do my books that way, I do it based on variable expenses and then calculate my break even
  4. Dugann

    Dugann LawnSite Member
    Messages: 130

    $3.25 per hour is what my boys run me extra per hour.
  5. PlantscapeSolutions

    PlantscapeSolutions LawnSite Gold Member
    Messages: 3,009

    I just cut the head count by one and I'm going to really start looking at all the numbers. Today my three guys worked 28.8 man hours and generated $952 in sales almost totally from labor. That is an average sale of $33.06 per man hour. This includes a little time at the shop and of course all the drive time between houses. I'll be interested to see how the rest of the week turns out.
  6. PlantscapeSolutions

    PlantscapeSolutions LawnSite Gold Member
    Messages: 3,009

    Last edited: Sep 28, 2010
  7. TMlawncare

    TMlawncare LawnSite Bronze Member
    Messages: 1,199

    That is very good productivity. Anytime you can average over $30/man hour throughout the day is very good. Many don't realize how windshield time, bathroom breaks, loading/unloading, etc, takes its toll on obtaining a rate like this. Good post.
    Btw, my three man crew worked 24 man hours and grossed $730 today. That figures out to $30.41 per man hour. Some days are better than others.
  8. old oak lawn

    old oak lawn LawnSite Senior Member
    Messages: 703

    ooops 2............
  9. rollinrock

    rollinrock LawnSite Member
    Messages: 33

    From my experience if you don't tell each guy what you want them to do on each job, then time is wasted trying to figure out who does what. Then when one guys finishes a job hey may stand there watching the other guy work because hes not sure what to do next. But if I give each of them a list of things to do, then I get more work done.

    I can go back and ask them if they go such and such done. So each guy is responsible for his time. Rather than not knowing why a job took so long. I know who to talk to.

    I would also have each guy write down what he did for the day and estimate how long it took him to get each job done. For example, he might write - mowed front yard 1/2 hr. Trimmed hedges 20 min.

    This does a couple of things. It weeds out the time wasters. The responsible guys won't have a problem with this system. Plus it give you a measuring stick to bid other jobs.
  10. PlantscapeSolutions

    PlantscapeSolutions LawnSite Gold Member
    Messages: 3,009

    Today almost the same production as yesterday:
    29.35 man hours
    sales of $986
    $33.59 revenue generated per man hour
    $75.85 average revenue per stop

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