New to mulching questions???

Discussion in 'Bidding, Estimating and Pricing' started by Spartan Prop Solutions, Apr 19, 2019.

  1. OP
    OP
    Spartan Prop Solutions

    Spartan Prop Solutions LawnSite Member
    Messages: 5

    My customer also said that she would try to get out in the garden ahead of me to try and get some of the prep work done for me so I might not have much prep work to do by the time I get there to do the job. Her location is on a solid flat ground and her drive way butts up to the garden so I really have no up hill battles to do, I can park the trailer almost right beside majority of the garden work that's needing to be done. Also her garden will only have 3 plants that are spaced about 4 feet apart from each other and I'm removing the rest of them which is 4 plants are being removed. Their driveway is a big long stretch from the road and opens up to their barn and farm house so Ill have no issues with getting in and out of their property to do the work. This is also my very first mulch job I have ever done and I haven't been asked to any others yet because no one knows what I can do yet, hell I have no clue what I can do yet but I guess this will be a test to see what I am capable of doing per hour to better calculate the total costs for the next one. I also am writing it up as a one charge and keeping the behind the scenes breakdown to myself.

    $360 - $106 for buying mulch with tax = $254 (overhead)
    $254 - $50 for fuel = $204 (overhead)
    $204 / 5 hrs = $40.80 / mnhr

    The $16 an hour labor fee will put me right at my $40 per hour goal. With my pricing structure I have currently laid out in my second post because I had to add a little more to each service since I didn't know at the time she wanted me to edge her garden yet or not.

    Cost of mulch per yard is $25 per yard
    Need 4 yards at $100 for 4 yards
    30% markup up of $100 dollars is $30
    $30 + $25 = $55 per yard
    $16 per labor hour on top of the already $55 per yard comes to $71 dollars per man hour per yard plus making an additional $16 dollars for my drive there and back if I'm charging for 5 hours of labor.

    Total charge for the job is around $360 dollars after I have bought my materials at a cost of $106 that leaves me with a profit of $254 dollars. I then subtracted $50 in fuel costs just to make sure I can fill up after the 68 mile round trip and fuel for my equipment used that leaves me with $204 dollars in profit. $204 dollars divided by 5 hours of work comes out to exactly $40.80 per man hour worked which was my goal.

    I'm a one man operation and I have zero employees working for me so I have no wages to pay for and insurance to pay for as I have already paid for my business insurance for the entire year already back in February with my bonus I got from my full time job. I'm merely running this company on my spare and free time to help bring in a little extra income. Plus all the while trying to stay in the budget zone of my customer also.

    Where I live though it is nothing but farm lands and my closest town to me is about 20 minutes away and my cost of living here is barely anything really because I don't live in a massive city like Chicago for instance.

    But by my math I'm technically making a $254 dollar profit before fuel expense on a 4 cubic yard mulch job. I have asked my buddy about the price you said you charge and he said that $100 dollars per man hour where we live at is extremely high and if he was to try to charge that he wouldn't be in business anymore because he would never win bids. He said for starting out $40 / mnhr is a good starting point and thats the minimum I should charge starting out while also being a one man operation. Hes been in business since 2003 so hes been in business for over 16 years. He started his company when he was only 16 when he started his company.
     
    Lowballblues likes this.
  2. BigJlittleC

    BigJlittleC LawnSite Fanatic
    from Chicago
    Messages: 6,252

    That's not profit.

    You do have an employee it's yourself. This is why a lot of solos think they can charge less and make it. You should be paying yourself a fair wage to do the work. As a solo you should get two payments. One as the laborer and one as the owner.

    As far as saying your insurance is paid. You paid it from funds from another job so your business needs to pay that back. Otherwise next year you'll have to use your bonus again. This is the same for equipment just cause you don't have to pay a note on it. You'll want to replace it one day correct? How you pay for that is including that in your overhead recovery.

    Every dollar you spent on your business has to be recovered before you even can say you have any profit.
     
    Lowballblues and TomH&H like this.

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