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Discussion in 'Starting a Lawn Care Business' started by juicygrass, Sep 13, 2009.
I'm kind of new.I was wondering how to price a simple topping off of a hedge job that takes 2 hrs?
Okay, so you have already estimated how long the job should take, which is the first step. Now you need to figure out what you need to make per hour. To figure this out you will need to know your expenses, fuel, insurance, equipment, etc. Then you will need to figure out how much you would like to profit per hour. So depending on what equipment you will be using and how much travel time you will have your hourly rate should be somewhere around $40/hour (the price is very dependant on the equipment you use).
(Labor + overhead + profit) X 2
Labor meaning what you want to pay yourself per hour.
Overhead being your costs; fuel used hourly and for truck, maintenance repair and replacement cost of equipment and truck (usable life divided by expected hours of use), insurance and licensing costs (year's cost divided by working hours on-site expected in the year), wages for when you are (estimating, maintaining equipment, driving between jobs) estimated total per year divided by estimated on-site hours for the year, and hauling and dump fees (divided by hours you estimate on-site. Plus any other costs associated with storage of equipment or running of the business.
Profit is how much you want your company to make.
If you don't know these figures, any pricing you do is just a shot in the dark.
I can figure my costs, overhead, and time... Just wondering what would be a typical or reasonable amount per hour for my labor, and then how much additionally for profit. Would you just tack on a certain percentage for profit?
The amount you can charge for labor varies greatly in different regions, but I would think the minimum should be $20.00 per hour for the business owner. Remember that when you figure your labor for the job you are figuring the time you are directly involved in labor for that job. Estimating labor, drive time and other such things are covered as indirect labor in your overhead and are spread out over all your jobs.
Profit should be a percentage placed on the total cost for the job including your labor and overhead. A minimum should be 10% but like labor it depends what the market will bear.
The formula ideally should look like this:
((labor + material + tool charge + overhead) x (1 + profit margin) x hours to complete job = price
if it's just a waist to shoulder high hedge without any fancy sculpting...
I would charge at least $50 for the lower class homeowner and $60 for a wealthier customer... considering what your market will bear...
these would be ball park minimums to make a decent buck with you being the only labor involved...