Question About Labor Cost & Estimating

Discussion in 'Business Operations' started by GreenBlade, Jul 16, 2013.

  1. GreenBlade

    GreenBlade LawnSite Member
    Messages: 216

    Right now I charge $40/hr for labor. I do $40/man/hr.

    Just curious to see how many do the same or if some just set a number and $40/hr is the labor so 2 men for 1hr would be making $20. I have been doing things this way this year (per man that is) and the prices seem fair.

    For instance I gave a guy an estimate the other day. He needed weeds taken care of in 5+ beds that were large in size. He also needed about 5 hedges trimmed of all sizes (1 small, 2 med, and 2 large). I estimated it would take 3 men about 3hrs. (very large lot I would post pics but I didnt take any) That's $120/hr. so $360 for labor alone plus the base $40 for hedge trimming, and the base $60 or so for all the beds. It came to $480 total in the estimate. Just curious to see how that sounds to y'all. He seemed blown out of the water. Then again, he did move here from California where there he had no grass, shrubs, beds, or anything. Rude awakening I suppose.

    GOATMAN GEORGE LawnSite Member
    Messages: 88

    $40 hr is way too Low. Think if you had to pay 2 employees 10$ each /hr 20/hr plus taxes like wage match, then workers.comp plus insurance. $40 doesnt Sound nice then. You need a lot more research.
  3. GreenBlade

    GreenBlade LawnSite Member
    Messages: 216

    I'm not talking about wage pay I'm talking about labor costs on a job like I mentioned above.
  4. grassmasterswilson

    grassmasterswilson LawnSite Platinum Member
    from nc
    Messages: 4,988

    So 9 total man hours at $40 per man hour = $360. I would think $40 per mh would be pretty good for just hand pulling weeds. Depending on the amount of weeds you may also consider a dump fee.
  5. truenorthlandscaping

    truenorthlandscaping LawnSite Member
    Messages: 155

    What YOU need to make is going to be unique to your operation. We average $45 - $55/man hour on site time for mowing. Grounds Maintenance type things (pruning/shearing, mulching, edging, cleanups, ie. no brainer type stuff that everyone offers & almost everyone can do), averages out to anywhere from $47 - $55/man hour after you job cost & figure in any applicable materials or direct costs (fertilizer, pre-emergent, mulch, etc.). Some of my competition, who I'm friends with & even use on a subcontractor basis, have '1 man shows', operate out of a garage (ie. low overhead), & average $32 - $35/man hour. They win all day long on certain jobs, but are very limited also. I can't worry about them, good for them, there's plenty of all sorts of work to go around. Landscaping varies from $40/man hour if it's a loser to over $80/man hour if it's a winner. However, on a lot of our landscaping projects we may have anywhere from 50 - 200 man hours tied up, whereas lot's of the grounds maintenance/cleanups/mulchings/etc. are anywhere from only a 3 - 15 man hour investment. So there's a volume/mobilization/logistics tradeoff. REMEMBER... Everything comes down to man hours. Basic job costing 101, you HAVE to know your man hours & direct costs. Overhead's an entire nuther animal. HOW you sell or what formula(s) you use will vary. A lot of it comes down to:
    A - Was the job bid right (lots of variables here - how competitive is the market you're in, is it a unique or common service, is it a 'fair' price, does the Client even know/care, etc)?
    B - Where do you need to be price wise in your area to be competitive? Who are your Clients, how educated/shrewd are they, do they even care? Do they just want it done? Are they nickle & dimers?
    C - How bad do you want that particular Client/Job/Property?

    Sometimes you need to be low to get a foot in the door, etc. A lot of times, you need to realize you can't lose what you didn't have to begin with, price fairly to yourself, & be willing to walk away. Let the lowballers have stuff. I'll forward pain in the a_ _ Clients or lowballers to my competition all day long.

    You've got to learn by doing it. Also pain & necessity are wonderful motivators! Wisdom is the consolation prize of our screw ups.
  6. sehitchman

    sehitchman LawnSite Bronze Member
    Messages: 1,002

    I was contemplating my labor rate this week. I really thought I was doing well, average close to $50 per hour and I usually try to quote my estimates thinking that I'm going to be close to the time and make $60. Then I filled up the two tanks on my truck, bought blades and did the service on three of my machines. Bought the filters, oil, sharpened about 10 sets of blades. Bought slime for two mower tires, replaced a tire on the trailer and with the heat, rain, over growing yards, nothing went even close to what I estimated. I also burnt up a good chainsaw chain cutting up a crepe Myrtle that a crazy driver missed a turn and destroyed it in a customers yard. That is the hardest stuff I've ever cut. Makes me think I made about $10 per hour this week, so I'm going to raise my quotes in the future. It will probably mean I'll do less business, but I really feel like the old dollar a minute deal is way to low if you are going to stay in this business and maintain / replace your equipment.
  7. GreenBlade

    GreenBlade LawnSite Member
    Messages: 216

    Another question: How many of you have just one set labor rate? Or do most of you have the labor rate varying by job? For instance a mulch job would vary more or less from a hedge trimming job.
  8. Snyder's Lawn Inc

    Snyder's Lawn Inc LawnSite Platinum Member
    Messages: 4,530

    I have set labor rate If Im cleaning beds or installing mulch same price.
    + equipment rate
    The guy pushing a wheel barrel make less then the guy running the bed edger
    I charge more on the guy that is running a power tool
    Wheel barrel guy making 40
    Bed edger guy making 60

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