We aren't making SQUAT for an hourly rate

Discussion in 'Lawn Mowing' started by thefed, Jun 21, 2008.

  1. thefed

    thefed LawnSite Senior Member
    from Ohio
    Messages: 350

    2 guys, grossed 11k last month, 1/2mulch and 1/2 mowing.... when you deduct ALL expenses including gas,maintenance,mulch, misc supplies, fert, office supplies, food, new equipment purchases (only $1800 this year), etc, we are making 8.50/hr each over the first 8 weeks. That number will climb as our only major expense going forward is gas...I suspect it will be climbing up there, but geez....getting everything paid off sucks....we bought a bed edger, trailer, lots of little stuff

    if we mow and have no major repairs for the next 4 months, i suspect we will be at $16/hr for the season....not too promising. we are priced as high as we can without being beaten out on every bid....

    looks like we need to trim the fat and raise prices slowly

    when you REALLY hammer out every last detail/expense, it can be disheartening
  2. Exact Rototilling

    Exact Rototilling LawnSite Fanatic
    Messages: 5,378

    Yes I agree the mowing side of my business is very iffy. Margins are very tight. Every kid with a mower is advertising $20 & $25 cuts.

    I look at it this way . . . would you rather make the same money working for someone else . . . or doing what you are doing now?

    My advice is to find a related service that isn't as exploited as mowing if at all possible.

  3. Richard Martin

    Richard Martin LawnSite Fanatic
    Messages: 14,699

    And that was the good news. The bad news is you still have to deduct 15.4% off of your $16 for your FICA "contribution". Subtract $2.46 and your making $13.54 before local, state and federal income taxes. Ouch!
  4. topsites

    topsites LawnSite Fanatic
    Messages: 21,653

    Shoo who you telling, I've been saying it for some time that all the showboating figures on this site aren't adding up at all, not even close. But at least you guys are seeing it too, this one source of my frustration.

    Don't forget to include all the time spent driving, making bank deposits and other paperwork, maintenance, shopping for parts and supplies, also in this case trimming the fat, chatting with customers and other folks, also all the research like when we spend time reading up on stuff...
    What about loading and unloading, or switching equipment, does anyone figure that into the equation?

    That's still just getting warmed up, I am sure I can come up with tons more but I'm not in the mood.
    Lunch, no, break time is free.

    But either way I'm around $5 an hour by my closest calculations.
  5. LwnmwrMan22

    LwnmwrMan22 LawnSite Platinum Member
    Messages: 4,373

    Now throw in when you have a $1,000 repair, or back to back ones like I did last week.

    You're basically working for free for the next month.

    It IS getting to the point where this job isn't as fun as it was even 5 years ago.

    FWIW, I'll gross out $16-18k / month working solo, so you'll wanna kick in some more hours with those 2 guys.
  6. Richard Martin

    Richard Martin LawnSite Fanatic
    Messages: 14,699

    I'd have to work 114 hours a week to make that kind of money. It has not, does not and will not ever happen with me.
  7. Az Gardener

    Az Gardener LawnSite Gold Member
    Messages: 3,899

    Congratulations for waking up and smelling the coffee. So why are you still in the biz?

    No seriously, what you should do is estimate how long each piece of equipment will last then divide the cost of said equipment over the # of months it will last you or how long before you plan to replace it. Do this for each and every tool you use right down to rakes and shovels. This will give you a fixed monthly number for reclaiming your equipment costs. This is budgeting you were talking cash flow. Don't forget to budget for maint and repair of the equipment too.

    Now start lookin around at the rest of the business and start applying this practice to all your expenses. This way you can do a budget and know what you need to charge to make the hourly rate you want.

    After all that damn math you will likely realize I can't charge enough to make any real money. So we return to the top "Why am I still in this biz?"
  8. LwnmwrMan22

    LwnmwrMan22 LawnSite Platinum Member
    Messages: 4,373

    The original poster stated "gross".

    The easiet number to pull up each month is "gross".

    I do full service accounts, while trying to charge 75 per hour.

    It's not that hard to charge out a $16 to $18k gross per month.
  9. White Gardens

    White Gardens LawnSite Fanatic
    Messages: 6,776

    Does anyone else think about the equity that you are establishing??

    I just see it as even though your not grossing as much as you would like, but your building your LCO into some sort of value. The real payoff I feel would be to sell it when you retire and reap the rewards then. It just sucks in the meantime.
  10. nosparkplugs

    nosparkplugs LawnSite Gold Member
    Messages: 3,444

    IMO the smaller guy who is dependant on the residential customer with disposable income is hurting. All of my accounts are paid 12 months a year, and I can budget accordingly. I was able to quite my healtcare job last October loosing some income with that too. What have you done to combat high gas price's beside whine about it? I downsized sold off my gasoline powered trucks 2 years ago invested in diesel power/ new Walker mower well before these fuel prices rose. Switching to all bagging with Walker GHS from mulching stopped our weekly mulching vistis less fuel=more$$. Let all my cheap commercial, residential customers go that complained, and were slow payers. You must take a proactive role in your future, depending on our route I only carry the Walker when possible reducing unessary equipment and weight on the trailer, I use GPS to plan our routes in advance, use fully synthetic lubricants in all our engines, dual By-Pass filtarion on our diesel truck reducing oil changes to zero. Fuel additives to increase fuel economy, I was "hyper-mileing" two seasons ago, get ahead of the curve,the resources are within your reach grasp hold and use.

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