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Any successful one man operations? When to hire?

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  • #31

    Would you say that is when you are working only or is that an average from a day that includes travel time?

    The thing that is fascinating about this topic is that to really compare, you need to compare like items to give yourself the best insight.

    For instance, say you have 4 residential customers in a day and you base your rate on $60 an hour. But each property only takes 30 minutes each.

    So in a day you are making (4 x $30) = $120.

    $120 / 8 hours = $15 an hour with residential a day.

    Then you compare that to a commercial job that takes 6 hours and you charge them $35 an hour.

    So in a day you are making (6 x $35) = $210

    $210 / 8 hours = $26.25 an hour during the day you are working commercial.

    When you take into account how much travel time can effect your overall profitability, it can make sense to take on a job that pays a lower amount per hour if you are working longer at one location, maximizing your work efficiency.

    You always have to keep in mind what your operating costs are. If you are not charging enough to cover your operating expenses along with a profit for you, it doesn't make sense to take on a job, no matter how long it keeps you working for.
    I charge this rate while on site. There is enough in this rate to cover travel times. I do include time to go get and deliver materials though as billable hours (getting mulch or picking up a piece of rental equipment for a job). This applies as long as they are in my normal service area. I do have people who want me to come out and do jobs outside of my service area, and I add in a trip charge for this. For instance, I work for a home builder who builds houses in 5-6 cities around here, but I only service 2 of the cities. If a job is outside of those two cities, there is a $50 trip charge, and he is fine with that.

    Also, not charging travel time directly helps with having a tight route. I am working on building route density this year as well, using targeted marketing. For anyone starting out, I would say to really watch travel time, it can kill your bottom line if you aren't careful. I've never seen anyone around here charge for travel time directly, but they all do it indirectly, in their rates or profit markups.

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