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General Business Discussions A place to talk about general business discussions.

how much per hour


General Business Discussions

A place to talk about general business discussions.
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  #1  
Old 06-28-2003, 09:45 PM
1manCrew
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How much should I be shooting for to make per hour gross and net? What do you shoot for?
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  #2  
Old 06-29-2003, 01:53 PM
Lawn Magic
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There are two basic ways to figure that out. The first would be a market approach. Survey some of the largest companies in your area. Ask them what they charge per hour per per man to do "x" or "y" if you hired one of there crews by the hour. That would somewhat define the upper limit of what you could charge for your services. (If your not one of the majors yet, you may want to come in somewhat less than your market's range, but not too much below).
For the second way you could use a cost plus approach. Here, start with a figure you would make doing the same thing working for another company (your opportunity cost). Add to that for payroll costs, other costs including fuel, mainenance, transportation, depreciation, taxes, other overhead and profit. Profit should provide an adequate return on what you have invested considering your risk level.
The typical range for lawn maintenance (gross charges) in my market is $30-$35 per hour per man for the major companies. What you charge may also be effected by what type of equipment you use and how productive you are with it.
Here's an example: If you charged 95% or an average rate of $28/hr for three men including yourself and paid the two men $10/hr "your" gross rate would be $84 - 20 or $64/hr. Subtracting off the opportunity cost of your time at say $14/hr. would leave $50 per hour of your time on the job for expenses and profit. (An equal amount would be left if you hired someone else to fill your hours as crew leader.)
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Old 06-30-2003, 07:06 AM
1manCrew
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After reading what you wrote, it made me think I should have gone to business school! Thanks!
This is what I am shooting for. Annual net income of $30,000. I have been trying to figure this out and have had gotten feedback from others.
If I can work for 9 months a year and then bill for 7 hours per day, 6 days a week I could bill for 1512 hours a year and if I could make a profit per hour of about $20 an hour I could do it. Thats my goal at least anyway. Maybe I should look into expanding in the future and have a crew!
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Old 06-30-2003, 11:12 AM
Lawn Magic
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Don't forget to factor in rain days or dry spells into your plan. Consider hiring one person to help you, even if it is just a part timer. It will make it alot easier to reach or surpass your annual goal, because you will be doubling your petential revenue per hour without increasing your investment in equipment or expenses too much. The key is finding enough customers to support a crew of two. I have found that part rather easy in my market, fortunately.
I carry a fourth (and sometimes a fifth) man in the spring because of excess rain days, mulching jobs, clean-ups, etc. I do the same in the fall thru mid December because the days are too short to meet all the demand for leaf removal.
Having an employee will complicate things a bit, but you can hire a bookkeeping service to help you set that up. In hindsight, not doing that on day one was one of the biggest mistakes I made starting this business.
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Old 06-30-2003, 10:47 PM
Turfscape
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I think a lot of guys when they make a business plan, they don't consider the fact that they will not be working straight through all those months. You just can't. So much can and will happen. That is why it is so tough for a solo operation unless you are in school and you live with our parents or something like that.
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Old 07-02-2003, 01:10 PM
Yardboy
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I was reading on another site where a guy was saying a solo operator can charge on the high end, $60 per hour. Is that possible?
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