Lawn Care Business Forum Lawn Care Business Book Lawn Care Business Blog Lawn Care Software
Home Forum Contract & Flyer Templates Blog Software Videos Podcast Calculators / Estimators Store Mower Review Design It Yourself Lawn Business School

Go Back   GopherHaul Landscaping & Lawn Care Business Marketing Forum > Business > General Business Discussions

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

How do you figure out what your overhead is


General Business Discussions

A place to talk about general business discussions.
Reply
 
Thread Tools Search this Thread
  #1  
Old 03-13-2013, 01:38 PM
jymie's Avatar
jymie jymie is offline
Senior Member
 
Join Date: Aug 2008
Location: Hamburg New York
Posts: 912
Rep Power: 7
jymie is on a distinguished road
Default How do you figure out what your overhead is

A lot of new business owners struggle with this and as a result many end up on the short end of business income potential. A list of things to consider when figuring your overhead, meaning the cost of you doing business would be very useful for those just starting out.

Heres some things to consider:
  • Sales Tax
    Cost of Business Insurance
    Cost of gasoline and how much you use
    Setting a side a slush fund for repairs
    Employee cost
    What your profit per job should be

I myself have used 33% markup to cover these expenditures. How do you figure your overhead cost? Do any of you have a spread sheet that helps you figure this out?
Reply With Quote

Stop guess-timating. Learn how to estimate and make money! $$$
Mow Time Estimator Lawn Care Price Estimator Mulch and Topsoil Calculator Snow Plow Estimate Calculator


  #2  
Old 03-13-2013, 02:12 PM
Caskey Lawns & Landscapes's Avatar
Caskey Lawns & Landscapes Caskey Lawns & Landscapes is offline
Senior Member
 
Join Date: Feb 2012
Location: Gettysburg PA
Posts: 282
Rep Power: 4
Caskey Lawns & Landscapes is on a distinguished road
Default

Lawn care business tipsLawn Care Business Book
I believe everyone's operating cost would be so different that there would be no way to set a standard or formula to enable this..It's one of those things that as you grow your business and complete different jobs that you will learn what you need too charge too ensure the profit...After being in business for a year or so you should be able to determine your operating cost and know what you must charge a customer...I hope I didn't miss the point here...lol...Just my thoughts..........
Reply With Quote
  #3  
Old 03-14-2013, 04:19 AM
grass guru grass guru is offline
Member
 
Join Date: Oct 2011
Posts: 43
Rep Power: 4
grass guru is on a distinguished road
Default

Its hard to set a % to things, because your operating costs for lawn service will be different from mulching, which differs from plowing, which differs from sprinklers, etc. In lawn care, I take 55% for business expenses and growth, 25% for myself, and 20% for employees (not really sure by what you mean as a markup. I have those expenses built into cost of busines averaged out over 1,200 hours. This may change as I get older, or plans change). I also pay my maintenance expenses from plowing from the lawn care fund. Mulching, I have a markup on materials, but that is a base price that is set by the supplier.
I guess I dont understand how you have a markup on a service price, where you set the base price, and expenses for it.
Reply With Quote
  #4  
Old 03-14-2013, 11:03 AM
Steve's Avatar
Steve Steve is offline
Administrator
 
Join Date: May 2003
Posts: 37,361
Rep Power: 10
Steve has disabled reputation
Default

What about things like your own personal living expenses? How important do you feel it is to include those costs in your total operating costs?
__________________
- Subscribe to my Lawn Care Marketing Blog Feed and get daily tips sent to you. Free!
Download your Free trial of Gopher Lawn Care Software.
Reply With Quote
  #5  
Old 03-14-2013, 12:12 PM
grass guru grass guru is offline
Member
 
Join Date: Oct 2011
Posts: 43
Rep Power: 4
grass guru is on a distinguished road
Default

Personal bills, and business bills are completely separate, and should not be combined for tax purposes, and to better manage money on the business side. One should know how much they need to make in their own paycheck, to make ends meet at home, but if you include your mortgage, personal car payments, home owners insurance, etc. in your overhead, Im not sure how Uncle Sam will feel about it.
Reply With Quote
  #6  
Old 03-15-2013, 11:32 AM
Steve's Avatar
Steve Steve is offline
Administrator
 
Join Date: May 2003
Posts: 37,361
Rep Power: 10
Steve has disabled reputation
Default

I understand and wouldn't suggest commingling them. It's just that in the bigger picture, if you want to survive while running a business, you need to be aware of every last cent you spend regardless of it being a personal or business expense.

If you can't pay your business expenses because you don't charge enough, your business will fail. Likewise, if you can't pay your rent or mortgage, your business will equally fail because you will have to find some other form of employment that will cover it.

So it's good to be aware of everything.
__________________
- Subscribe to my Lawn Care Marketing Blog Feed and get daily tips sent to you. Free!
Download your Free trial of Gopher Lawn Care Software.
Reply With Quote
  #7  
Old 03-15-2013, 01:36 PM
dpld dpld is offline
new member
 
Join Date: Jan 2012
Location: nj
Posts: 885
Rep Power: 0
dpld is on a distinguished road
Default

Quote:
Originally Posted by Steve View Post
I understand and wouldn't suggest commingling them. It's just that in the bigger picture, if you want to survive while running a business, you need to be aware of every last cent you spend regardless of it being a personal or business expense.

If you can't pay your business expenses because you don't charge enough, your business will fail. Likewise, if you can't pay your rent or mortgage, your business will equally fail because you will have to find some other form of employment that will cover it.

So it's good to be aware of everything.
i agree but most people confuse cost of doing business with what they should charge.

whether you are a 1 man show with a push mower or a big company with multiple employees your hourly rate per man hour should be pretty close to what everyone else charges.
the final number that the customer sees should only reflect what each company feels it will take time wise to do the job, not because this guy charges 50 per hour and this one charges 60 per hour.

the cost of doing business gets compared to what you are making to determine what your profits will be if any at all and if you need to make adjustments to your bidding by allowing more or less time on your jobs.

in my area the industry standard of what legitimate companies charge is between 65 to 70 per man hour regardless of how big your company is and your hourly rate should never have to be changed as your business grows with the exception of inflationary increases.

by establishing your hourly rate by your local industry standard rates among real legitimate companies you will never have to deal with that again unless of course inflation forces you to do so.

one of the downfalls to basing your rates based on the size of your business is that as your company grows so will your rates and all your current customers will bail on you because you keep raising your prices.
you need to charge based on customary rates so your prices stay even as your business grows with the exception of inflation.

if you start out small and base your rates on say 40.00 per hour because that is your operating cost what is gonna happen with your existing accounts when your operating costs are 60.00 per hour because your business grew and you now have more overhead?

you are either gonna have to raise your prices and risk losing your accounts or you are gonna have to bite the bullet and work for a loss.
customers understand and can except price increases as long as it is within reason like a increase of a couple dollars per cut because fuel prices sky rocket.
i have seen guys raise their rates 5 to 10 dollars per cut because of a 50 cent increase in fuel and lose their account because of it.
i have also seen guys lose accounts because when they started out they based their charges around the size of their business and when the business grew so did their prices

your hourly rate needs to be established and set in stone from day one and your costs for doing business subtracted from your income will determine your profit and if you base your prices around your cost you will have no profit.

i don't know if i made any sense to anyone but subjects like these are hard to condense in a post without being three miles long.
Reply With Quote
  #8  
Old 03-18-2013, 11:07 AM
Steve's Avatar
Steve Steve is offline
Administrator
 
Join Date: May 2003
Posts: 37,361
Rep Power: 10
Steve has disabled reputation
Default

Quote:
one of the downfalls to basing your rates based on the size of your business is that as your company grows so will your rates and all your current customers will bail on you because you keep raising your prices.
you need to charge based on customary rates so your prices stay even as your business grows with the exception of inflation.
Do you feel this is where as one grows, you either need to find services that can be priced at these higher levels or perform higher quality work that can be charged more?
__________________
- Subscribe to my Lawn Care Marketing Blog Feed and get daily tips sent to you. Free!
Download your Free trial of Gopher Lawn Care Software.
Reply With Quote
Reply

Bookmarks

Thread Tools Search this Thread
Search this Thread:

Advanced Search

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is On
Forum Jump

Similar Threads
Thread Thread Starter Forum Replies Last Post
How do you figure your cost? GreenRidge Lawn&Landscape General Talk 4 03-05-2012 01:05 PM
Need help figure out how to make a bid for lawn service JMBonesteel General Talk 14 02-01-2012 02:43 AM
Can someone help me figure the lot size? SECTLANDSCAPING Online Lawn Care Estimator - Help me bid this job 10 04-17-2011 10:22 AM
can't figure out how much to spend/which lawn mower to get. Reminisce32 Truck, Trailer, and Outdoor Power Equipment Discussion, Repairs. 11 10-23-2010 08:17 PM
Overhead!! bnclawncare General Business Discussions 21 01-23-2010 04:39 PM

» Recent Threads
  RatingTitle, Username, & Date Last Post Replies Views
Share your stolen...
SGL1
05-27-2015 09:05 PM
Yesterday 10:26 PM
by Chilehead
7 99
big job for me....need...
holymoly
Yesterday 06:15 AM
Yesterday 03:21 PM
by jrs.landscaping
3 82
What a JERK!
Chilehead
05-06-2015 08:13 AM
Yesterday 03:13 PM
by HappyGrass
16 804
5 things you would...
Steve
09-11-2008 08:53 AM
Yesterday 03:02 PM
by HappyGrass
5 2,152
Hello All
HappyGrass
05-27-2015 10:10 PM
Yesterday 02:59 PM
by HappyGrass
2 57
how to make customers...
Bradcook21
05-27-2015 05:04 PM
Yesterday 12:31 PM
by Steve
5 117
Equipment dealers
mattthelawnguy
05-21-2015 04:33 PM
Yesterday 12:20 PM
by Steve
6 208
Things your lawn care...
Steve
05-27-2015 11:48 AM
05-27-2015 11:48 AM
by Steve
0 58
I can't believe people...
ExtremeLawncareServices
05-25-2015 10:29 AM
05-27-2015 11:45 AM
by jrs.landscaping
9 260
Show us your stripes
Just for Cuts
05-21-2015 03:07 PM
05-27-2015 11:35 AM
by Steve
5 193
Pissed off customers
stonegatedesigns
05-26-2015 05:29 PM
05-27-2015 11:26 AM
by Steve
3 128
Great start to the season
jcurr33
05-25-2015 08:49 PM
05-26-2015 01:50 PM
by Steve
2 98
uploading video on here?
holymoly
05-24-2015 08:13 AM
05-26-2015 01:37 PM
by Steve
2 100
new here ! need help
pgrace
05-23-2015 11:29 PM
05-26-2015 01:35 PM
by Steve
1 116
What's your next...
Steve
05-15-2015 11:54 AM
05-26-2015 01:25 PM
by Steve
14 410
problems with a customer
LawnCareMan280
05-19-2015 06:28 PM
05-26-2015 01:22 PM
by Steve
5 231
More Rain or Less?
Steve
05-20-2015 12:06 PM
05-24-2015 04:37 PM
by SGL1
12 298
Irrigation
pboy8634
02-21-2010 12:46 PM
05-22-2015 10:05 PM
by biglee
25 8,484
Beginner Mistakes:...
Steve
01-31-2007 11:45 AM
05-22-2015 09:58 PM
by biglee
37 9,216
Peace garden ideas
SGL1
05-13-2015 03:15 PM
05-21-2015 07:51 PM
by avetslawncare
16 545
These are the days on...
ExtremeLawncareServices
01-11-2015 10:41 AM
05-20-2015 09:18 PM
by ExtremeLawncareServices
84 6,885
Total yard rehab
SGL1
04-23-2015 03:59 PM
05-19-2015 08:22 PM
by SGL1
15 841
Say Hello !!!
Steve
03-19-2007 11:18 AM
05-19-2015 04:12 PM
by NinaMarie86
1,223 390,284
New Lawn Service
carmelitaslawnservice
05-19-2015 10:02 AM
05-19-2015 02:51 PM
by Steve
1 143
Landscaper Jailed After...
SGL1
05-18-2015 08:15 AM
05-19-2015 02:37 PM
by Steve
5 244
Pictures of commercial...
avetslawncare
04-01-2015 09:47 PM
05-19-2015 02:29 PM
by Steve
38 2,049
feeling like im being...
Bradcook21
05-17-2015 07:33 AM
05-19-2015 02:11 PM
by Steve
6 254
good news yesterday
Bradcook21
05-17-2015 07:08 AM
05-19-2015 06:16 AM
by Bradcook21
3 182
ignition coil
jasonw
05-12-2015 05:31 PM
05-18-2015 12:07 PM
by Steve
3 299
Anyone need help? I have...
biglee
05-06-2015 12:22 PM
05-18-2015 12:06 PM
by Steve
13 731
Big (to me) mulch job
tl757
04-23-2015 05:32 PM
05-15-2015 08:46 PM
by biglee
22 1,538
big dog mowers?
Bradcook21
05-13-2015 04:03 PM
05-14-2015 10:55 AM
by Steve
4 325
Small HOA Bid
lxarth
05-06-2015 10:37 PM
05-13-2015 11:55 AM
by Steve
9 549
New company in Michigan
SEM
04-24-2015 09:27 PM
05-13-2015 11:51 AM
by Steve
11 674
Fired for refusing to...
Mr. Mow
05-09-2015 06:15 AM
05-12-2015 01:36 PM
by Steve
6 542
I have ZERO confidence...
Just for Cuts
05-01-2015 04:24 PM
05-12-2015 03:53 AM
by jrs.landscaping
31 1,149
landscape insurance
clarkslawn
03-30-2015 10:14 PM
05-11-2015 01:15 PM
by Steve
6 1,061
String trim BEFORE mow...
Mr. Mow
04-12-2015 08:13 AM
05-10-2015 07:50 PM
by ExtremeLawncareServices
9 1,098
Bought my first STIHL...
Mr. Mow
05-09-2015 06:29 AM
05-10-2015 08:36 AM
by Mr. Mow
9 450
advice wanted please and...
CHenricks
05-07-2015 08:40 PM
05-08-2015 04:20 PM
by CHenricks
7 472
Hello
SallyBorowicz
05-06-2015 11:14 AM
05-08-2015 02:21 PM
by Steve
3 375
Mower Advice
tl757
05-06-2015 02:31 PM
05-08-2015 01:45 PM
by Steve
6 506
Home today...Still...
biglee
05-06-2015 11:59 AM
05-07-2015 12:06 PM
by biglee
2 376
I'm Back With The Best...
aduttonater
02-21-2015 12:41 AM
05-07-2015 11:17 AM
by Steve
79 4,047
color fliers?
holymoly
04-18-2015 02:32 PM
05-07-2015 10:57 AM
by Steve
16 1,073
Looking good
mrsmichigan
05-06-2015 09:47 AM
05-07-2015 10:53 AM
by Steve
1 316
What are your biggest...
Steve
05-05-2015 01:24 PM
05-07-2015 10:52 AM
by Steve
2 372
is craiglist good to...
JBENI
04-16-2015 11:11 AM
05-06-2015 07:15 PM
by TheYardGuy
12 1,157
Go daddy web site and...
jcurr33
05-04-2015 06:00 PM
05-05-2015 11:57 AM
by Steve
2 398
How busy are you now?
Steve
05-04-2015 01:10 PM
05-05-2015 11:47 AM
by Steve
4 435
» Popular Tags
aerocore apartment bid apartment complex apartment lawn care estimate applying auger billy goat brushcutter blades blowout bush contract help curb appeal services deliquentaccounts ditches door hangers employee problems equipment rental estimate facebook flyers foreman free advertising google growing a lawn care business hiring how to husqvarna jobs john deere quik trac landscape landscape services landscaping training lawn lawn care lawn care busines plan managing a lawn care business marketing more customers business mr dave mulch new business per hour service pricing pto push versus ride running a business scag sell the vision shell small engine repair snow plowing square foot starting a lawn care business steep lawns swzt theft toro toro grand stand tractor auger trailer trailer mate pro tree trimmer rack up sell employee web design website website design winterization wood www.greenturion.co.za
Powered by vBadvanced CMPS v3.1.0

All times are GMT -5. The time now is 02:56 AM.


(C) 2011 Riggs Publications - Terms of use & Privacy Policy

All times are GMT -5. The time now is 02:56 AM.

(C) 2011 Riggs Publications - Terms of use & Privacy Policy