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: 905
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: 3
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: 3
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 online now
Administrator
 
Join Date: May 2003
Posts: 36,501
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: 3
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 online now
Administrator
 
Join Date: May 2003
Posts: 36,501
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 online now
Administrator
 
Join Date: May 2003
Posts: 36,501
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
Sunny Beach Tennis...
SGL1
Yesterday 11:24 PM
Today 07:13 PM
by SGL1
2 69
Have you ever had to...
SouthernRootsLawnCare
07-26-2014 02:41 PM
Today 07:10 PM
by SGL1
9 1,616
Jungle to Beautiful
stevef1201
10-17-2014 09:54 AM
Today 06:44 PM
by Steve
7 280
Cheapskate Landlord...
Mr. Mow
Today 06:33 AM
Today 06:43 PM
by SGL1
5 90
Hello, from TEXAS
sanchez5
10-17-2014 09:56 PM
Today 06:15 PM
by Steve
3 214
Pressure Washing Like a...
TNTurf
08-01-2014 11:47 PM
Today 05:51 PM
by SGL1
3 545
Look out Bob Villa -...
Mr Dave
09-30-2014 10:06 AM
Today 05:42 PM
by SGL1
7 1,177
how to fi d commercial...
mchampion319
Yesterday 09:50 PM
Today 04:41 PM
by Steve
1 84
These are the days on...
ExtremeLawncareServices
03-22-2014 09:12 AM
Today 04:32 PM
by Steve
145 11,000
Hello From Tennessee
mrmann901
10-17-2014 10:02 PM
Today 04:24 PM
by Steve
1 171
questions on order to...
jack2048
10-13-2014 11:15 AM
Today 03:27 PM
by Mr. Mow
15 598
What parts do you carry...
Just for Cuts
10-17-2014 09:08 AM
Today 03:11 PM
by Mr. Mow
20 452
Organic Lawn Care...
NHray
10-17-2014 06:05 PM
Today 02:22 PM
by Steve
1 208
This sucks...
Matther777
09-18-2014 04:56 PM
Today 02:14 PM
by Steve
14 2,049
Cement mixer
KevinsLawns
10-15-2014 08:03 PM
Today 02:11 PM
by Steve
7 346
Hello ! New guy Rob here
RWorthley1
10-17-2014 04:05 PM
Today 02:09 PM
by Steve
1 189
first year update
cmdlawncare
08-12-2014 05:41 PM
Today 02:07 PM
by Steve
3 1,163
Pda
stevef1201
10-18-2014 02:05 PM
Yesterday 11:27 PM
by SGL1
2 168
Snow Blowing
gwilson98
10-12-2014 02:21 PM
10-17-2014 02:51 PM
by Steve
6 532
Spreading Weeds?
WesleySnips
07-27-2014 09:46 PM
10-17-2014 07:49 AM
by SGL1
6 836
Grasswhoopins.com Anyone...
GRASS WHOOPINS
06-21-2011 11:38 PM
10-16-2014 01:30 PM
by ExtremeLawncareServices
42 9,188
I Want to buy old...
ExtremeLawncareServices
10-10-2014 10:04 PM
10-15-2014 09:12 PM
by ExtremeLawncareServices
6 573
Say Hello !!!
Steve
03-19-2007 11:18 AM
10-15-2014 06:43 PM
by NHray
1,190 339,842
Workmans compensation...
CDLAWNCARE
10-15-2014 08:05 AM
10-15-2014 02:57 PM
by Steve
2 317
Do you find weed eating...
chuck2s
10-15-2014 02:10 PM
10-15-2014 02:10 PM
by chuck2s
0 288
Incorporating &...
WesleySnips
10-01-2014 09:39 PM
10-15-2014 01:37 PM
by kslawn
20 1,380
Falling into business
stellarmowing
09-28-2014 04:35 PM
10-15-2014 05:57 AM
by ringahding1
8 1,396
Apartment Complex and...
lxarth
06-22-2011 01:10 PM
10-14-2014 06:25 PM
by jrs.landscaping
42 9,475
I LOVE hedge trimming
stevef1201
10-13-2014 09:05 AM
10-14-2014 01:06 PM
by Steve
5 418
Help with seeder...
ExtremeLawncareServices
10-09-2014 07:39 AM
10-13-2014 08:09 PM
by ExtremeLawncareServices
5 582
The Market watch
WesleySnips
10-12-2014 08:47 PM
10-13-2014 05:40 PM
by SGL1
3 424
Help pricing a large...
Bradcook21
10-07-2014 06:49 AM
10-13-2014 02:00 PM
by Steve
7 770
leaf removal
Double J LLC
10-03-2014 04:24 PM
10-13-2014 06:46 AM
by Billy Goat
19 1,396
Acerage Rake
acrajchel
04-23-2014 07:23 PM
10-12-2014 10:53 PM
by SGL1
2 738
John Deere z235 Deck
WesleySnips
09-29-2014 06:02 PM
10-12-2014 06:20 PM
by kslawn
25 1,540
Credit card contract
SGL1
10-06-2014 05:31 PM
10-12-2014 03:40 PM
by SGL1
18 962
Truck craft dump bed...
ExtremeLawncareServices
10-04-2014 08:41 PM
10-10-2014 11:35 AM
by Steve
7 860
First Time River Rock...
berryjam
10-09-2014 06:09 PM
10-10-2014 11:08 AM
by Steve
2 518
West cost lawn prices
SGlawncare
10-09-2014 09:51 PM
10-10-2014 11:03 AM
by Steve
1 507
Question?what should I...
dalvan0
09-24-2014 11:10 PM
10-09-2014 05:58 PM
by kslawn
28 2,031
Mowing the hills
EyeCatchersNow
07-08-2014 12:22 PM
10-09-2014 04:19 PM
by Just for Cuts
25 2,887
snowplowing
jshak40
09-01-2014 07:20 AM
10-09-2014 02:21 PM
by Steve
25 3,539
Changing Scag Freedom Z...
maggiedavidson
10-06-2014 12:24 PM
10-08-2014 06:34 PM
by ExtremeLawncareServices
7 749
The most dangerous part...
Steve
10-06-2014 02:45 PM
10-07-2014 04:18 PM
by ExtremeLawncareServices
3 724
Good Mower
jack2048
10-04-2014 05:34 PM
10-07-2014 01:05 PM
by Steve
7 811
Mulching fad killing...
Tree geek
10-06-2014 08:37 PM
10-06-2014 08:37 PM
by Tree geek
0 630
Help a brother...
tbtigers03
09-28-2014 11:41 AM
10-06-2014 02:53 PM
by Steve
11 1,355
Update on LawnsAway and...
Ian Lovejoy
09-28-2014 10:24 AM
10-06-2014 01:30 PM
by Steve
4 1,223
A GREAT Story
stevef1201
10-02-2014 10:33 AM
10-06-2014 12:50 PM
by Steve
6 1,029
Kohler command carb...
ExtremeLawncareServices
09-21-2014 03:09 PM
10-03-2014 07:12 PM
by kslawn
27 2,134
» Popular Tags
4wd apartment complex article marketing auger bark bid blades bob villa care charge collections collections subcontractor decorating ditches edging employee problems equipment rental estimate exmark ferris four wheel drive fundraiser gopherhaul gravely growing a lawn care business hardscapes how much to charge husqvarna installation introduction kawasaki landscape services lawn lawn care lawn care business lawn care business seo lawn care business show lawn care business website lawn care business website seo lawn care website marketing mr dave mulch new mower past due podcast promotion pto redmax reo running a business scag search engine optimization seo small engine repair snow sprayer starting a business steep lawns steve stihl theft of services top dresser toro toro grand stand trailer trimmer rack turfgrass consulting walker wood
Powered by vBadvanced CMPS v3.1.0

All times are GMT -5. The time now is 07:43 PM.


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

All times are GMT -5. The time now is 07:43 PM.

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