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: 8
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: 37,574
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: 37,574
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: 37,574
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
Sample commercial bid
burtle
Yesterday 06:02 PM
Today 10:48 AM
by Steve
1 64
Your 2015 summer review.
Steve
09-01-2015 11:01 AM
Today 10:09 AM
by Steve
4 149
SCAG Tiger Cat DECK...
rower30
08-24-2013 10:07 AM
Today 08:50 AM
by Sunpointair
15 4,978
best way to.....
Wolf4dk
Yesterday 11:35 AM
Today 06:45 AM
by Chilehead
4 79
John Deere 667a
acrajchel
08-30-2015 10:00 AM
Yesterday 07:45 PM
by Just for Cuts
5 129
Dane Scag
Steve
08-28-2015 12:29 PM
08-28-2015 12:29 PM
by Steve
0 103
24 and 50 acre cemetery...
grassmasterswilson
08-18-2015 10:09 AM
08-26-2015 02:42 PM
by Steve
13 640
Rookie business question...
WarriorLandscapingCAN
08-05-2015 05:20 PM
08-26-2015 02:33 PM
by Steve
3 437
How to clean an old...
rmccutchan
08-16-2015 05:23 PM
08-26-2015 02:31 PM
by Steve
9 460
how to make customers...
Bradcook21
05-27-2015 05:04 PM
08-26-2015 12:25 PM
by kslawn
19 3,817
Needing a website built
burtle
06-17-2015 09:02 AM
08-25-2015 11:31 AM
by acrajchel
9 2,513
Big mowing job
Bradcook21
07-30-2015 03:57 PM
08-25-2015 11:23 AM
by acrajchel
17 1,049
ZTR Review
Shark1611
05-31-2012 10:42 PM
08-25-2015 11:16 AM
by acrajchel
8 3,801
Hi Everyone
mmays29
08-25-2015 08:16 AM
08-25-2015 11:15 AM
by Steve
3 143
Should I buy this Exmark...
googus
07-03-2015 09:22 AM
08-25-2015 11:08 AM
by acrajchel
11 1,270
Old Business New Owner
Toyman
06-17-2014 08:57 PM
08-25-2015 11:00 AM
by acrajchel
16 1,651
Hi everyone! We're new...
alltrades
08-22-2015 12:46 PM
08-24-2015 10:41 AM
by Steve
2 199
CAn I get some help with...
rootytalbot
08-11-2015 06:14 PM
08-24-2015 10:36 AM
by Steve
12 596
Hi
Wemowjunction
08-16-2015 08:45 PM
08-20-2015 01:46 PM
by Steve
11 447
Drive cable bad?
SGL1
08-10-2015 11:16 PM
08-20-2015 01:41 PM
by Steve
5 405
Hey there everyone
Cole8999
08-16-2015 04:42 PM
08-18-2015 04:35 PM
by Steve
3 284
Help with a truck
bdodson89
04-27-2015 08:15 PM
08-18-2015 11:47 AM
by rmccutchan
7 1,046
I need some aeration...
rootytalbot
08-14-2015 12:32 PM
08-18-2015 07:59 AM
by rootytalbot
7 498
Say Hello !!!
Steve
03-19-2007 11:18 AM
08-17-2015 04:34 PM
by Steve
1,229 406,412
Whats wrong with this...
GreenWorx
07-28-2015 07:56 PM
08-16-2015 11:42 PM
by rmccutchan
3 630
What's your next...
Steve
05-15-2015 11:54 AM
08-16-2015 11:09 PM
by SC93
16 1,288
These are the days on...
ExtremeLawncareServices
01-11-2015 10:41 AM
08-14-2015 11:08 PM
by scaypa
95 11,546
New Biz
kufnerins
08-14-2015 05:52 PM
08-14-2015 08:56 PM
by Steve
1 236
Chemical and Fertilizer...
rmccutchan
08-09-2015 10:36 PM
08-13-2015 11:11 PM
by rmccutchan
6 444
String trim BEFORE mow...
Mr. Mow
04-12-2015 08:13 AM
08-13-2015 02:10 PM
by rootytalbot
12 2,117
Hello all thinking about...
bernie
08-11-2015 04:28 PM
08-13-2015 10:33 AM
by Steve
8 400
Logo Help Font Color
LZLC
08-08-2015 09:26 PM
08-12-2015 03:50 PM
by Steve
4 382
Pricing issue
Mr. Mow
07-07-2015 06:15 AM
08-12-2015 12:30 AM
by Jeff1
20 1,856
My new mower
Chilehead
08-08-2015 09:09 PM
08-11-2015 08:36 PM
by Chilehead
9 565
Thought this was a good...
Just for Cuts
08-06-2015 03:38 PM
08-11-2015 10:54 AM
by Steve
8 545
Plowing pricing
jcurr33
08-08-2015 04:58 PM
08-11-2015 10:51 AM
by Steve
6 554
Should I upgrade my back...
googus
08-07-2015 10:50 AM
08-11-2015 10:44 AM
by googus
7 471
Keeping it clean....
Wolf4dk
08-09-2015 11:31 PM
08-11-2015 06:34 AM
by Chilehead
7 393
I have been rude and...
biglee
06-15-2015 10:11 PM
08-10-2015 09:41 PM
by stallman419
12 2,785
Newbie Saying Hi.
LZLC
08-08-2015 09:22 PM
08-10-2015 11:20 AM
by Steve
1 281
How much do I charge to...
Chris Herrera
08-06-2015 09:30 PM
08-09-2015 11:31 AM
by biglee
2 490
scag SWZT review!
mattthelawnguy
07-23-2015 02:28 PM
08-07-2015 03:26 PM
by Steve
17 1,189
Best commercial contract...
sanlanct
08-04-2015 12:18 PM
08-06-2015 06:20 AM
by sanlanct
2 424
I came across this on a...
rootytalbot
08-02-2015 11:04 AM
08-05-2015 08:17 PM
by SC93
9 659
Help bidding a hedge...
hopolb33
08-02-2015 06:09 PM
08-05-2015 02:07 PM
by Steve
3 461
» Popular Tags
ad landscaping advertising aerocore applying bark billy goat brushcutter blowout bob villa bush contract help curb appeal services demonstration design door hangers edging employee problems equipment dealer equipment rental facebook flyers free advertising free lawn care google growing a lawn care business hiring how to hydro increase customers jobs landscape landscaping landscaping training lawn aeration lawn care lawn mowing marketing marketing secrets more customers business mr dave mulch new business ordinance per hour charge per hour service plowing pricing profit on employee roundup scag secrets to landscaping sell the vision seo shell shreaded solo solo backpack sprayer sq ft square foot swzt tree tree pics up sell employee walk behind 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 05:45 PM.


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

All times are GMT -5. The time now is 05:45 PM.

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