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 online now
Administrator
 
Join Date: May 2003
Posts: 37,460
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 online now
Administrator
 
Join Date: May 2003
Posts: 37,460
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: 37,460
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
Is it too late to do...
markty
06-16-2015 05:28 PM
Yesterday 07:34 PM
by wolfpacker53
5 1,987
I dont know what to do...
Bradcook21
06-21-2015 08:49 AM
Yesterday 07:33 PM
by stallman419
12 2,166
Should I buy this Exmark...
googus
Yesterday 09:22 AM
Yesterday 03:29 PM
by googus
3 80
Just about mid year, how...
GreenWorx
06-24-2015 07:05 PM
Yesterday 02:53 PM
by American L&T
6 1,918
another newish job for me
holymoly
06-07-2015 08:34 AM
Yesterday 02:06 PM
by American L&T
9 2,120
Unemployment rates drop,...
Steve
07-02-2015 12:40 PM
Yesterday 09:42 AM
by Steve
2 72
Before & After tree...
COREtreeservice
07-01-2015 09:20 PM
07-01-2015 09:20 PM
by COREtreeservice
0 73
Dogs
Mr. Mow
06-29-2015 02:37 PM
07-01-2015 11:28 AM
by Steve
6 1,879
Ready to learn and get...
Koley Lawn & Landscape
06-28-2015 05:16 AM
07-01-2015 11:26 AM
by Steve
8 1,870
Three Stripe Land Care...
hammr04
06-30-2015 07:19 PM
07-01-2015 11:24 AM
by Steve
1 73
Country Life Lawn Care
darleneh
06-29-2015 11:24 AM
06-30-2015 01:25 PM
by Steve
3 1,735
Rubber mulch...
avetslawncare
06-24-2015 09:28 PM
06-29-2015 09:23 PM
by Chilehead
6 1,875
Marketing ideas
xandrew245x
04-29-2014 06:35 AM
06-25-2015 07:11 PM
by GreenWorx
34 5,745
Never ending sod jobs
avetslawncare
06-05-2015 09:46 PM
06-25-2015 11:42 AM
by Steve
11 2,357
Weed and Feed Service...
mike94740
06-23-2015 05:50 PM
06-24-2015 09:56 PM
by avetslawncare
2 1,792
Trimming hedges / trees,...
Hard-Body lawn & garden
06-23-2015 07:08 PM
06-24-2015 09:59 AM
by Steve
1 1,792
Hi Everyone from Arkansas
KellyMarie
06-04-2015 04:16 PM
06-23-2015 01:34 PM
by KellyMarie
4 2,059
how to make customers...
Bradcook21
05-27-2015 05:04 PM
06-23-2015 06:36 AM
by GreenWorx
7 2,300
problems with a customer...
LawnCareMan280
06-16-2015 10:26 PM
06-22-2015 11:11 AM
by Steve
6 2,094
Please review this FREE...
markty
06-21-2015 07:42 AM
06-22-2015 11:00 AM
by Steve
1 1,813
A good commercial bid...
burtle
06-20-2015 09:09 PM
06-22-2015 10:56 AM
by Steve
1 1,880
What would you do with...
holymoly
06-20-2015 06:48 PM
06-22-2015 10:48 AM
by Steve
1 1,840
New Member just joined...
vgoleco@hotmail.com
06-19-2015 03:49 PM
06-22-2015 10:42 AM
by Steve
2 1,839
Credit Cards - What's in...
Shark1611
06-16-2015 03:04 PM
06-21-2015 07:24 PM
by Chilehead
4 1,941
Blade usage
Wolf4dk
06-16-2015 12:18 AM
06-21-2015 05:35 PM
by kslawn
4 1,946
Hello, I am new to the...
adamslawnservices
06-17-2015 08:06 PM
06-19-2015 10:28 AM
by Steve
3 1,870
First commercial bid
SGL1
06-12-2015 08:57 PM
06-18-2015 05:04 PM
by SGL1
9 2,327
Needing a website built
burtle
06-17-2015 09:02 AM
06-18-2015 11:02 AM
by Steve
7 2,022
I have been rude and...
biglee
06-15-2015 10:11 PM
06-18-2015 10:46 AM
by Steve
10 2,105
Start LIKING FACEBOOK...
rlclawncare123
02-26-2015 12:06 AM
06-17-2015 08:38 AM
by burtle
9 3,193
Customer keeps adding...
Mr. Mow
06-13-2015 06:22 AM
06-16-2015 10:23 AM
by Steve
11 2,333
Pass discounts onto...
burnell76
06-03-2015 06:33 PM
06-16-2015 10:02 AM
by burnell76
3 2,041
burned grass only where...
nhauto
06-15-2015 05:28 PM
06-16-2015 09:45 AM
by Steve
2 1,908
Half year mark review.
Steve
06-02-2015 11:24 AM
06-15-2015 01:04 PM
by Steve
18 2,644
These are the days on...
ExtremeLawncareServices
01-11-2015 10:41 AM
06-15-2015 01:01 PM
by Steve
86 9,706
New Member
Bruce Fehr
06-05-2015 07:13 PM
06-15-2015 12:53 PM
by Steve
6 2,044
New to the business,...
CarefreeMowing
06-12-2015 02:36 PM
06-15-2015 12:50 PM
by Steve
1 1,927
Beginner Mistakes:...
Steve
01-31-2007 11:45 AM
06-13-2015 08:48 AM
by holymoly
45 12,028
New to the forum, new to...
CarefreeMowing
06-11-2015 12:35 PM
06-12-2015 10:44 AM
by Steve
2 1,843
problems with a customer
LawnCareMan280
05-19-2015 06:28 PM
06-11-2015 10:50 PM
by stallman419
8 2,400
Website Review
Outdoordesignsknox
06-08-2015 08:44 PM
06-11-2015 09:48 PM
by Just for Cuts
13 2,290
Anyone need help? I have...
biglee
05-06-2015 12:22 PM
06-10-2015 01:45 PM
by holymoly
15 2,986
Hello from the GREAT...
gbfarmsllc
06-09-2015 11:10 AM
06-10-2015 01:29 PM
by Sprinkler Buddy
2 1,911
Hey guys and gals, I'm...
Joeyhall
06-03-2015 03:54 PM
06-08-2015 02:15 PM
by chris2500hd
8 2,158
Mowing Bermuda...
Mr. Mow
06-02-2015 12:45 PM
06-08-2015 12:45 PM
by Steve
12 2,317
Hey Guys
PrattLandscaping
06-07-2015 06:37 PM
06-08-2015 12:23 PM
by Steve
2 1,926
Share your stolen...
SGL1
05-27-2015 09:05 PM
06-08-2015 11:54 AM
by Steve
25 2,876
Hello there My name is...
zwalk1839
06-04-2015 11:10 PM
06-08-2015 11:52 AM
by Steve
4 2,040
Laid off oil field...
Mr. Mow
05-30-2015 09:03 AM
06-08-2015 06:20 AM
by Mr. Mow
4 2,154
How do you find one time...
Greg'slawnandlandscape
06-02-2015 09:57 PM
06-05-2015 09:49 PM
by avetslawncare
4 2,070
» Popular Tags
ad landscaping aerocore apartment bid apartment complex apartment lawn care estimate applying bark billy goat brushcutter blowout bob villa bush collections contract help curb appeal services deliquentaccounts design ditches door hangers edging employee problems equipment dealer equipment rental flyers foreman free advertising google growing a lawn care business hardscapes hills hiring husqvarna increase customers jobs landscape services landscaping landscaping training lawn aeration lawn care lawn mowing marketing more customers business mr dave mulch new business ordinance past due per hour charge per hour service plowing profit on employee push versus ride scag scripts sell the vision seo shell small engine repair snow plowing sq ft steep lawns swzt trailer tree tree pics trimmer rack up sell employee web design website website design www.greenturion.co.za
Powered by vBadvanced CMPS v3.1.0

All times are GMT -5. The time now is 01:22 PM.


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

All times are GMT -5. The time now is 01:22 PM.

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