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, 02:38 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, 03:12 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, 05:19 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, 12:03 PM
Steve's Avatar
Steve Steve is offline
Administrator
 
Join Date: May 2003
Posts: 36,603
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, 01:12 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, 12:32 PM
Steve's Avatar
Steve Steve is offline
Administrator
 
Join Date: May 2003
Posts: 36,603
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, 02:36 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, 12:07 PM
Steve's Avatar
Steve Steve is offline
Administrator
 
Join Date: May 2003
Posts: 36,603
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 02:05 PM
Need help figure out how to make a bid for lawn service JMBonesteel General Talk 14 02-01-2012 03:43 AM
Can someone help me figure the lot size? SECTLANDSCAPING Online Lawn Care Estimator - Help me bid this job 10 04-17-2011 11:22 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 09:17 PM
Overhead!! bnclawncare General Business Discussions 21 01-23-2010 05:39 PM

» Recent Threads
  RatingTitle, Username, & Date Last Post Replies Views
leaf removal
Double J LLC
10-03-2014 05:24 PM
Today 01:08 AM
by ExtremeLawncareServices
25 2,524
Hello from Kentucky
TRV
09-30-2014 06:42 PM
Yesterday 07:45 PM
by TRV
8 1,344
These are the days on...
ExtremeLawncareServices
03-22-2014 10:12 AM
Yesterday 07:00 PM
by ExtremeLawncareServices
176 14,160
Hi from IL
steveinil
Yesterday 02:07 PM
Yesterday 02:07 PM
by steveinil
0 35
WNY saying Hi.
Sargewesser
Yesterday 07:27 AM
Yesterday 07:27 AM
by Sargewesser
0 41
Group Buying Software as...
ferona
Yesterday 06:49 AM
Yesterday 06:49 AM
by ferona
0 41
How to: Use Thumbtack...
acrajchel
11-17-2014 06:39 PM
11-24-2014 07:58 PM
by thom
17 600
How much do you up sell...
Essex Groundskeeping
11-23-2014 07:13 PM
11-24-2014 06:29 PM
by stevef1201
8 202
This sucks...
Matther777
09-18-2014 05:56 PM
11-24-2014 05:49 PM
by biglee
16 3,227
Pressure Washing...
WesleySnips
07-31-2014 07:13 PM
11-24-2014 04:32 PM
by acrajchel
4 679
New website
Chilehead
11-20-2014 04:39 PM
11-23-2014 07:40 PM
by Just for Cuts
12 329
My site is on fronts page
tbtigers03
11-14-2014 05:58 PM
11-22-2014 10:49 PM
by Just for Cuts
16 552
Pics for website
tbtigers03
11-21-2014 05:40 PM
11-22-2014 10:01 PM
by Just for Cuts
3 180
Peco Bagger
AGPS
11-18-2014 02:20 PM
11-22-2014 05:56 PM
by AGPS
9 357
Beginner Mistakes:...
Steve
01-31-2007 12:45 PM
11-22-2014 02:42 PM
by stevef1201
22 6,223
Contract or no contract?
TRV
11-20-2014 09:18 PM
11-21-2014 09:33 PM
by TRV
3 215
Hi to you NOTHERNERS
stevef1201
11-11-2014 05:56 PM
11-21-2014 08:02 PM
by stevef1201
4 366
Billboards for marketing
ExtremeLawncareServices
11-16-2014 08:39 PM
11-21-2014 07:05 PM
by acrajchel
13 428
Belt dealer problem
googus
11-21-2014 08:45 AM
11-21-2014 06:36 PM
by Steve
2 161
Good help is hard to find
Hanks Lawn Care Services
11-19-2014 03:27 PM
11-21-2014 06:32 PM
by Steve
7 275
What is going on with...
biglee
11-14-2014 03:04 PM
11-20-2014 02:50 PM
by biglee
40 1,013
My advice for new guys
avetslawncare
11-15-2014 09:32 AM
11-19-2014 01:47 PM
by biglee
10 556
Lawn Care business...
crieg122
10-23-2014 02:23 PM
11-19-2014 12:39 PM
by acrajchel
28 1,922
raking leaves ?
robert8509
10-22-2014 10:19 PM
11-18-2014 04:24 PM
by acrajchel
14 1,507
Leaf removal
madmedic8575
10-24-2014 05:14 PM
11-17-2014 07:34 PM
by acrajchel
6 1,238
sod job
SGlawncare
10-30-2014 09:21 PM
11-17-2014 07:10 PM
by acrajchel
7 826
Customer wants me to...
Mr. Mow
11-09-2014 07:13 AM
11-17-2014 06:48 PM
by acrajchel
10 604
Hello!
Brian3137
11-11-2014 07:15 PM
11-17-2014 06:46 PM
by acrajchel
14 530
small biz in Phoenix,AZ
anthonyramos1
11-08-2014 09:35 PM
11-17-2014 05:59 PM
by acrajchel
2 370
Client won't pay...
WesleySnips
10-30-2014 03:53 PM
11-17-2014 05:37 PM
by acrajchel
22 1,439
Government contracts
avetslawncare
11-15-2014 08:50 AM
11-17-2014 12:59 PM
by Steve
2 300
Need help on deciding a...
Brian3137
11-10-2014 06:32 PM
11-17-2014 12:44 PM
by Steve
12 569
West cost lawn prices
SGlawncare
10-09-2014 10:51 PM
11-16-2014 07:54 AM
by stevef1201
8 1,657
So how do you guys...
Mr. Mow
10-26-2014 08:55 AM
11-15-2014 08:44 AM
by avetslawncare
14 1,771
Truck, Trailer,...
hawthornelawncare
12-23-2011 01:01 AM
11-13-2014 08:35 AM
by jrs.landscaping
81 31,927
The most dangerous part...
Steve
10-06-2014 03:45 PM
11-12-2014 05:05 PM
by stevef1201
14 1,751
A little hang up in snow...
stevef1201
11-08-2014 07:05 AM
11-12-2014 12:51 PM
by Steve
4 486
Bi-weekly winter...
lxarth
11-04-2014 08:37 PM
11-12-2014 10:06 AM
by WesleySnips
9 684
taking first steps...
sizemorelawncare
11-10-2014 08:24 PM
11-11-2014 01:21 PM
by Steve
1 376
Back Pack Blower
Ian Lovejoy
11-09-2014 08:41 AM
11-11-2014 08:12 AM
by Just for Cuts
4 433
Business Cards
crieg122
10-25-2014 01:03 PM
11-11-2014 07:56 AM
by Just for Cuts
12 1,384
How the unregister?
alive101
11-04-2014 07:39 AM
11-10-2014 01:48 PM
by Steve
4 656
Belt adjustment question
googus
11-05-2014 06:43 AM
11-10-2014 01:38 PM
by Steve
5 557
New parking area
ExtremeLawncareServices
11-07-2014 09:47 PM
11-10-2014 01:25 PM
by Steve
2 397
Podcast
Shark1611
11-07-2014 05:42 PM
11-10-2014 11:41 AM
by Steve
1 360
hi, from Minnesota
rjklohn
11-07-2014 02:21 AM
11-07-2014 01:44 PM
by Steve
1 377
New to snow plowing
SS.Lawncare
11-05-2014 04:00 PM
11-07-2014 01:21 PM
by Steve
6 631
New Member
tonyap
11-05-2014 10:35 PM
11-07-2014 01:15 PM
by Steve
1 419
New to the business
jcurr33
11-05-2014 03:21 PM
11-07-2014 01:11 PM
by Steve
1 472
Lines
Matther777
11-04-2014 02:19 PM
11-07-2014 12:54 PM
by Steve
1 510
» Popular Tags
4wd 4x4 aerocore apartment complex bark bid billy goat brushcutter care charge collections decorating edging employee problems equipment rental ferris foreman four wheel drive gopherhaul grass hills how much to charge husqvarna hydraulic installation introduction jobs 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 seo lawn care website lawn care website seo managing a lawn care business marketing monthly mr dave mulch ordinance past due per hour service podcast push versus ride redmax reo scag v-ride seo shreaded small engine repair snow sprayer starting a business starting a lawn care business steve sulky toro tractor auger trailer trimmer rack truck new used landscape turfgrass consulting up sell employee walk behind won't return wood wright stander rh
Powered by vBadvanced CMPS v3.1.0

All times are GMT -5. The time now is 07:22 AM.


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

All times are GMT -5. The time now is 07:22 AM.

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