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: 37,122
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: 37,122
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: 37,122
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
Bid for large home...
lxarth
03-22-2015 11:06 AM
Today 01:08 AM
by lxarth
10 356
Dethatching attachments
jcurr33
Yesterday 08:56 PM
Yesterday 08:56 PM
by jcurr33
0 27
Billing methods
jcurr33
03-26-2015 01:33 PM
Yesterday 05:13 PM
by avetslawncare
8 217
Covering a landscape...
Dan Tanner
Yesterday 09:01 AM
Yesterday 05:06 PM
by avetslawncare
2 68
bidding a cemetery....
NPM_LLC
03-28-2015 10:56 AM
Yesterday 01:18 PM
by jrs.landscaping
5 127
Start LIKING FACEBOOK...
rlclawncare123
02-26-2015 12:06 AM
Yesterday 12:50 PM
by SC93
3 396
35,000 Eddm
greenscaper123
03-18-2015 12:51 PM
Yesterday 12:32 PM
by SC93
19 538
Weed and Feed
robkattankate
03-19-2015 09:00 PM
Yesterday 08:42 AM
by Dan Tanner
5 480
Ferris FW35 questions
Chilehead
03-10-2015 08:31 PM
03-28-2015 03:14 PM
by Dan Tanner
5 402
First big mower decision?
SGL1
03-28-2015 08:58 AM
03-28-2015 08:58 AM
by SGL1
0 79
Employee job training...
brookline
12-15-2014 07:15 PM
03-28-2015 08:43 AM
by biglee
28 2,415
Mower vs lot size advice
jcurr33
03-25-2015 09:29 PM
03-28-2015 08:37 AM
by Dan Tanner
5 205
Finally got a warehouse
avetslawncare
03-12-2015 07:52 PM
03-28-2015 08:25 AM
by SGL1
11 546
Trepidation about...
michellemarvin
03-23-2015 07:46 PM
03-28-2015 05:35 AM
by Dan Tanner
2 184
How do you get...
ESREVER
03-25-2015 01:30 PM
03-28-2015 12:18 AM
by lxarth
7 216
I lost a long term...
Sprinkler Buddy
09-04-2011 02:24 PM
03-27-2015 11:42 PM
by lxarth
15 3,455
hoa bid need help
bigdaveha12
03-24-2015 08:29 PM
03-27-2015 11:17 PM
by lxarth
6 264
introducing myself
chris2500hd
03-24-2015 11:16 AM
03-27-2015 02:02 PM
by Steve
8 242
Commercial Jobs
CurbAppeal1
03-25-2015 04:22 PM
03-27-2015 12:29 PM
by biglee
5 210
Flag or no flag
Matther777
03-24-2015 02:41 PM
03-27-2015 12:25 PM
by biglee
10 353
Office Administration...
Girlfriend
03-26-2015 05:40 PM
03-26-2015 05:40 PM
by Girlfriend
0 475
Is this tree beyond help?
SGL1
03-22-2015 05:35 PM
03-25-2015 08:55 PM
by SGL1
14 892
Opinions on truck wrap
Trupro
02-28-2015 03:21 PM
03-25-2015 07:54 PM
by Trupro
33 1,600
The New Wave!!!! Read...
Jamesw86
03-22-2015 08:33 PM
03-25-2015 02:50 PM
by Steve
10 331
grass in the gas tank
robkattankate
03-23-2015 04:37 PM
03-25-2015 02:36 PM
by Steve
5 213
Helping others
hansenslawncare
09-15-2011 08:50 PM
03-25-2015 02:33 PM
by Steve
11 2,677
DOT Number
acrajchel
03-20-2015 05:56 PM
03-25-2015 02:28 PM
by Steve
7 458
Michelin x tweel.
apmAkron
03-23-2015 04:22 PM
03-24-2015 12:40 PM
by Steve
3 150
spike aerator???
Bradcook21
03-21-2015 01:55 PM
03-24-2015 10:32 AM
by acrajchel
4 234
Hello from Maryland
michellemarvin
03-23-2015 12:44 PM
03-23-2015 07:33 PM
by michellemarvin
2 155
hello from south GA.
CCandALawnCare
03-23-2015 03:46 AM
03-23-2015 07:06 PM
by CCandALawnCare
2 141
Say Hello !!!
Steve
03-19-2007 11:18 AM
03-23-2015 06:14 PM
by jethro
1,218 380,290
Is anyone doing mosquito...
BWild
01-27-2015 11:30 AM
03-23-2015 12:28 PM
by Steve
9 864
Should i take on this...
christw
03-17-2013 01:23 PM
03-22-2015 09:02 PM
by ExtremeLawncareServices
36 7,594
mower stalls when...
boog
03-19-2015 08:20 AM
03-21-2015 08:13 PM
by Wolf4dk
7 283
These are the days on...
ExtremeLawncareServices
01-11-2015 10:41 AM
03-20-2015 10:00 PM
by ExtremeLawncareServices
32 3,864
Hello Emily Reyes from...
Webster14829
03-20-2015 11:23 AM
03-20-2015 03:36 PM
by Steve
2 192
Finally going to give it...
jcurr33
03-12-2015 08:09 PM
03-20-2015 03:31 PM
by Steve
10 576
Weed id?
SGL1
03-17-2015 08:20 PM
03-20-2015 02:37 PM
by Steve
6 296
Mobile small engine...
luckylogger
03-15-2015 02:05 PM
03-20-2015 06:17 AM
by jrs.landscaping
15 506
Brad Cook 21
SC93
03-16-2015 10:40 PM
03-19-2015 09:04 PM
by Bradcook21
4 426
honest opinion please
uppercut
02-17-2015 01:30 AM
03-18-2015 02:55 PM
by Steve
15 1,342
Repair or replace the...
lxarth
12-17-2014 04:07 PM
03-18-2015 02:49 PM
by Just for Cuts
21 2,041
new to the site
bigdaveha12
03-17-2015 09:13 PM
03-18-2015 02:33 PM
by Steve
1 220
Small dovetail truck...
ExtremeLawncareServices
03-04-2015 06:47 PM
03-17-2015 10:14 PM
by ExtremeLawncareServices
17 880
New Site Hows it look
Infinitelawn
03-16-2015 10:32 AM
03-17-2015 08:15 PM
by SGL1
3 298
mulch questions
Bradcook21
03-08-2015 08:37 AM
03-17-2015 07:00 PM
by Bradcook21
23 1,018
Scag hydro w/b frame...
Just for Cuts
03-11-2015 03:32 PM
03-17-2015 06:37 PM
by lxarth
11 595
Buy new or used?
lxarth
12-26-2014 09:50 PM
03-17-2015 06:11 PM
by lxarth
14 1,746
New to 2015
Infinitelawn
03-16-2015 08:29 AM
03-17-2015 11:47 AM
by Steve
4 308
» Popular Tags
ad landscaping aerocore apartment bid apartment lawn care estimate applying auger billy goat brushcutter bush contract help curb appeal services deliquentaccounts design ditches door hangers employee problems equipment rental estimate facebook ferris foreman google gravely growing a lawn care business how to husqvarna introduction jobs john deere quik trac landscape services lawn lawn care lawn care busines plan lawn care business seo lawn care business website lawn care business website seo lawn care seo lawn care website lawn care website seo lawn mowing managing a lawn care business marketing marketing secrets mulch new mower per hour service pricing pto secrets to landscaping seo shell shreaded snow plowing sq ft square foot starting a lawn care business steep lawns theft toro toro grand stand tractor auger trailer trailer mate pro tree up sell employee web design website website design winterization wood wright stander rh
Powered by vBadvanced CMPS v3.1.0

All times are GMT -5. The time now is 05:08 AM.


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

All times are GMT -5. The time now is 05:08 AM.

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