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Overhead Costs


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Old 04-24-2013, 06:43 PM
xandrew245x xandrew245x is offline
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Default Overhead Costs

I am trying to figure up what my weekly operating costs would be if I had a truck, trailer, commercial mower, blower and string trimmer. How would I go about this?

This is what I think, but I am not sure.

I am factoring in the total price it would cost to buy a truck, trailer, etc and factoring in how long it would be good for before needing replaced. Say I bought a truck with around 30k miles. With my routes I could probably keep that truck for an easy 5 more years without running into big enough problems that it would need replaced. Said truck is bought for 20k, so to find the weekly cost for a truck I would take the 20,000 divided by 1825 days (5 years), and that would give me the weekly cost to replace a truck. Is this the way I should do it, or should I estimate my overhead as if I would have to replace it every season?

thanks in advance.
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Old 04-24-2013, 07:30 PM
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your on the right track,but you would of figured out a daily rate not a weekly one ,your also forgetting the trucks upkeep and repairs ,interest on your loans ,insurance ,and many many more things .I would also cost it out over a shorter duration ,say 3 or 4 years instead of 5 ,its good to have a little breathing room when your equipment is nearing its end so you can sock away a few bucks in order to purchase another machine when its time .
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Old 04-24-2013, 07:47 PM
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Okay, so I have attached a spreadsheet of my overhead costs.
The truck, mower, trimming, blower and trailer are spread out over 36 months, all other costs on the spread sheet are based on yearly.

The gas figure is an estimate based off of gas my mower could use an hour and gas I would use on an average day driving (I estimated 40 miles per day) came out to around 3 gallons of gas an hour.

I think I got everything, not 100% sure though.
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File Type: pdf Untitled spreadsheet - Sheet1.pdf (30.9 KB, 45 views)
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Old 04-24-2013, 08:41 PM
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not everything has the same life expectancy ,a whipper to me has to be paid off in a season ,simply because they run out of warranty and with the fuel problems and 4mix issues nowadays theres a chance they get chucked in the pile instead of repaired ,same goes for a cheap pushmower .I am not saying that either only lasts a year ,just that after the warranty runs out its a toss-up weather or not I am going to fix something that only cost $400.00 to replace with new .
I have a few trailers that are 10 years old ,pretty much good basic maintenance is all they have received ,I know they were quality built to begin with ,so your mileage may vary .
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Old 04-24-2013, 10:04 PM
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One very important thing I dont see on there is labor cost. Even if you dont plan on growing large enough to hire someone, you have to figure what that would cost. After all you dont want to work for free do you?
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Old 04-25-2013, 12:03 PM
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Are you looking to calculate your operational costs too or just your overhead costs?

Overhead costs would be costs you have to pay even if you are not working that day.
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Old 04-25-2013, 04:33 PM
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I am just really focusing on overhead cost. I just threw a gas estimate in there to see what I came up with, but gas is more of an operational cost, same with labor.

My operation costs change from customer to customer, and will be determined by how long it would take me to do said job, how much would be payed to a helper at said job, travel time and distance etc. etc. This would all be factored together to come up with the price I need to charge to still make a profit.

I was thinking of coming up with some kind of calculator that would factor in overhead cost, operational costs and would determine a price depending on size of mowable area, amount of feet that needs trimmed, terrain type, travel distance and then would spit out a quote for said yard.
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Old 04-28-2013, 07:25 AM
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I was thinking, since I only do this part time, should my equipment in theory last twice as long?
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Old 04-28-2013, 03:48 PM
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Quote:
Originally Posted by Steve View Post
Are you looking to calculate your operational costs too or just your overhead costs?

Overhead costs would be costs you have to pay even if you are not working that day.
very important distinction you made.
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Old 04-29-2013, 11:32 AM
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Quote:
I was thinking, since I only do this part time, should my equipment in theory last twice as long?
Each piece of equipment will have a life expectancy. So yes, you use it half as much, it would last longer, but I don't know if it will make it twice as long. Over time, everything wears out more and more.

Have you played around with these lawn care business calculators yet?
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