One thing I've learned about people in the lawn care business is that they really seem to be generous people. I believe this is a powerful tool that can give you a real competitive advantage, and instead of keeping it to yourself and letting other people figure it out for themselves, you've freely shared it. Man, I appreciate it.
I’m over a year late with this comment but this is one of the best videos showing these pricing strategies, so I’m investing my time to make this more valuable for other guys calculating overhead vs profit margin. That said, you made a few mistakes. I’m posting this comment so others use the right math for their overhead vs pricing strategies for accuracy FICA taxes are split between employer / employee. About 7.5% each. Hourly rate at your calculations would be $18.11, however some costs would be pulled from the employee’s payroll. It’s not all that different, but makes a difference over many hours per year. In your vehicle calculation, despite the vehicle cost being extremely low and fuel economy extremely high, your annual figure is wrong. A $10k vehicle over 5 years is about $2k per year. Annual maintenance and fuel at your suggested cost of $1k and $2k, respectively, brings you to $5k / year (which is double your calculation). In your “hourly cost”, you are actually calculating cost per mile (with cost of your time omitted). $0.26 / mile, translated to “$1.30 / hour” is actually $1.30 per trip (time unknown at this point, but assuming 8-10 minutes between accounts at 35 mph average local speed.) Would be $1.30 in fuel & misc. maintenance costs PLUS travel time. The number is closer to $10 per trip with time & equipment / fuel costs considered. Covering your costs PLUS REPLACEMENT requires additional cost calculations; not just overhead. Your figure breaks even but does not allow any surplus earnings for vehicle / equipment replacement down the road unless your equipment significantly outlasts your predictions. You can’t run a business based on assumed / borrowed time. Mower / equipment: your annual cost with fuel / maintenance is $1,750 or $3500 over 2 years (and realistically much higher with professional-grade equipment). You didn’t repeat annual fuel / maintenance spends in your calculation. Cost / hour for mower at these rates = min of $3.50 Despite these objections, you do a great job highlighting most of the important categories needing to be considered by other business owners. I pay my own lawn crew about $70 / week to service (mow, trim, edge, & blow) a 30,000 sq ft. lawn. They show up with 3-4 guys, are on site for no less than 30 minutes (or 1.5-2 man-hours) and have to unload / reload equipment before heading to next stop. I’d be willing to bet they are losing money on my property, even with undocumented workers. There’s no reality where you can bill ~ $17.50 / man-hour, pay your staff, equipment costs, insurance, etc. and still remain profitable. With realistic minimum figures considered ($50k for truck / trailer, $8-12k in equipment with a few years of life expectancy and factoring in costs AND REPLACEMENT, rising fuel and insurance costs, rising labor costs, etc) it’s arguably impossible to be profitable in this business without being a full-service landscaper and offering several other services to your book of business. I’d be willing to bet the most efficient landscaper with a self-run lawn service ONLY operation is earning less than $50k / year before taxes if operating at $60 per hour and that doesn’t leave room for reinvestment, hiring of staff, advertising, etc. Not to mention you won’t get every job you bid at these hourly rates. Now all of this said, everybody’s overhead is different and local markets dictate different going rates. I’m speaking from my experience both as a customer and business owner in a New Jersey market. I’m curious to know yours and others’ hourly operational costs based on a 10 hour day / 5 day week / 30 week season in various markets.
You told it like it is. Good job!. Being in business takes disipline. It take awareness of your bottomline. Just because you want to make $60 or more an hour don't mean you will. It's customers customers and more customers that will get you to that goal. Hey! If it was easy, everyone would be doing it too.
Peace and Love! I don't normally leave a comment on video but I have to say this was the best video for pricing by far that I have ever scene. I appreciate the thorough breakdown. Great information and much needed.
This is excellent. I just took over an existing lawn service, and it's been years since I went to business school. This is precisely what I needed to get past breaking even plus 5% every month.
Awesome. Just keep in mind that this is not all inclusive and I recommend you buying that worksheet from Profits Unlimited to help you determine what your pricing should be.
@@QuietLawn we wrote everything down following the video and realized we were close to the right hourly, but couldn't account for some losses, so we went ahead and bought it. Going to use it later today to punch in the numbers and figure out where we went wrong.
Listen to this video!! Micheal introduced me to this spreadsheet and it’s been a game changer!! Even when I bought the sheets I still didn’t want to do it. But I gave it a shot; finally and 🤯!
Hey thanks for the video I've been watching it several times to get my things in order. I did notice when doing calculations though that the vehicle "total annual cost" is incorrect. It should be $5,000 instead of $2,600. You divided the 1) fuel cost and 2) insurance/repairs by 5 years but those were already annual calculations. The $10,000 truck cost divided by 5 years is $2,000 then add $2,000 fuel and $1,000 insurance/repairs = $5,000 total annual vehicle cost. $0.50 per mile and $2.50 per hour.
Marker board hack: store your markers with the caps pointing down. That way the tip always has adequate ink. When you store them with the cap facing up, they don't write well, and they run out easily.
This might be a silly question but how did you get $19.05 on the direct labor? I really wanted to get this to have a better understanding of pricing. thanks!
Now I had to subscribe because I really got value out of this video. Thank you very much sir.🙌 I'm watching from Nigeria, I'm quite a beginner into lawn business. And this video is going to help me a lot.
GREAT explanation .... You need to write a book called "Know your Numbers for Dummies." I had to learn by trial and error... sure could have used this video a few years ago. Stay safe and God Bless from Texas.
So did I until I found this. We're working on an app that can help walk people through this process and arrive at their number. Thank you for watching.
So informative!!! Wow, we calculate by the minute, mower burn rate, employee burn rate, trimmer etc. then add the price of future equipment like you said asset recovery
I have a bachelor in business management, I have also been in business in lawn mowing for 7 years. Just saying this so you can vet my knowledge and experience. But I’ve never seen vehicles and tools as a part of the direct costs category. Let’s take a vehicle for example. You have to buy it whether you have 1 client of 100 clients. As such, it is a fixed cost. On the contrary, the fuel you put in it is a direct cost because it is directly correlated to the amount of work you have. You will pay way more for fuel if you have 100 clients than if you have only 1.
Why wouldn't it be a direct cost that is directly used up based on use just like fuel? Does the amount of use not directly relate to the life of the equipment and the cost recovery needed to replace it during that life?
@@QuietLawnVehicles are fixed cost bc you are paying for it regardless of having a customer or not. variable expenses are directly related to producing work. Your vehicles and equipment is fixed expenses and likely and asset that is expensed out over the life time. (Depreciated). This allows you to have a write off over the lifetime of an expensive resource.
How would this equation work with P4P, this has been biting my tongue for many weeks and idk how to calculate that as P4P is a percentage of the labor revenue. Please make an updated video for P4P I beg of you! 🙏
Good question. P4P will not affect this. If you are selling budgeted hours of time and you've calculated in what your crew should for each of those budgeted hours here, than it won't affect this. I'll try and make some kind of video explaining.
Yes, it's applicable to any service business. Nothing specific to mowing. We have sheets for all of our services as each has different costs. The only thing universal across all services is the overhead percentage that you add as these costs are spread over all of your services.
did you switch from Ego brand trimmers to another brand I am looking to change out some of my equipment to battery and I am wanting your thoughts on what brands you are recommending please let me know that would be great.
and I am not in the market yet to purchase a backpack battery the cost up front for me is to expensive I am currently using an ego blower and a greenworks pro weed trimmer and i am not liking the weed trimmer just because it lasts about maybe three lawns and the battery needs charged I know i dont have the bigger battery just need some insight and some professional opinions on what trimmer I should go with.
We are using something new since last year and I think we'll be able to share very soon. Makita and Milwaukee are good options if you need something asap. Ego as well.
@@QuietLawn you might laugh but I went ahead and bought cordless from Harbor Freight Atlas brand I did some research and found that the same company who makes atlas brand makes Green Works and a couple of other brands cordless weed Trimmers so I went the inexpensive route to see how like it and so far so good Atlas actually lasts an entire day on 2.5 amp battery 80V and will last 45 min continuous use to me not bad but I am hoping to see what you will be sharing on what you are using Soon
Last year I priced jobs at $ 70.00 per hour and paid 30 % to the employee who averaged $21.00 per hour. This year I am pricing jobs at $80.00 per hour and 30% to the employee doing the lawn care job so he will average $24.00 per hour. I am in Canada and minimum wage is $15.00 per hour. Imo you should be paying 30% of gross sales to the employee doing the job and 70% of gross sales to my business. The fixed costs are what they are. Kiss Keep it simple stupid. This all works great for me and is simple. I also allow 6 minutes average driving time for each account. 12 subdivision cuts a day x 6 minutes equals 72 minutes a day of driving time .
When you are referring to total revenue, do you mean total revenue just for the specific service your are calculating, or TOTAL revenue for the year from all services you offer combined?
Total revenue Cyrus. Again, if you're trying to get an accurate number, you need to spend the money to buy the spreadsheet in the description. There are many details left out in this example.
@@QuietLawn Thanks for the clarification Mike! I might just do that, but I already have an exhaustive list all of my direct and indirect expenses laid out in google sheets already so I think I can probably get away with coming up with my own spreadsheet to track this. My last question for you is how does this change once you switch to P4P, do you just take your average hourly rate for your one person mowing crews and plug that into the direct cost formula?
@@QuietLawn Hi Mike, I finally made the time to buy the spreadsheet and have been calculating it to calculate the costs for various setups. I'm wondering if you have any suggestions on how much additional "overhead" as a percentage you put in to account for the cost of mulch?
You are most likely double dipping with your SBA loan. Was that loan used for equipment, vehicles and so on? So generally the only thing you would consider with the SBA loan is any interest and fees.
At 5:32 you talk about the "owner salary" in connection with office work and you state that you should not "double dip" so you don't factor that time into your overhead calculations. You would be incorrect here as you should establish an hourly rate for whatever work you do in the office, whether that be invoicing, bookkeeping, purchasing, or any other indirect cost task for that time. You will eventually have to pay the individual that takes over these tasks, so you should factor the cost of those tasks into your pricing formula. You don't have to use the same "hourly rate" as you do for when you are out in the field doing production work, but you certainly should factor some "rate" into each hour of work you perform for your business. Otherwise, you will become a slave to the business working for less than your employees! The alternative is to establish an "executive salary" that you will pay yourself, and THAT number becomes a fixed overhead or indirect labor cost to your operation - being accounted for in the "indirect labor" category of expenses.
You're correct. I have an "executive salary" right now. All of the tasks you mentioned are done by our office staff or externally and accounted for in overhead. My comment about double dipping was pertaining to people who still work in the field. You shouldn't account for your pay twice in that situation. No work that is done within my company is done for free. Learned that lesson. Thanks for commenting and sharing your knowledge.
Ok I’m confused. If it’s a two man crew how does it double? I understand it should be common sense, but the overhead doesn’t double. They can share the truck and equipment.
No I have not as it's not something we could use with our model. I will try it and see though. I"m sure they will be cheaper to operate. I don't think the big selling point of electric is lower cost of operation.
@@QuietLawn I'm still quite confused about the vehicle cost per year calculation as well. Why would you add up all the cost per year subcategories i.e - fuel, insurance and gas then divide them by the total life expectancy of the vehicle? Shouldn't these be multiplied b/c its cost per year x total number of expected years in service? The only thing that should be divided is the purchase price of the vehicle itself no?
@@cyruscopen62 No. The idea is to get the total cost of owning and operating that vehicle over it's lifetime and breaking that down to an hourly cost. Then, you know how much you need to charge extra per hour to cover replacing that truck. I highly recommend buying the spreadsheet I mentioned. This video is meant to be a simple illustration of the concept. There are many other details you'll need to calculate your pricing.
Just because its a deduction don't mean its money in your pocket. Its just tax you don't pay. How you make money is investing back in your business. Keeping your equipment in good repair and condition. Knowledgeable, Dependable and reliable. Form LLC don't do work as a propriator. Limit libilities. Have a business bank account the first job. Keep good records and accounting bookkeeping. Pay your taxes. You cut out local state and federal. 90% will not be in business after first year because of negligent business practices. Your business makes the money not you! You pay yourself after all expenses are covered. Your going to cry! But suck it up. Just get out and get more customers. Don't expect a vacation for awhile. Being in business is not working for your last employer😂
You definitely need to double dip when paying yourself. You are not only working on the property. Doing the job of an owner running the business and possibly secretarial work.
Like the video. Your point is valid but you had several mathematical errors. ie vehicle cost of maintenance wasn’t multiplied by the number of years. You just added 500 to the 2,500 Then divided by 2 years. I saw a couple things like that. But I still enjoyed the video.👏
Do you own the profits unlimited page? I just bought the spreadsheet today and it has really helped me feeling more confident bidding and making estimates. Totally recommend anyone else reading this to go ahead and try it out for yourself!!
Doesn't work out. You are dividing the insurance, maintenance and mileage over a 5 year term. Along with the total cost of the vehicle. When the insurance,, maintenance and mileage are ongoing in each of the 5 year running costs.
Don't agree. You need to know your numbers. But, most people underprice instead of overpricing in the beginning because they don't understand all of the costs of doing business. This is more to make sure you're charging enough.
This is poor advice. I'm sure you're a nice guy but this is not how you price a lawn job. This a horrible way of doing it and I feel sorry for the young guys out there who fall I to this type of junk. All of you should be pricing for gross margin. That's how I took my co.pany from solo to 40 employees and 20 trucks. That spreadsheet you're selling is horrible and makes no sense. PRICE FOR GROSS MARGIN if you want to be successful. So much garbage being pushed online ugh.
Everything about a vehicle, from the cost to the fuel etc is never a direct expense. Basic accounting 101. You’re totally missing your section 179 expenses. You can’t just divide your vehicle cost price by number of month. Capital equipment is done totally different.
I call BS.... if you labor is cutting the grass you also need to get paid for your office work....because if you dont do it.... someone else will have to do your office work..... dont short change your business.
He said don't pay yourself twice. Office salaries are for the actual office people like the managers and assistants. They are just overhead and overhead KILLS your profit margins. As a business owner, you're either doing labor and training new employees or doing office work and making sales, estimates, routes for your crew, scheduling, marketing, and ect... That's how this industry works... but we assume 500k revenue+ 10-20 employee+ businesses are going to want to use this calculation because alot of them are running low 10's profit margins and are trying to get back to the 20's but growth eats profit and that's facts
Dude, everyone says "know your numbers" but most people don't explain what that means. Thanks for taking the time to break it down!
Thank you very much for the feedback. Yes, I wondered what they meant for years as well. This will change your business.
How do sell jobs for profit when everyone else is charging $20 a week?
Facts! What numbers?!?! I thibk i know them. But idk if they are the right numbers. Lol
One thing I've learned about people in the lawn care business is that they really seem to be generous people. I believe this is a powerful tool that can give you a real competitive advantage, and instead of keeping it to yourself and letting other people figure it out for themselves, you've freely shared it. Man, I appreciate it.
Well, I'm trying to save you from all of the mistakes I've made and continue to make. Glad I could help and thanks for watching
What a wonderful thoughtful comment
I was thinking the same
I’m over a year late with this comment but this is one of the best videos showing these pricing strategies, so I’m investing my time to make this more valuable for other guys calculating overhead vs profit margin. That said, you made a few mistakes. I’m posting this comment so others use the right math for their overhead vs pricing strategies for accuracy
FICA taxes are split between employer / employee. About 7.5% each.
Hourly rate at your calculations would be $18.11, however some costs would be pulled from the employee’s payroll. It’s not all that different, but makes a difference over many hours per year.
In your vehicle calculation, despite the vehicle cost being extremely low and fuel economy extremely high, your annual figure is wrong. A $10k vehicle over 5 years is about $2k per year. Annual maintenance and fuel at your suggested cost of $1k and $2k, respectively, brings you to $5k / year (which is double your calculation).
In your “hourly cost”, you are actually calculating cost per mile (with cost of your time omitted). $0.26 / mile, translated to “$1.30 / hour” is actually $1.30 per trip (time unknown at this point, but assuming 8-10 minutes between accounts at 35 mph average local speed.) Would be $1.30 in fuel & misc. maintenance costs PLUS travel time. The number is closer to $10 per trip with time & equipment / fuel costs considered.
Covering your costs PLUS REPLACEMENT requires additional cost calculations; not just overhead. Your figure breaks even but does not allow any surplus earnings for vehicle / equipment replacement down the road unless your equipment significantly outlasts your predictions. You can’t run a business based on assumed / borrowed time.
Mower / equipment: your annual cost with fuel / maintenance is $1,750 or $3500 over 2 years (and realistically much higher with professional-grade equipment). You didn’t repeat annual fuel / maintenance spends in your calculation.
Cost / hour for mower at these rates = min of $3.50
Despite these objections, you do a great job highlighting most of the important categories needing to be considered by other business owners.
I pay my own lawn crew about $70 / week to service (mow, trim, edge, & blow) a 30,000 sq ft. lawn. They show up with 3-4 guys, are on site for no less than 30 minutes (or 1.5-2 man-hours) and have to unload / reload equipment before heading to next stop. I’d be willing to bet they are losing money on my property, even with undocumented workers. There’s no reality where you can bill ~ $17.50 / man-hour, pay your staff, equipment costs, insurance, etc. and still remain profitable.
With realistic minimum figures considered ($50k for truck / trailer, $8-12k in equipment with a few years of life expectancy and factoring in costs AND REPLACEMENT, rising fuel and insurance costs, rising labor costs, etc) it’s arguably impossible to be profitable in this business without being a full-service landscaper and offering several other services to your book of business.
I’d be willing to bet the most efficient landscaper with a self-run lawn service ONLY operation is earning less than $50k / year before taxes if operating at $60 per hour and that doesn’t leave room for reinvestment, hiring of staff, advertising, etc. Not to mention you won’t get every job you bid at these hourly rates.
Now all of this said, everybody’s overhead is different and local markets dictate different going rates. I’m speaking from my experience both as a customer and business owner in a New Jersey market. I’m curious to know yours and others’ hourly operational costs based on a 10 hour day / 5 day week / 30 week season in various markets.
$50 a man hour in minnesota, lower half.
You told it like it is. Good job!. Being in business takes disipline. It take awareness of your bottomline. Just because you want to make $60 or more an hour don't mean you will. It's customers customers and more customers that will get you to that goal. Hey! If it was easy, everyone would be doing it too.
Peace and Love! I don't normally leave a comment on video but I have to say this was the best video for pricing by far that I have ever scene. I appreciate the thorough breakdown. Great information and much needed.
This is excellent. I just took over an existing lawn service, and it's been years since I went to business school. This is precisely what I needed to get past breaking even plus 5% every month.
Awesome. Just keep in mind that this is not all inclusive and I recommend you buying that worksheet from Profits Unlimited to help you determine what your pricing should be.
@@QuietLawn we wrote everything down following the video and realized we were close to the right hourly, but couldn't account for some losses, so we went ahead and bought it. Going to use it later today to punch in the numbers and figure out where we went wrong.
Listen to this video!! Micheal introduced me to this spreadsheet and it’s been a game changer!! Even when I bought the sheets I still didn’t want to do it. But I gave it a shot; finally and 🤯!
Thanks Freddy!!! You've helped me a lot too brother.
@@QuietLawn 👊
Hey thanks for the video I've been watching it several times to get my things in order. I did notice when doing calculations though that the vehicle "total annual cost" is incorrect. It should be $5,000 instead of $2,600. You divided the 1) fuel cost and 2) insurance/repairs by 5 years but those were already annual calculations. The $10,000 truck cost divided by 5 years is $2,000 then add $2,000 fuel and $1,000 insurance/repairs = $5,000 total annual vehicle cost. $0.50 per mile and $2.50 per hour.
Thank God, knew I wasnt crazy. I was hoping I saw this comment somewhere.
Great video, I'm not quite there yet, but great illustration of what it takes to run a business.
That was really helpful! I appreciate you taking the time to make this!
Thank you very much for taking the time to watch and I'm glad I could help.
I really have no check out the spreadsheet. I’m having trouble with budgeting my equipment
Marker board hack: store your markers with the caps pointing down. That way the tip always has adequate ink. When you store them with the cap facing up, they don't write well, and they run out easily.
Amazing video, I’m just now starting to get into lawn care and this is the best advice I’ve gotten so far!
This is the exact video I needed. Thanks!
This might be a silly question but how did you get $19.05 on the direct labor? I really wanted to get this to have a better understanding of pricing. thanks!
Nice dump trailer bro! Your thought process is a lot like mines! Cant wait to see the setup video!
Now I had to subscribe because I really got value out of this video. Thank you very much sir.🙌
I'm watching from Nigeria, I'm quite a beginner into lawn business. And this video is going to help me a lot.
Definitely going to save this video
Awesome! Glad it helped.
GREAT explanation ....
You need to write a book called "Know your Numbers for Dummies."
I had to learn by trial and error... sure could have used this video a few years ago.
Stay safe and God Bless from Texas.
So did I until I found this. We're working on an app that can help walk people through this process and arrive at their number. Thank you for watching.
Awesome video, thank you so much for this... I was so confused and overwhelmed...
Thanks for watching and glad to help.
So informative!!! Wow, we calculate by the minute, mower burn rate, employee burn rate, trimmer etc. then add the price of future equipment like you said asset recovery
Thanks man, that put alotta things into perspective. Helpful
Glad to help. Thank you
Wow great information. I have looking for this to help me decide if I want to get into this industry. Thank you for your help.
Nicely explained 👌 👏
Best wishes to you and your company for this coming season 🙏
Thank you very much and best wishes to you as well.
I have a bachelor in business management, I have also been in business in lawn mowing for 7 years. Just saying this so you can vet my knowledge and experience. But I’ve never seen vehicles and tools as a part of the direct costs category. Let’s take a vehicle for example. You have to buy it whether you have 1 client of 100 clients. As such, it is a fixed cost. On the contrary, the fuel you put in it is a direct cost because it is directly correlated to the amount of work you have. You will pay way more for fuel if you have 100 clients than if you have only 1.
Why wouldn't it be a direct cost that is directly used up based on use just like fuel? Does the amount of use not directly relate to the life of the equipment and the cost recovery needed to replace it during that life?
@@QuietLawnVehicles are fixed cost bc you are paying for it regardless of having a customer or not. variable expenses are directly related to producing work. Your vehicles and equipment is fixed expenses and likely and asset that is expensed out over the life time. (Depreciated). This allows you to have a write off over the lifetime of an expensive resource.
Am glad I just charge 80 for 1/2 of cutting a lawn ❤
Thank you. That a good truck. I’m lucky if I get 10 mpg pulling a trailer.
Thank you for the great information 👍🏾
Great video. I'm just trying to start out and this is so helpful.
What software do you use? I'm trying out yardbook now
Awesome! Good luck to you. Yes, we still use Yardbook as well. It's very solid and dependable
Did you buy the “library of knowledge” or just the sheet? Definitely worth it just trying to decide if the library package is worth it.
Great info need to figure application 🙏
Reach out to The Green Helpers
Great video thanks for sharing all that information
Awesome..🙏🙌..Cheers for this video mate, it helps a lot..
Thank you very much for watching and I'm glad I could help.
I want to see the spread sheet that came up with the pricing for the know your pricing spread sheet.
I believe the link is in the description
How would this equation work with P4P, this has been biting my tongue for many weeks and idk how to calculate that as P4P is a percentage of the labor revenue. Please make an updated video for P4P I beg of you! 🙏
Good question. P4P will not affect this. If you are selling budgeted hours of time and you've calculated in what your crew should for each of those budgeted hours here, than it won't affect this. I'll try and make some kind of video explaining.
@Quiet Lawn- Electric Lawn Service Please do its confusing. And I'm actually good with math but this whole p4p thing is new to me
I do mowing and everything in between. Will the spreadsheet be applicable to pricing out spray/ fert program. Very interested in the sheet.
Yes, it's applicable to any service business. Nothing specific to mowing. We have sheets for all of our services as each has different costs. The only thing universal across all services is the overhead percentage that you add as these costs are spread over all of your services.
@@QuietLawn I don't have Excel, but this will be compatible with Google Sheets, I'm assuming.
@@elitelawns9437 yes. I think you can open it with that or one of the knockoff office products. I don't have excel either
did you switch from Ego brand trimmers to another brand I am looking to change out some of my equipment to battery and I am wanting your thoughts on what brands you are recommending please let me know that would be great.
and I am not in the market yet to purchase a backpack battery the cost up front for me is to expensive I am currently using an ego blower and a greenworks pro weed trimmer and i am not liking the weed trimmer just because it lasts about maybe three lawns and the battery needs charged I know i dont have the bigger battery just need some insight and some professional opinions on what trimmer I should go with.
I use Makita and Milwaukee ope tools and both work good 👍 and are build very strong and are reliable.
We are using something new since last year and I think we'll be able to share very soon. Makita and Milwaukee are good options if you need something asap. Ego as well.
@@QuietLawn you might laugh but I went ahead and bought cordless from Harbor Freight Atlas brand I did some research and found that the same company who makes atlas brand makes Green Works and a couple of other brands cordless weed Trimmers so I went the inexpensive route to see how like it and so far so good Atlas actually lasts an entire day on 2.5 amp battery 80V and will last 45 min continuous use to me not bad but I am hoping to see what you will be sharing on what you are using Soon
@@skeletulchart6197 please share your feedback on how it works.
You can go to level 4 while staying on level 2.
Investing is putting your money to work while you’re sleeping. It works 24/7.
Great video
So are u saying like it would be for ex. If it's just me to start off with I charge 50 a yard or those ex. Is for if I had some one work for me
The best information
Last year I priced jobs at $ 70.00 per hour and paid 30 % to the employee who averaged $21.00 per hour.
This year I am pricing jobs at $80.00 per hour and 30% to the employee doing the lawn care job so he will average $24.00 per hour.
I am in Canada and minimum wage is $15.00 per hour.
Imo you should be paying 30% of gross sales to the employee doing the job and 70% of gross sales to my business.
The fixed costs are what they are.
Kiss
Keep it simple stupid.
This all works great for me and is simple.
I also allow 6 minutes average driving time for each account.
12 subdivision cuts a day x 6 minutes equals 72 minutes a day of driving time .
That a good rule of thumb Ron
Thank you
Glad we could help. Thank for watching.
Is purchase price paid in cash? Does the formula change if making monthly payments?
They need to do 3+ lawns in hour to hit that number ?
Doesn't matter how many lawns. They need to generate that much revenue per hour
When you are referring to total revenue, do you mean total revenue just for the specific service your are calculating, or TOTAL revenue for the year from all services you offer combined?
Total revenue Cyrus. Again, if you're trying to get an accurate number, you need to spend the money to buy the spreadsheet in the description. There are many details left out in this example.
@@QuietLawn Thanks for the clarification Mike! I might just do that, but I already have an exhaustive list all of my direct and indirect expenses laid out in google sheets already so I think I can probably get away with coming up with my own spreadsheet to track this. My last question for you is how does this change once you switch to P4P, do you just take your average hourly rate for your one person mowing crews and plug that into the direct cost formula?
@@QuietLawn Hi Mike, I finally made the time to buy the spreadsheet and have been calculating it to calculate the costs for various setups. I'm wondering if you have any suggestions on how much additional "overhead" as a percentage you put in to account for the cost of mulch?
Spreadsheet link doesn't work
great info
You are most likely double dipping with your SBA loan. Was that loan used for equipment, vehicles and so on? So generally the only thing you would consider with the SBA loan is any interest and fees.
Thank you!
thanks so much
At 5:32 you talk about the "owner salary" in connection with office work and you state that you should not "double dip" so you don't factor that time into your overhead calculations. You would be incorrect here as you should establish an hourly rate for whatever work you do in the office, whether that be invoicing, bookkeeping, purchasing, or any other indirect cost task for that time. You will eventually have to pay the individual that takes over these tasks, so you should factor the cost of those tasks into your pricing formula. You don't have to use the same "hourly rate" as you do for when you are out in the field doing production work, but you certainly should factor some "rate" into each hour of work you perform for your business. Otherwise, you will become a slave to the business working for less than your employees!
The alternative is to establish an "executive salary" that you will pay yourself, and THAT number becomes a fixed overhead or indirect labor cost to your operation - being accounted for in the "indirect labor" category of expenses.
You're correct. I have an "executive salary" right now. All of the tasks you mentioned are done by our office staff or externally and accounted for in overhead. My comment about double dipping was pertaining to people who still work in the field. You shouldn't account for your pay twice in that situation. No work that is done within my company is done for free. Learned that lesson. Thanks for commenting and sharing your knowledge.
Hey I have question? Lawn Care related
Shoot!
Ok I’m confused. If it’s a two man crew how does it double? I understand it should be common sense, but the overhead doesn’t double. They can share the truck and equipment.
Have you plugged something like a hustler surfer or toro 30" commercial into your calculations to see what you get?
No I have not as it's not something we could use with our model. I will try it and see though. I"m sure they will be cheaper to operate. I don't think the big selling point of electric is lower cost of operation.
I think your numbers for your first chart is wrong. 15+ 20.7% equals $18.1 where are you getting 19.05 from?
Isn't the vehicle anual cost $5000/year? 2K for the purchase+2K for gas +1K for Ins/repairs
Yes, you're right. I forgot to add that in for this example. Good catch.
@@QuietLawn I'm still quite confused about the vehicle cost per year calculation as well. Why would you add up all the cost per year subcategories i.e - fuel, insurance and gas then divide them by the total life expectancy of the vehicle? Shouldn't these be multiplied b/c its cost per year x total number of expected years in service? The only thing that should be divided is the purchase price of the vehicle itself no?
@@cyruscopen62 No. The idea is to get the total cost of owning and operating that vehicle over it's lifetime and breaking that down to an hourly cost. Then, you know how much you need to charge extra per hour to cover replacing that truck. I highly recommend buying the spreadsheet I mentioned. This video is meant to be a simple illustration of the concept. There are many other details you'll need to calculate your pricing.
You may want to look into section 179 depreciation schedules.
Love the info but doing lawns spread out to start - 🤷♂️
Not understanding your comment
Just because its a deduction don't mean its money in your pocket. Its just tax you don't pay. How you make money is investing back in your business. Keeping your equipment in good repair and condition. Knowledgeable, Dependable and reliable. Form LLC don't do work as a propriator. Limit libilities. Have a business bank account the first job. Keep good records and accounting bookkeeping. Pay your taxes. You cut out local state and federal. 90% will not be in business after first year because of negligent business practices. Your business makes the money not you! You pay yourself after all expenses are covered. Your going to cry! But suck it up. Just get out and get more customers. Don't expect a vacation for awhile. Being in business is not working for your last employer😂
You definitely need to double dip when paying yourself. You are not only working on the property. Doing the job of an owner running the business and possibly secretarial work.
Like the video. Your point is valid but you had several mathematical errors. ie vehicle cost of maintenance wasn’t multiplied by the number of years. You just added 500 to the 2,500 Then divided by 2 years. I saw a couple things like that. But I still enjoyed the video.👏
Thanks. Idea of the video was to show the process
What 20 mpg? Hopefully this is not a real life example ...
Do you own the profits unlimited page? I just bought the spreadsheet today and it has really helped me feeling more confident bidding and making estimates. Totally recommend anyone else reading this to go ahead and try it out for yourself!!
Was I the only one who noticed that when he turns his head his shadow looks like a dog?
Much respect to him but Golden retriever.
Doesn't work out. You are dividing the insurance, maintenance and mileage over a 5 year term. Along with the total cost of the vehicle. When the insurance,, maintenance and mileage are ongoing in each of the 5 year running costs.
Idk Walmart kinda seems like they just price whatever 😂
Maybe true
You definitely got the insurance wrong insurance alone.That's gonna be way over a thousand
I agree with what you're saying but when one's getting started you've got to be competitive so your price range will be all over
Don't agree. You need to know your numbers. But, most people underprice instead of overpricing in the beginning because they don't understand all of the costs of doing business. This is more to make sure you're charging enough.
$30k salary as an owner? I am out
Lmao
That's what I think of your profile picture and you expecting people to take you seriously
This is poor advice. I'm sure you're a nice guy but this is not how you price a lawn job. This a horrible way of doing it and I feel sorry for the young guys out there who fall I to this type of junk. All of you should be pricing for gross margin. That's how I took my co.pany from solo to 40 employees and 20 trucks. That spreadsheet you're selling is horrible and makes no sense. PRICE FOR GROSS MARGIN if you want to be successful. So much garbage being pushed online ugh.
Any videos out there on the channel that you recommend?
Your hand movements are annoying.
Everything about a vehicle, from the cost to the fuel etc is never a direct expense. Basic accounting 101.
You’re totally missing your section 179 expenses. You can’t just divide your vehicle cost price by number of month.
Capital equipment is done totally different.
I call BS.... if you labor is cutting the grass you also need to get paid for your office work....because if you dont do it.... someone else will have to do your office work..... dont short change your business.
Where do you hear me say you shouldn't get paid for the office work? That's part of your overhead.
He said don't pay yourself twice. Office salaries are for the actual office people like the managers and assistants. They are just overhead and overhead KILLS your profit margins. As a business owner, you're either doing labor and training new employees or doing office work and making sales, estimates, routes for your crew, scheduling, marketing, and ect... That's how this industry works... but we assume 500k revenue+ 10-20 employee+ businesses are going to want to use this calculation because alot of them are running low 10's profit margins and are trying to get back to the 20's but growth eats profit and that's facts
Thank you