[shadetree93pgt]

1) how much do you guys mark up your products from your cost? (20%, 10%, ???)


2) How do you guys go about estimating man labor hours for bids?

3) what is the average TOTAL cost of an employee per hour after taxes, S.S., fica, etc on a $10 per hour employee?

4) what do you charge per hour for machinery?


thanks guys,

-Jeff

[BigD]

good luck

[Stonehenge]

Welcome aboard, Jeff.

The ability to price correctly and accurately can make or break your business, and it's something people often seek input for here. But it's a very individual thing - each company has it's own strengths and weaknesses, and it's own goals. So pricing according to what some other guy prices might be signing your own businesses death warrant.

One of the common pieces of advice you'll find here when people ask about price is to "know your costs". Know how much the maintenance on your machinery is, it's expected life, and the likelihood of major problems with it (and the costs to fix them). Know how long it takes your crew to do a job. And on down the line.

Estimating labor hours for a project - that comes from having done the thing and timing your crew. Everyone is different.

Tell us more about your specific situation and you might get more specific responses.

Material markup - depends on your methods and objectives. Some don't mark up at all, and just look to recover on their labor. Others do mark up materials.

[GLAN]

Howdy

There has been many other discussions regarding pricing and hourly rates......

May I suggest do a search on the subject....read the discussions and you can then formulate your own conclusions. Any further specific questions. Start a thread or post in threads already provided and I am sure we can work it out together.

[SodSquad]

I think its great that you want to try and do some jobs on the side, when i was 17 i started the same deal, i would go and make up 1000 flyers then on the weekends i would go to the new area's in town and flyer door to door, sticking it on there door handle. now i grew up in a garden center so i had plenty of sod experience already, but still sod really isnt too hard of a deal

put 4-6'' of good loam on top of your sub grade, rake it, roll it , rake it, roll it again, and continue untill your sub grade is completely level, as long as you make your sub grade look good your yard will look good, just make sure not to walk all over it when your laying your mats.


as for pricing goes, take how much your sod cost, soil cost, gas for truck, and labour...(if your just doing it part time only use one guy,,,trust me its enough if you two are not lazy) then add on how much you want too make, thats the way i started, and its a very simple way...

the equipment is cheap, two landscape rakes, one wheel barrow, one drum roller, 1 razor blade. so under 500 will get you started.

and for payment you estimate and if you want you can ask them for a 20 percent downpayment that should cover your sod and soil cost.

[Malrex]

2) estimating labor

I basically walk around the yard or look at the plan I drew and go through each step that needs to be done in my head. I think about the tools I would use to do the job, what the terrain looks like--is there a big hill I need to wheelbarrow up? etc. I look at every factor and situation and give my best shot on how long it would take me.

If I had a crew...I would do it the same way, but take in the factor of the strengths and weaknesses of each person on my crew. Do I need Billy to plant the bushes even though he is slow because Ricky has to do something else--I better add a little bit of time. Not sure if this is the correct way or not, as I'm pretty new, but I think Stonehenge is right in that everyone does it different.

[Michael Stone]

Jeff:

I can answer 1, 3 and 4 for you.

Your markup on costs should be no less than 1.35 and it can go all the way up to 1.60 and higher for your type business. I deal with this question daily from all over the US, Canada and 10 other countries from around the world. Your markup (the .35) covers your overhead and profit. If you want to stay in business long term, then you need to make a minimum of 8% net on each job you do. The balance of the .35 covers your overhead, which as Stonehenge pointed out above, will be different for every company. What is left of your markup after overhead has been subtracted goes to paying for mistakes and things forgotten on the estimate sheet. I know they never happen, but in the unlikely event.........

That is why no one single markup will work for all companies.

Trying to price your jobs based on what other companies do, is suicide. Over 90% of all construction companies, not just those doing landscaping and related work, underprice their jobs or services. The reader can verify that by looking at the reports issued by Dun and Bradstreet each year. Those reasons for business failure in construction related businesses haven't changed a bit since I started following their reports some 30 plus years ago.

You might consider purchasing our book, Markup and Profit; A Contractor's Guide which will take you step by step through the process of establishing the correct markup for your work or service. Click on the CPR add on the home page and that will take you to our site.

Now, # 3. A quick and dirty way to establish what your employees cost you is to take the rate per hour that you are paying each guy, and multiply that number times 1.35. Now remember, that is not your markup for the job. That is the burden for the employee. Keep in mind each state's requirements on you as a contractor will be different and so depending on where you live, that number may go up or down. EXAMPLE: California contractors should use a number of 1.48 times the rate per hour to arrive at what the dude or dudet costs them on a job. Now the CA laws change frequently so that number may be higher or lower since the first of the year, but that will be close. WA and OR both are safe at 1.35. Your accountant should be able to give you that number very quickly for the state you live in.

#4. I will ask the Big Guy for GTX and see if he will let me post a paper I wrote on how to calculate the actual cost of a vehicle or machine and how much to charge for it by the hour with or without the operator. That should help a bit.

Hope this helps

Michael