how to charge for hours worked?

[woodslinger]

I struggle with bids, and after completing a recent job that went way beyond scope and as such way beyond original estimate, I realized that I am not only guessing at how long something will take, I also don't know how much to charge for the labor hours. With all the hourly figures in front of me as well as rental, gas, equip, etc I still had trouble figuring out what was a reasonable price. For example, if I am paying someone $10/hr, do I charge $20? maybe 15? If I am "paying myself at a higher rate, do I keep the same markup, pay me $35 and charge $70? Having a few jobs under my belt and some hour figures to look at helps, but I still feel lost as to weather I am being dirt cheap, getting a fair price, or being greedy.
Thanks in advance..

 

[sotc]

If you pay $10 and charge $20 you're losing money. Payroll taxes, comp, travel time, maintenance, will come to more than that. Even then your truck and chipper will never get replaced/upgraded

 

[woodslinger]

Good point, I hadn't thought of it that way. The 10 was just for a percentage example, but I guess its not that simple. On this job I really am paying out 10, but only for 1 worker out of 4 that were involved, they are all family members and most will not accept a paycheck. Out of 41 hours worked besides mine, I am only paying for 20 of them.
But in the more realistic world of my future (I hope), if I have a groundie working for 15 or 20 per hour, how much do I charge the customer for their time?

 

[NickfromWI]

Are you just talking for that persons time, or do you have the overhead wrapped into that?

If you are paying people in cash (which you need to stop doing ASAP) and you are accounting for your fuel, equipment, dump fees, PROFIT (you never mentioned that one) elsewhere in your formula, then you only need to charge the $10/hr to cover the actual expenses for that worker.

I have to charge way more than double for each worker because I have to factor in a ton of overhead- but I do my formula way different- factoring it all into the man-hours


love
nick

 

[Chris E]

just a comment as I've got no valuable advice I'm pretty sure plenty small operators in the tree biz use the most medieval and stoneage formulas that they can come up with...

 

[woodslinger]

My "system" seems to be a step above a stone tablet and a chisel...

Nick, thank you for the input, I am starting to get a little more perspective on this I think. What is the issue with paying cash?

 

[sotc]

I charge the same money for each man working, including when I'm on the job. It doesn't change if I'm using the chipper or not, the bucket or not etc. I still need that equipment paid for at the end of the month. And yes, profit, if there's no profit, it's just a job, not really a business

 

[NickfromWI]

...What is the issue with paying cash?

Where to begin....

1- it's illegal
2- you're putting your clients at risk
3- your employees are screwed if they get hurt

All the reasons why your family doesn't want to be on payroll aw the reasons why there's an issue


love
nick

 

[Raj]

What's the other guys charging in your area? What price per hour are people be willing to pay? Is there a regional expectation of how the work is to be completed? (example, up here, in a town over, ritzy part of Ancaster you are expected to vacuum up woodchips off the lawn and comb the grass back up, in my town, Brantford, as long as the homeowner has a tarp big enough, it's fine to poke holes in the roof, they are planning on re-roofing in 15 years anyway)

 

[pantheraba]

Hahaha. Big tarp and holes in roof!!!

 

[HolmenTree]

Written in stone with a chisel
I operate my outfit alone and I know a poorly paid lawyer 20 years ago can make a $150 hr, so today I have to make $200hr

15 years ago I've heard rates are based on $50 hr for each employee and $50hr for each piece of big equipment.

Yes nothing written in stone, it only takes a few years to figure out how fast you can get every different kind of job done and how much you can comfortably charge your different level of customers.

 

[woodslinger]

My chisel has an eraser on the end, its fancy

Thank you guys for your input, the picture is starting to get a little clearer for me. I had not really considered the liability aspect, I have liability insurance, but I do not carry comp as I do not "technically" have any employees. I am hoping after being in business for a while my rates will come down (2k per year currently) and I can add comp and be more legit without bankrupting myself. I am feeling much more confident and justified in charging much higher rates, thank you all very much

 

[Sep]

Your liability insurance will go up, after being in business for a while. The rate is partially based on your business's gross income. So the more work you do the more exposure the insurance company has to liability. The rate also will go up or down based on your claim history.

 

[woodslinger]

Crap, here I was thinking it would go down after having more time in business with no claims

 

[cory]

I operate my outfit alone and I know a poorly paid lawyer 20 years ago can average $150 hr, so today I have to make $200hr

$1600.00/ day, alone? Nope.

 

[NickfromWI]

Nope what?


love
nick

 

[cory]

I find it impossible to believe 1 man can do tree work and make $1600.00/day on average, alone. No way. Maybe on a certain, perfect job, or doing stumps, or Ipm, but not general tree work.

 

[cory]

Holman knows his way around a chainsaw and he's a good contributor here, and more power to him that his in his 50's doing tree work for a living. But all the bragging about how tough he and his kind are for living in cold climates, all the poo pooing of people who use cranes for tree removal, and claiming he makes $200.00 and hour which would seem to equal $1600.00/day, working alone, its just a bit much. Say he's working 200 days/ year, that means he's grossing $320k, nah.

 

[Chris E]

popcorn anyone?

I could believe that a proficient operator in a good market can turnover 200/hr based on "site time"

 

[cory]

Maybe you are right and I am wrong. A bangin 3 man crew with 75' bucket, large chipper and stump machine, wheel loader would do probably at least 5x's more than a single tree guy on most jobs. Add in a crane and it would be 10x more.

$1600.00 for that 3 man crew would be low but its not like its never happened

 

[Tucker943]

No one is doing $1600/day alone consistently. It could be pulled off at some point, but couldn't be a consistent number. Competition would explode like a firework if any market could bear a one man show doing those numbers.

 

[cory]

If Holman is that good at peddling daylight, he should probably ditch the cutting and just do sales...

 

[HolmenTree]

Written in stone with a chisel
I operate my outfit alone and I know a poorly paid lawyer 20 years ago can make $150 hr, so today I have to make $200hr

Holman knows his way around a chainsaw and he's a good contributor here, and more power to him that his in his 50's doing tree work for a living. But all the bragging about how tough he and his kind are for living in cold climates, all the poo pooing of people who use cranes for tree removal, and claiming he makes $200.00 and hour which would seem to equal $1600.00/day, working alone, its just a bit much.

Say he's working 200 days/ year, that means he's grossing $320k, nah.

Ok where did I say I work 200 days a year 8 hrs a day??
For the high level jobs my customer or the hacks can't do, I damn well better get $200 hr. I don't write up an estimate at $200 hr for my work , I charge by the job kinda like logging piecework....I think you know what that is.

Stump removal charging by the inch in our average small trees can yield some of my best earnings . But not as much as felling 20 big poplars for a cottager at $50 a tree which would take me under an hour to do on most jobs...... there you go a $1000 hr. My business is at least 50% or better most years straight falling , where the climber arb is fumbling around for a day or 2 to make that.

I got more firewood hoarders on speed dial then I know what to do with. Cleanup is pretty easy for me. But the beautiful thing is I have no competiton in this vast area where I am, sure there's the hacks but their doing me a favor and leaving me the "money trees".
I'm not fool enough to post what I gross in my best year as it's on the net forever, But as I've said before the best paying job I ever did alone was over $31,000 in 88 hrs ....so that works out to $352 hr.

Sorry to have made you think I was bragging....I thought I was giving inspiration for the guys here
BTW why don't you show your mug in your avator .....not some other guy holding a badger.

 

[Tucker943]

Probably to keep a bit of a line of privacy. It's actually brilliant. Any vicious competitor could use a lot of our discussions as ammo against us. Mostly discussions like this one and ones related to customer issues or manpower issues.

 

[Tucker943]

I have a competitor that would pull that shit. I often question scrambling my identity on here a bit better. Alter the username to something other then my nickname and alter the location. One wrong comment could be printed off and used against me.