Re: Thinking about rates to charge???
Well, that question's a can of worms! But let me see if I can get the lid put back on. We're gonna start by looking at something we call MLB (Material, Labor, and Burden).
First, how much is your time worth? You can start by determining what you earn an hour at your regular job. Then decide how much you'd need to "earn" to show up for work on a Saturday. For instance, let's say you earn $10 an hour working at your everyday job (it's just a number - don't panic). The boss comes up and wants to know if you'll come in on Saturday and work this next weekend. In most companies you'll get time and a half for the Saturday work - that's $15 an hour. Is that enough to make you want to come in?
If not, then what's your time worth? How much would you need to make to work on Saturday? That figure needs to be your profit. For numbers sake lets say the dollar figure you want is $20 an hour. By golly, for $20 an hour you'll head on in to the sweat shop and do some work. But wait, that's what you need to be able to spend out of the money you earn. Not what you should charge. You've got overhead and it's gonna eat up a bunch of that money. Let's look at a typical 3 hour job.
So where does the money go. Well, right off the bat you've got tractor fuel costs. Figure a gallon per hour as a minimum so we need to add $1.50 per hour to the "bill". 3 Hour job - $4.50 total. You'll also need to determine how far you have to drive to get the fuel and the time it takes. Let's say the corner gas station has diesel so you're not out much - maybe fifteen minutes to run down, fill the yellow can, and get back to the tractor. So, at $20 an hour that's an additional $5 of your time - add it in as well. Then of course, you have to get the tractor to the work location. So you load the CUT on the trailer and it takes 20 minutes to tie everything down. That's another $6.67 on the bill.
Tractor's loaded up and you're ready to roll. Customer is 10 miles across town and you can make it there in 20 minutes. Add another $6.67 to the bill. You drive the 10 miles to the customers location and you use your own truck. IRS says that's worth around 37 cents a mile. So we'll add another $3.70 to the total.
Ok, we're at the customers and ready to unload the tractor. Let's say unloading is easier as we don't have to do anything but unhook and drive off - 10 minutes max. Add another $3.33 to the bill. Now we're ready to mow.
Let's say the job is 3 hours. So our fuel costs are $4.50 for the tractor. But wait, didn't that tractor cost some big bucks. I know mine was right at $20,000. We need to include time here as well. We can make this a bit easier by simply matching the rate the local rental yard would charge for the same tractor. Let's say that rate is $35 an hour. So we need to add $105 to the bill for tractor time.
And don't forget, after the "work" is done we still need to get home. So add time for putting the tractor on the trailer at the job site (15 minutes), driving home (20 minutes), and putting up the tractor back up (25 minutes - includes a quick rinse off). So the total "home run" is another hour at $20 plus $3.70 for use of the truck on the return leg.
So, where are we at?
55 minutes to load, fuel, and drive to job site - $18.34
10 minutes to unload tractor at job site - $3.33
3 Hours of your time on site - $60
3 Hours tractor time (covers use of tractor and maintenance) - $105
1 Hour drive home and put up tractor - $20
Fuel cost tractor - $4.50
Truck IRS cost - $7.40
Total bill to customer $218.57 or $72.85 per hour. That's what you REALLY need to charge to make $20 an hour. If you only charge $50 an hour then your actually loosing $2.85 an hour on your cost alone. /forums/images/graemlins/crazy.gif
