# How much production do you get out of your guys?



## urbanlt (Jan 21, 2008)

I am wondering how much work your guys get done. The ability of my crews to perform has decreased lately and I have been doing what I can to correct the problem, but I wonder how realistic I am being about what they should be able to get done. I am wondering where I stand in relation to other tree services. 

Could you calculate this ratio for your company and let me know where you stand?


Revenue divided by Payroll (includes wages, payroll taxes, and benefits, but not workmen’s comp)

Mine is $2.56 for 2007 Meaning for each dollar I paid my guys they got $2.56 worth of work done.

Please note if you do not pay payroll tax as it will throw off the ratio a bit.

How did your crews do in 2007?


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## BC WetCoast (Jan 22, 2008)

That's a tough ratio to compare as employer contributions will vary. It is good for an individual to calculate trends though. I think a statistic that may be more viable to compare across regions/countries would be the effective billability rate. That is simply revenues divided by the total hours needed to generate that revenue. It can be up the individual whether you want to include overhead (non-production personnel ie sales, admin) hours or not.


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## tree md (Jan 22, 2008)

Your trying to figure by the man hour and that's hard to do as it will vary. I always try to run between 19 and 23% labor. It's easier to figure by percentage (I learned this at 19 managing another business). Figure what your labor cost is and fuel and overhead (by percentage) preferably before you bid a job and if your not making more that 2/3 of the profit something is not right.


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## lxt (Jan 22, 2008)

I think the easiest way at first would be to figure out your average daily income maybe over 7-10 days, this can fluctuate depending on unforeseen breakdowns, etc..etc..

How much did the biz make a day? how much to operate the biz each day? include everything in operational expenses, wages, advertising, breakdowns, fuel....you get the idea, when all is done how much do you make at the end of the day? on average!!

Many biz owners I know get greedy & this is their downfall, always chasing that day where they make X number dollars, they usually push the guys a lot harder(same pay), it becomes a game of how much more can I make tommorrow as compared to today...........hopefully this is not the case & if it is your men will know & it will reflect in how they produce!!!


LXT....................


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## urbanlt (Jan 22, 2008)

Thank you for your insight, but could someone please just calcualte the ratio.

BC West Coast: I don't want to calcualte revenue per hour because I want to see the differances in wages and what companies can charge reflected. I figure in places where wages are high the companies can charge more so the effect on the ratio should no be that large.

lxt: I know what my Net Margin is that is not what I am trying to compare. 

tree md: If you are getting 66% Net Margins I am moving to Tulsa. That is totally Crazy!!!


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## lxt (Jan 22, 2008)

urbanlt said:


> I am wondering how much work your guys get done. The ability of my crews to perform has decreased lately and I have been doing what I can to correct the problem, but I wonder how realistic I am being about what they should be able to get done. I am wondering where I stand in relation to other tree services.
> 
> Could you calculate this ratio for your company and let me know where you stand?
> 
> ...




for each $1.00 you get $2.56 worth of work, im not a mathmatics major or anything, but you are making $1.56 profit...thats more than 100% markup so to speak!! Ill give a buck to make $2.56 anyday.

Im not sure what you are trying to compare, a guy in my area (larger co.) runs off 20% profit, they work all the time! but he has alot of overhead, my net profit (im small) is probably close to what treemd has stated. I think it depends on how big/small you are, overhead, etc..,etc,

LXT.............


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## urbanlt (Jan 22, 2008)

LXT: Revenue/Payroll 

Think about it


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## lxt (Jan 22, 2008)

urbanlt said:


> LXT: Revenue/Payroll
> 
> Think about it





Urbanlt, your kinda loosin me & probably others!! you asked for ratios, you`ve given numbers, etc... revenue/payroll..........yes we all get it!! do you?

according to your figures if one of your men makes $30,000 a year you make $35,000 off him!! you`re thinking at $2.56 for every dollar spent is bad, atleast your post makes it sound like such.

what you need to ask is have your mens production decreased or has the job attainment decreased or both? bigger jobs dont necessarily mean more $$ you have to weigh all the factors.

I beleive me & treemd gave you close to our percentages!! whats yours? doing it your way mine is $5.74, but this is not an accurate way of doing it!! 

think about it, example: I make $100,000 revenue(depends on your definition) I prefer gross income, Payroll = $50,000 which according to you means I made $2.00 for every $1.00 my man made..............wrong, unless you are reffering to the Net income you made???? anyway hope this helps!!


LXT..............


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## squad143 (Jan 22, 2008)

Since you used the word revenue, I have to assume you are talking about your gross income.

????? Too many variables  to have a use for the figure that you require (trying to determine the level of production).

Maybe your crews production has remained the same but your bidding has gotten worse.


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## jonseredbred (Jan 22, 2008)

squad143 said:


> Maybe your crews production has remained the same but your bidding has gotten worse.



:hmm3grin2orange:


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## lxt (Jan 22, 2008)

squad143 said:


> Since you used the word revenue, I have to assume you are talking about your gross income.
> 
> ????? Too many variables  to have a use for the figure that you require (trying to determine the level of production).
> 
> Maybe your crews production has remained the same but your bidding has gotten worse.




Exactly!!

LXT.........


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## extremewoodwork (Jan 28, 2008)

To give you an answer my ratio for the year of 2007 is 3.96. I dont believe that this method of deciding production level is accurate. The only way it would be accuarate is if you had no variables what so ever except for your guys. Realisticly there are many variables such as used equipment downtime, do you rent equipment?, aquired new equip. ?, job travel time, hot weather, cold weather, wet weather, lower bids, run over a water meter, the tree itself, etc... etc.... . Just one of the Little things such as what I mentioned above will greatly affect overall productivity now imagine them all combined. If you really want to check the productivity of your guys then watch them work. Better yet work with them for at least 3 months, and if you do this make damn sure you work harder than they do. If you dont their respect for you will diminish quickly and their production will decrease. In other words they will care a little less than it seems you care. The more respect they have for you the harder they will work for you. Give them skills to take pride in, a good paycheck, treat them with respect and believe me they will work hard for you and you wont be concerned with ratios.


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