# Business help



## Brush Hog (Mar 21, 2008)

I need help from the more business wise people. I'm wondering how you figured out you per hour cost. I own my truck outright and rent a chipper. All my climbing gear is paid for. Do you take insurance, fuel, truck (replacement cost) and pay and divide it by something. I do alright but I need to get more confident in my bidding procedure. I want to be able to walk up to a tree and say it'll take me 5 hrs+dumping fee for chips and multiple it by a number to come up with my price. I know their is more of a science to it than a guesstimate. 
Pete


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## ropensaddle (Mar 21, 2008)

Brush Hog said:


> I need help from the more business wise people. I'm wondering how you figured out you per hour cost. I own my truck outright and rent a chipper. All my climbing gear is paid for. Do you take insurance, fuel, truck (replacement cost) and pay and divide it by something. I do alright but I need to get more confident in my bidding procedure. I want to be able to walk up to a tree and say it'll take me 5 hrs+dumping fee for chips and multiple it by a number to come up with my price. I know their is more of a science to it than a guesstimate.
> Pete



I have found it usually takes longer than expected even if its minutes.
Risk is the first factor and sometimes worth way more than the hourly
based rate! Costs is just one factor, customer attitude knowledge is
a factor on some jobs. I try to come out at 100 per hour but if the
customer is baking cookies bringing out fresh tea etc. I can overlook
price on jobs that the customer cares about you! Also if they are the
other way or have a snippy attitude expect very high price. I am not
saying this will be your experiance but I want the good customers. Let
the other guy's bid on the sour apples.


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## Brush Hog (Mar 21, 2008)

I'm not looking to marry my customer but hopefully form a business relationship. I don't care if they are a PIA or the easiest person to get along with they all get charged a fair price. Right know I charge a $150 an hour an if they don't want to pay it oh well. With the price of diesel at $4.35 a gallon I'm not working for free. I'm more of the worker bee than the business bee but I need to change this. I plan on contacting my local SBA for help in some aspects of running a business but they won't help me in this aspect


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## ropensaddle (Mar 21, 2008)

I am not looking to marry them either and a fair price goes both ways.
It is just common sense, a customer with a good attitude will make
the job go smoother! I hate jobs the people act like they are getting
screwed and its always on a hard job and even their darn chihuahua
even wont shut up! I hate dogs that never stop barking 
If you are charging 150.00 I should be 400.00 with my equipment!
Its hard to get 100 here sometimes especially easy stuff.


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## ropensaddle (Mar 21, 2008)

I am not looking to marry them either and a fair price goes both ways.
It is just common sense, a customer with a good attitude will make
the job go smoother! I hate jobs the people act like they are getting
screwed and its always on a hard job and even their darn chihuahua
wont shut up! I hate dogs that never stop barking 
If you are charging 150.00 I should be 400.00 with my equipment!
Its hard to get 100 here sometimes especially easy stuff.


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## treemandan (Mar 21, 2008)

ropensaddle said:


> I am not looking to marry them either and a fair price goes both ways.
> It is just common sense, a customer with a good attitude will make
> the job go smoother! I hate jobs the people act like they are getting
> screwed and its always on a hard job and even their darn chihuahua
> ...



When they ask me how much i say" How easy are you going to make it? Are you going to let me work or are there going to be issues? " Makeing it easy, makes it cost less.
I love it when they ask if they need to be there when you do it.I honestly tell them I wished that they weren't.
Quick fix for a barking dog that is outside. You take 1 hot dog and 1/2 tablet of Benadryl, put the tablet in the hot dog and toss over fence. Dog will be dreaming of rabbits in 5 minutes. Big dogs will need a full tablet.


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## Brush Hog (Mar 21, 2008)

> If you are charging 150.00 I should be 400.00 with my equipment!
> Its hard to get 100 here sometimes especially easy stuff



CT is a rich state but it also costs a lot to live here.


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## OLD CHIPMONK (Mar 22, 2008)

Don't forget to figure in taxes,taxes & more taxes. Someone has to.!!


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## BC WetCoast (Mar 25, 2008)

Your costs are divided into two types:
Variable - where the cost depends on the amount of work done. This would include labour, fuel, supplies, maintenance etc.

Fixed - these are costs that you incur whether you do any work or not. Insurance, business licensing, equipment leasing.

You need to determine how many hours per year you work on average. For comparison, the average office worker works 2000 hrs/yr.

For equipment replacement costs, the easiest way is a straight line depreciation, that is, determine a replacement cost, determine how long you will keep it and divide cost by time.

Decide on a profit and risk factor. A rate of 20% for profit and risk is not out of line.

Your hourly rate will then be 
(sum of variable costs) + (sum of fixed costs/hours per year) + equipment replacement costs = subtotal X 1 + profit and risk%.

Of course, you then have to consider the local market. If your calculated rate is too high, then you have to figure out how to reduce your costs. Can you make your equipment last longer? Reduce profit and risk? Improve productivity?

You should also be calculating the net cost per hour of the jobs you do. Make sure you include all the costs.

I personally think a PITA premium is legitimate. If the customer is going to give me a headache, they should pay for it.


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## OLD CHIPMONK (Mar 25, 2008)

Simple; figure your overhead ( insurance,tools,equipment,fuel & employees),divided by hours worked ( 40 ) add $ 500.0 per day net. You now have no idea where what you should be bidding. I go by what was bid on past, similar jobs. Adding or subtracting for access, difficulty,time ,distance or fuel. Good Luck ! WIN SOME-LOOSE SOME !!!!


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## Texas Chainsaw (Jul 8, 2008)

I agree with Old Chipmonk, I go by what work I have quoted in the past and adjust price based on present requests or similar. Now for first time customers. I don't chrage by hour, in fact I never charge by hour. I go based on job time it will take, quantity of work, and difficulty. I have a minimum of 900-1,000 amount on full trailer loads(18ft.).However it depends on crew working how quick job can be done and how skilled they are.

Ex. If you have 550.00 exp. for the day w/crew. You want to bring in 500-800.00 in profits for the day. You need to work $1,100-$1,400 in sales for the day. I sometimes go based on that ratio.


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## southsoundtree (Sep 22, 2008)

Something to consider is if others can offer the same quality of service or not. If its a small removal to be done with onsite disposal with no hazards, they might be able to get the smallest cheapest operation. If its specialized work such as lots of lowering over targets requiring more gear, then you can charge more. If you have a monopoly on spurless climbing in your area, and its where people care about caring for their trees, you can put more of a premium price. 

And as others have said, figure all your expenses, including replacement cost of potentially damaged targets (landscaping, fences, etc) that you'd replace instead of going to your insurance, your accountant, etc.


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## tree MDS (Sep 22, 2008)

Brush Hog said:


> I'm not looking to marry my customer but hopefully form a business relationship. I don't care if they are a PIA or the easiest person to get along with they all get charged a fair price. Right know I charge a $150 an hour an if they don't want to pay it oh well. With the price of diesel at $4.35 a gallon I'm not working for free. I'm more of the worker bee than the business bee but I need to change this. I plan on contacting my local SBA for help in some aspects of running a business but they won't help me in this aspect



Twelve hundred is the low end around here, 1500 or sixteeen is standard - I think anyway. I like to try for 200 per hour if I can (sixteen a day), the math is soo much easier.


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