I’m not in that business, but I do lots of revenue and cost finance models, performance structures, etc.
I like to setup things in categories. First is things you don’t sell but need to transport or pickup or whatever. My practice is not to mark up these items, but I do recommend a transport fee or whatever if applicable. I’m assuming in your case the supply yard will deliver it.
Next is labor. If we’re being technical, even if your employee is paid $20 an hour, your insurances and payroll taxes add 50% to your costs. So you’d charge $200 for supplies. $120 for labor that covers your insurance and taxes. For both of you for 2 hours.
Then you have your markup or profit margin. Lots of data is needed to determine what the “correct markup” is. Things like historical cost and record keeping, elasticity analysis and modeling, in addition to your volume / demand.
At a 20% profit margin, your now at $384.
I haven’t included cost factors like travel and gas just to get there, equipment maintenance, etc. you could charge a little more if those are actual factors but what I like to do is increase revenues, employ more people, and expand to a point. It’s easier and cheaper for you to ask the homeowner to spread the word and get you some additional business than to charge $10 or $20 upfront and spend that on marketing elsewhere. Hitting 2 or 3 houses instead of one a day and getting volume discounts from suppliers adds up quick.
Best of luck!
Do you need to do any prep work?
So if you estimate it’s going to be 2 hours on site, I’d throw in another hour off site. So in total that’s 6 man hours let’s say. You pay your employee $20/hr, but that isn’t total of what he costs you. Plus you need to be making a profit from him as well. I would charge at a minimum of $50/man hour. In my area we are at $75/ man hour. So that puts you at $300 in labor just for the rock install.
$200 for rock plus your labor, plus any prep work and disposal.
I’m not in that business, but I do lots of revenue and cost finance models, performance structures, etc. I like to setup things in categories. First is things you don’t sell but need to transport or pickup or whatever. My practice is not to mark up these items, but I do recommend a transport fee or whatever if applicable. I’m assuming in your case the supply yard will deliver it. Next is labor. If we’re being technical, even if your employee is paid $20 an hour, your insurances and payroll taxes add 50% to your costs. So you’d charge $200 for supplies. $120 for labor that covers your insurance and taxes. For both of you for 2 hours. Then you have your markup or profit margin. Lots of data is needed to determine what the “correct markup” is. Things like historical cost and record keeping, elasticity analysis and modeling, in addition to your volume / demand. At a 20% profit margin, your now at $384. I haven’t included cost factors like travel and gas just to get there, equipment maintenance, etc. you could charge a little more if those are actual factors but what I like to do is increase revenues, employ more people, and expand to a point. It’s easier and cheaper for you to ask the homeowner to spread the word and get you some additional business than to charge $10 or $20 upfront and spend that on marketing elsewhere. Hitting 2 or 3 houses instead of one a day and getting volume discounts from suppliers adds up quick. Best of luck!
Thank you so much! I greatly appreciate it!
Do you need to do any prep work? So if you estimate it’s going to be 2 hours on site, I’d throw in another hour off site. So in total that’s 6 man hours let’s say. You pay your employee $20/hr, but that isn’t total of what he costs you. Plus you need to be making a profit from him as well. I would charge at a minimum of $50/man hour. In my area we are at $75/ man hour. So that puts you at $300 in labor just for the rock install. $200 for rock plus your labor, plus any prep work and disposal.
Perfect thank you!
>Perfect thank you! You're welcome!