business costs

[likeitorlumpit]

Had a couple of hours with my 'supervisors' this morning nailing down business costs.

Including such fascinating thoughts as cost to finance trucks/chipper/JCB micro/big mowers.

We just added up all the running costs

Including annual insurance/fuel- usually averages out over the year/ ppe/training/rent on premises/business rates/waste collection/fixing machinery/replacing machinery/ recovery/ fortunately we don't advertise/ book keeping/ accounts/bank charges/ small tool replacement/ = covers most of it.

Shocking- works out as £20+VAT per man hour worked including wages. Thats without quoting costs.

So 2 men in a truck need to bring in £320 + VAT per day just to pay all the bills.

Has anyone else done this calculation and what did you conclude?

[Hodge]

Sounds a bit cheap to me.

[Kev Stephenson]

Based on working how many days per year?

 

How many teams?

 

How many other wages is this paying? e.g. office staff, company owner who never goes on the tools

 

According to that you need to be doing £450-£500 (inc VAT) per day, every day to turn a profit and have a slush fund to cover lost work days etc. Up here that wouldn't be viable so have to have lower operating costs.

[Andy Gentle]

I have been running my business for a few years now and if you want to renew your machinery and trucks on a reasonably regular basis and if you employ others and do things properly, ie pay your vat, tax, proper insurances etc it will cost you at least that per day, probably more.

But there are still those out there in our area who are content to work for as little as £250 a day for a team of 2 with truck and chipper:confused1:!!

[hazzygawa]

Does sound a bit cheap to me also

[Gray git]

He didnt say thats what they charge but thats the minimum they can charge per day before they are running at a loss.

I think if some of these people running at such low prices sat down and worked its all out as likeitorlumpit has they would put the day rate up a bit, lots of people forget about depreciation and replacement of tools vans chippers etc has to be taken into account and not just the obvious stuff like wages and fuel.

[Billy]

I did some very quick sums the other night and came to a figure of £56 per day based on 220 days wages not included.

[timtree81]

It is possible to run at 250 a day for 2 men , if the men have small out goings a 2000 pound tranny and a cheap old chipper and live in a council house / at home with mam and dad , run the van on red , duck and dive , look after the prussuk and keep every thing simple or and able to maintain a very local customer base and be frugal at all times

[likeitorlumpit]

I did some very quick sums the other night and came to a figure of £56 per day based on 220 days wages not included.

 

Well- mine works out at £60 per man per day overheads so thats almost exactly spot on. You must be running a similar setup. Or maybe this level is pretty standard. Add £60 onto your wage then add profit/quoting per job.

Hmm.....

Pedroskis £1 per minute for a 2 man crew is about right then.

Makes a slow start in the morning pretty expensive.

Also makes travelling very costly- the fuel costs are nothing to the wasted time spent in the truck not producing.

1 hour travelling is £40 in wages/overheads whereas fuel costs would be maximum £20. Theres just no point in going easy on the gas!

That £1 per minute really focuses the mind doesn't it.

[detritus21]

I can run at 250 a day but there is no profit in it when you work out all the costs of wages and fuel. 250 a day will give for me £160 in wages for 2 men me being one of them. £30 worth of fuel the rest is on general running costs. 250 a day is really the bare minimum we could survive at if we were running at that everyday and only for a limited period of time.

 

I've done some quick calculations and reckon on needing to average £215 a day based on 50 weeks work working 5 days a week just to make a wage for myself and break even after insurance, fuel, yard rent, chipper repayments, wages (for 2 men - myself and another). In that there is no room for breakdowns, repairs, general maintenance, replacement equipment etc and certainly no profit.

 

Its quite frightening when you work it out. The problem you have is there are a many number of companies that can and do work for a lot less than the £400+ I aim for on my own work.