The offseason is the perfect time to evaluate what you did last year and plan for the next year. For CLIP Lawn care that means calculating our costs per man hour for the previous year, and forecasting your hourly costs for next year. As you grow you need something to measure your productivity by, This sheet will help you get started.
Using CLIP software makes it easy to figure out your company’s costs per man hour. There are built in reports such as job costing and employee efficiency available. These can help you see which jobs are making you the most profit.
The instruction/reason for this is below, the spreadsheet is under the videos.
Testimonials we’ve received.
Here is what our customers say about the importance of tracking costs per hour:
“It pays to discover…the yards that pay you back. Take that a bit further and say that pay you back and then some. How is everyone doing with reviewing their CLIP job costing reports and weeding out the unprofitable jobs? Some of my foremen are surprised that we aren’t doing as well as they thought on some jobs. They do pay attention to the man-hour ratings on jobs, but until you look at the annual average it’s hard to see the complete picture. It just goes to show you that no matter how experienced you are you have to track your numbers to know your numbers.”
“I was wondering how you handle this info that perhaps you are not doing as well as expected on certain projects. Do you go on ‘RED ALERT’ and investigate why, or do you change the pricing or drop them all together… I know for a fact that I have certain accounts that are ‘weak,’ but I hang onto them because dropping them would create holes in the route and/or manpower issues…For me, the tendency is to average the daily total and accept the fact that some customers are getting off ‘Cheap.’
How do you get out of this cycle w/o create a different havoc?”
Job costing will make you profitable.
“I used to think and worry about losing customers in my route if I raised prices, but I found that the only ones you lose are losers anyway. My great clients are happy to pay a fair and nominal increase.
One other thing we did the first time we ever raised prices based on our job cost reports was to go up only by the amount that was required to reach our profit goals. Before we were stuck on the round number pricing…$40, $50, $55, $60…. Now we may have a mowing job that is $47. It works for us and for some reason an $8 increase is more palatable to the client than a $10 jump.”
For more information about employee productivity, and pricing per hour see this post