Any business savy guys here
- Thread starter LabLuvR
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You first need to look at your desired outcome and keep it simple. I have always approached it based on the KISS philosophy - namely - "keep it simple stupid". Therefore, charge only one price and don't add extra's to complicate matters. Let your work speak for yourself and compete with everyone within your travel zone. In order to compete, keep it simple, and equalize matters by not charging for travel time. However, factor in a per mile rate into your price to cover fuel, etc... I have always used the IRS business rate which in 2008 is currently set at 50.5 cents per mile up from the 2007 rate of 48.5 cents. So if you have to travel 50 miles factor in $25 for the round trip. That should cover gas, oil, depreciation, etc...which in theory is how the IRS sets the rate. The rate can change more than once per year (up or down) which makes it a variable so you do not lose out. The IRS also doesn't give you a hassle given it is their rate and all you need to do is keep a log account rather than receipts, etc... and you should always be on the positive side. In the end, you are do not in the transportation business and customers really HATE to pay you for transportation time. Don't give them a reason to look elsewhere. The fact that you can say you do not charge labor for transportation will be a big positive.
In the end equalize the competitive bid, do good work, be willing to broaden your travel region and I guarantee you will turn work away.
In the end equalize the competitive bid, do good work, be willing to broaden your travel region and I guarantee you will turn work away.
Yes, the acreage rate would be based on contiguous acres. The mileage rate set by the Feds won't cut it, I will have to charge more. The reason is, I will be using a heavy duty truck to pull a trailer with a lot of heavy equipment. My miles per gallon will probably be in the neighborhood of seven which really sucks. But I see what you are saying.
AlanB
Elite Member
If you have not done it yet, you need to start assembling your business "team"
I would say a banker and a CPA (An attornery if doing anything complicated like a LLC) and then an outside advisor, maybe your dad, maybe an extension agent, maybe someone from Planet, or someone in a similar business in a non-compete area.
The point being, that the decisions, and what you base it on, will be made somewhat by these guys input, ie, what you are discussing above, needs too be addressed by your CPA and how you should do it BEFORE you start.
The money I have spent with the CPA has come back too us many times over in saved mistakes. I started with a "bookkeeper" and AFTER the audit, went to a CPA.
There are basically two methods to pick from, and both camps will tell you theirs is "correct", sound's to me very much like the lawncare biz.
Camp 1, go look, see what you think it will bear, factor in your rough costs in your head, take into account outside factors such as PIA factor of the client, shoot em a price and see if they go for it.
Camp 2, figure out each individual cost, do time motion studies, figure out milage, gas costs etc. and work up individual prices on each component of the job, add it together, add P&O then give a price.
I am a camp 1 guy, and think most the camp 2 guys end up just taking a more educated swag then we do, but it still boils down to a swag.
Good luck with whatever way you choose.
Remember, you can go to bed Tired, broke and hungry doing this, or go to bed broke and hungry. You don't have to do that job, and if it is not paying out, just go to bed broke and hungry. The temptation will be there at some point to cut your prices to get the work.
I would say a banker and a CPA (An attornery if doing anything complicated like a LLC) and then an outside advisor, maybe your dad, maybe an extension agent, maybe someone from Planet, or someone in a similar business in a non-compete area.
The point being, that the decisions, and what you base it on, will be made somewhat by these guys input, ie, what you are discussing above, needs too be addressed by your CPA and how you should do it BEFORE you start.
The money I have spent with the CPA has come back too us many times over in saved mistakes. I started with a "bookkeeper" and AFTER the audit, went to a CPA.
There are basically two methods to pick from, and both camps will tell you theirs is "correct", sound's to me very much like the lawncare biz.
Camp 1, go look, see what you think it will bear, factor in your rough costs in your head, take into account outside factors such as PIA factor of the client, shoot em a price and see if they go for it.
Camp 2, figure out each individual cost, do time motion studies, figure out milage, gas costs etc. and work up individual prices on each component of the job, add it together, add P&O then give a price.
I am a camp 1 guy, and think most the camp 2 guys end up just taking a more educated swag then we do, but it still boils down to a swag.
Good luck with whatever way you choose.
Remember, you can go to bed Tired, broke and hungry doing this, or go to bed broke and hungry. You don't have to do that job, and if it is not paying out, just go to bed broke and hungry. The temptation will be there at some point to cut your prices to get the work.
