Do you charge your friends for tractor work?

[HawkinsHollow]

Around the DFW area, anywhere between $60 to $100/hr. depending on tractor size and the specific job. But $75 is where I'm at. That's right at 25% profit. The cheaper guys typically don't carry liability ins.

Wait so you are telling me that when you are doing tractor work at $75 you only make 25% of that as profit? So you are paying yourself $18.75? Am I not understanding something?

 

[paulsharvey]

Wait so you are telling me that when you are doing tractor work at $75 you only make 25% of that as profit? So you are paying yourself $18.75? Am I not understanding something?

In theory, you should be paying yourself an operators pay, and then "profit" above your hourly pay.

 

[HawkinsHollow]

In theory, you should be paying yourself an operators pay, and then "profit" above your hourly pay.

That makes more sense. So out of that $75 he has already paid himself and the 25% profit goes in the bank.

 

[Oaktree]

I was raised to be a good neighbor. So for the most part, I'll help out anyone I know, within reason of course.

Same here. Probably 2/3 of my neighbors have their own tractors so not much call for tractor work. I'll plow out the end of one neighbor's driveway in the winter (he has a snowblower, but the tractor will handle what the town plow puts there much easier). Even though they're younger than me, neither is in very good health. They'll "repay" us by feeding the cats when we're away, some (yummy!) baked goods and occasionally a $25 Irving gift card.

I'll do some trail bush hogging for our local snowmobile club, though only sections I can drive it to (don't have a trailer that can handle it).

 

[paulsharvey]

That makes more sense. So out of that $75 he has already paid himself and the 25% profit goes in the bank.

So, the way I've had it explained, its better to pay yourself, say $25/hr and make $25/profit; then $50 pay, as if you ever sell the business, you can show that the Business is making money.

Edit: also, business loans, ect. Possibly even insurance. Thats not to say you dont take the profits out,

 

[Jstpssng]

So, the way I've had it explained, its better to pay yourself, say $25/hr and make $25/profit; then $50 pay, as if you ever sell the business, you can show that the Business is making money.

Edit: also, business loans, ect. Possibly even insurance. Thats not to say you dont take the profits out,

I used to estimate that 1/3 of my intake was income. The other 66% went to insurance, taxes, and other expenses.

 

[ssgp2]

Wait so you are telling me that when you are doing tractor work at $75 you only make 25% of that as profit? So you are paying yourself $18.75? Am I not understanding something?

After all expenses.

 

[ssgp2]

That makes more sense. So out of that $75 he has already paid himself and the 25% profit goes in the bank.

Correct

 

[HawkinsHollow]

Correct

Still not clear. So you are paying yourself $18.75 (25% of $75) or are you paying yourself more and the $18.75 is leftover profit for the company? Not sure I would have help my buddy if I was only taking home $18.75.

 

[ssgp2]

Still not clear. So you are paying yourself $18.75 (25% of $75) or are you paying yourself more and the $18.75 is leftover profit for the company? Not sure I would have help my buddy if I was only taking home $18.75.

$18.75 is what's left after all expenses. ie. my pay, insurance, maintenance costs, fuel, mileage etc.