Tractor work pricing per hour

[Liquidsilver]

I put together a spreadsheet to figure my hourly cost.

For example:
HST filter cost $78 and needs changed every 200hrs.......................thats $0.39/hr
Trans, air, and fuel filter cost $90 every 400hrs.......................................$0.225/hr
Engine oil and filter.....$55..........200hrs ...............................................$0.275/hr
Super UDT oil............$150.........400hrs................................................$0.375/hr
Front tires ...........$400.........they last 1000hrs......................................$0.40/hr
Rear tires............$700...........they last 2000hrs.....................................$0.35/hr
Fuel. 2.5gal/hr.........~$2.50/gal............................................................$6.25/hr
Bushhog blades................$250.............replace every 200hrs..................$1.25/hr
Business insurance......Cost $600/yr.......put 200hrs / year on tractor..........$3.00/hr
Total tractor operating cost.................................................................~$12.50/hr

Factor in depreciation on tractor. Sure, the tractor will still have value after 5000hrs, but probably not without some major expense or rebuilds. So just assume tractor is going to be next to worthless at 5000hrs. Cost $20,000
So add $4/hr depreciation

Now add the truck and trailer cost....as its part of doing business as well.
Truck tires and trailer. Need them every 5 years. Which equates to 1000hrs of tractoring.
Truck tires...............$1000 ever 1000hrs approx on tractor.......................$1.00/hr
Trailer tires............Same $1000 ever 1000hrs.........................................$1.00/hr
Truck maintenance (oil, filters, brakes, etc).....$200/yr..............................$1.00/hr
Truck/trailer insurance.......................$1250/yr.......................................$6.25/hr
Truck fuel for hauling....500gal/yr........$1250/yr......................................$6.25/hr
Total truck and trailer expense..............................................................$15.50/hr

Truck and trailer depreciation, that at some point will need replace also. Probably $25k over 10years (and that may be low). So that factors about $12.50/hr as well.

Pushing $45/hr just to be able to be in business.

Sure, the truck and business expenses I correlate to hours based on the assumption of running the tractor for 200hrs a year for business. Obviously the more the tractor is used per year, the less the truck cost in terms of hours. But 200 is a good average for me over the last 3-4 years of commercial mowing.

And people wonder why my target is $75/hr.....or why I want $175 just to show up.

Guys running around with a broke down 1980's half ton, with an 8n and 5' hog, and no insurance, working for beer money.......no they dont have the overhead. You also never seem them on commercial accounts, or bank jobs to clean up abandoned properties, or realtor jobs for building lots, etc.

Organizing the operating costs like this is REALLY helpful to me. Thank you!

 

[LD1]

Organizing the operating costs like this is REALLY helpful to me. Thank you!

Obviously your numbers will be different than mine. Just plug in your numbers.

But its easy to overlook things, but it all adds up.

 

[Fallon]

As others have said, know your operating costs. If you don't know how much it costs to operate your machine over the long haul you could very well go broke working at a loss. I estimate my operating costs at $35/hr. May not be the most accurate, but it's close enough for me & accounts for machine depreciation, expected maintenance & repairs, insurance, fuel & probably a couple things I've forgotten.

As this is my side gig my focus is trying to get enough work to make the machine pay for it's payment each month. I had a L3200 for personal use, then started side work. I quickly realized I wanted a cab if I was going to do much work & that the machine could pay for itself. So I upgraded to the L4060hstc for the cab & other bells & whistles. I'm lucky in that I can afford to sit idle & make the payment out of my pocket if it's a lean month or I have better things to do. I enjoy tractoring so that doesn't happen much.

I started off with the intent to charge $70-75/hr. That didn't end up working as well as I'd expected. People want a firm quote not a shifting target. My standard now is to figure out in my head how long a job will take. Expected hours + transport (15 min to an hour depending on roading vs trailering) * $75 * Pain the *** & uncertainty factor. The pain in the *** factor figures in more than I thought it would. Some jobs are just gonna suck, beat you or the machine up for whatever reason. People will still pay sometimes if you put in a high bid, but it pays for your pain. I've bid some jobs with higher unknown s a bit low. I figured they would pay me to learn a particular skill or techniqie. Id make less than normal in the pocketbook, but gain skill. Often that skill is estimating. Sometimes even bidding low I make noticably more than my usual rate, sometimes not.

Friends & family generally pay hourly at or slightly over my operating costs. There is high trust already there & they are getting a great deal, but then they owe me favors. I'm happy to work hourly commercially, especially if somebody has not well defined scope on what all they want done. But so far most everything has ended up being fixed price bids.

 

[PILOON]

Just curious.....

How do you handle customers when....

You tell them $75/hr.......and they ask "well how long do you think it will take you?

And how do you handle a customer if you estimated it taking you 4 hours.....so they are thinking $300......and it actually takes you 6 hrs ($450). Do you ever have them question that? Or say "I though you said it would take 4 hours....I only have $300"?

Assuming you discovered some unknown or hidden obstruction you have a justifiable 'extra' charge.

If you simply knowingly under quoted just to get the job then the client is justified in being upset and probably will give you a bad name.

The proper way to handle this sort of dilemma is probably, ( like 1 hour into the job) stop and confer with client pointing out the discovery and get the OK to proceed, this way he knowingly accepts the extra costs. (worst is you lose 1 hr fee but not get a bad rep)

On the other hand some clients make it a game to entice and trap workers into low ball situations and find any or the smallest excuse to not pay.*

*Once bid and quoted in writing a job @ $12K that involved travel and lodgings and to witch I always added 5% to advance disbursements (common practice in some trades)
3 months later I was still in collection stages and they refused the travel totally and simply remitted a check for $10,000. and told me to sue them for the balance, and added it'll cost U more than your write off and you'll lose as well.
The owner was a lawyer (and a politician)
To him it was a game. eg a simple con artist with a law degree.
I later learned that I had to fly to that job was due to the fact that no locals would deal with him anymore.

 

[EJP1234]

You'll be busy at $65/hr... but you'll also be eating ramen noodles and scratching your head on how to make your bills...

Your not going to make a living with a tractor, it's not great at dirt work, it's not great at mowing lawns... it's a tool that has a specialty purpose, and nitch work is hard to keep busy at and should be priced accordingly, and $65/hr is horribly low... I charge $150/hr to my clients for my time and I push paper. My foreman makes $25-28/hr and I charge $130/hr for him... sounds extreme, until you see all the back end costs like the truck, tools, health care, retirement, insurance etc etc etc.... $65/hr is essentially $130k a year, but then subtract those truck/trailer/fuel/maintenance costs and all the others, think you'll find if your steady 40/hrs billable 52/wks a year, your making about $15k at most or $7.50/hr...

 

[4570Man]

You'll be busy at $65/hr... but you'll also be eating ramen noodles and scratching your head on how to make your bills...

Your not going to make a living with a tractor, it's not great at dirt work, it's not great at mowing lawns... it's a tool that has a specialty purpose, and nitch work is hard to keep busy at and should be priced accordingly, and $65/hr is horribly low... I charge $150/hr to my clients for my time and I push paper. My foreman makes $25-28/hr and I charge $130/hr for him... sounds extreme, until you see all the back end costs like the truck, tools, health care, retirement, insurance etc etc etc.... $65/hr is essentially $130k a year, but then subtract those truck/trailer/fuel/maintenance costs and all the others, think you'll find if your steady 40/hrs billable 52/wks a year, your making about $15k at most or $7.50/hr...

Around here you're going to be eating ramen noodles at any rate because there's not enough work to support you. And 65 an hour is still on the high side around here. There's multiple people that'll bring a skid steer out for that price. If dirt work was the goal they'll get more done in an hour than the OP. And there was no mention of the op wanting to do this full time. That makes it a little unfair to factor in cost not directly related to the job.

 

[rustyshakelford]

If I don’t like the job I’ll bid it to where I will like it or sub it out to someone that helps me out on occasion and still make some money.

When we were still building our place and before we had a tractor I hired a “buddy” to come mow about 10 acres. He blew me off 4 times with various lies from running over his moms cat to flat tires. He finally showed up unannounced while I was an hour away at Lowes with a 25 hp kubota and 4’ mower. He took off and spent about 3 hrs getting hammered drunk and then left. Showed up the next day and mowed another 1.5-2 hrs and got drunk again. In total he mowed around 3acres if not a little more. I asked him what I owed him and he said whatever I thought it was worth.

I gave him $100 he seemed like he wasn’t happy with that. Should’ve given me a price from the start. I wasn’t happy that he was here 5 hrs and only mowed 3 acres or he lied to me over and over. I hate liars. If I was having to pay him by the hour I would’ve been livid unless it was $20. We live about 45 mins apart

Brett

 

[Sprinklerman]

I dont call it tractor work , its just work . The tractor makes the job profitable . Grade and seed a new lawn , I bid the job at $ 2000 . If I did it with a rake and shovel or I do it with my tractor , its the same price . I have had people want to pay by the hour . And supervise the job , I give them my price and I work steady , not fast , not slow .

 

[EJP1234]

Around here you're going to be eating ramen noodles at any rate because there's not enough work to support you. And 65 an hour is still on the high side around here. There's multiple people that'll bring a skid steer out for that price. If dirt work was the goal they'll get more done in an hour than the OP. And there was no mention of the op wanting to do this full time. That makes it a little unfair to factor in cost not directly related to the job.

When someone mentions it's a business and is asking about employee payroll in the OP, it sure seems full time.

Either way, $65/hr is a crash and burn price for a business for part time unless your just trying to offset your own equipment costs...

 

[4570Man]

When someone mentions it's a business and is asking about employee payroll in the OP, it sure seems full time.

Either way, $65/hr is a crash and burn price for a business for part time unless your just trying to offset your own equipment costs...

I must've missed that the first time I read it. I hope his local market is better than mine. Otherwise he's going to fail at any price. And with no snow it's going to be harder to stay busy full time.