When you're in the landscaping game, a key part of getting your quote right is figuring out your labour costs accurately. It's not just crunching numbers; it's about knowing exactly what each job will entail, so you can quote competitively and still turn a profit. This guide from Simpro helps you do just that
Calculating labour costs isn't just about basic maths. It involves looking at the bigger picture. You need to consider more than just wages and benefits – things like overhead expenses, how productive your team is, following regulations, and planning resources wisely. When you take all these factors into account, you can get a clear view of your expenses, use your resources efficiently, and keep your business financially healthy.
1. Employee hourly rates, expected hours, and overtime rates
To know the real cost per hour of labour, you need to sit down and break down hourly rates, expected work hours, and how you handle overtime pay.
2. Project scope
The size of a project determines how you allocate resources. By thoroughly assessing what the project requires – such as the skills needed, equipment specs, and timeline – you can ensure your labour costs match what the project needs for completion.
3. Material costs
Material costs have a big say in how labour costs shape up – especially in trades, where both are tied together. Adding material cost estimates into your labour cost calculator helps keep your budget in line and makes managing projects cost-effective.
4. Labour rates
Labour rates aren't just about wages – they cover overheads, benefits, and extra pay too. Figuring out these comprehensive labour rates ensures your pricing strategy considers all the costs involved, ensuring you stay profitable and competitive.
5. Timeframe (start and end dates)
The timeline of a project affects how you divvy up labour costs, especially when it comes to having enough people available, scheduling efficiently, and meeting deadlines. When you factor these time considerations into your calculator, you can plan resources better and cut down on unexpected costs.
6. Tasks and assignments
Breaking down tasks clearly spells out what labour and resources are needed. When you define tasks and who’s responsible in your cost of labour calculator, you make operations smoother and reduce risks during project execution.
7. Fluctuating costs (material prices, travel, meals, or lodging)
Predicting changes in costs, such as shifts in material prices, travel expenses, and accommodation fees, keeps your labour cost estimates strong against market changes. By factoring in these variables, you improve budget precision and make your operations more adaptable.
8. Provisions
Having a back-up plan is crucial for managing labour costs effectively. Setting aside reserves in your calculator, like funds for unexpected costs or project changes, protects your finances and keeps your project on track.
Time to implement your labour cost calculator for strategic planning
Using a labour cost calculator isn't just a practical move – it's crucial. By using detailed calculations and data-driven insights, you give your business the tools to plan projects better, improve competitiveness, and ensure profitability.
Simpro can help you with your labour cost calculations by:
Providing tools for precise time tracking, job costing, and rate management.
Ensuring accurate payroll and billing.
Providing detailed job costing breaks down labour expenses while scheduling and dispatching tools optimise resource allocation.
Enabling comprehensive reporting and integration with payroll systems to streamline processes and improve financial oversight, helping businesses manage labour costs efficiently.
Built by the trades, for the trades, Simpro is a total business software for the trades – including landscapers. To learn more, visit simprogroup.com or contact sales@simpro.co.nz