Job Costing

[Will D]

At Mikeysfest this year one of the guys mentioned the importance of job costing. I’m right in the middle of modifying maintenance plans and pricing for my commercial customers, and I like the idea of basing my price on my expenses/profit, rather than picking a number out of thin air (which is basically what I’ve done before). I just don’t know how to go about it. I know how much my equipment cost, and I can figure out chemical usage, but other than that I have no idea how to calculate. Any tips to get me started?

 

[BIG WOOD]

Consider yourself as an employee, and a business owner on the job. How much does it cost to pay a well seasoned employee? And how much are you worth? Factor in not just the per hour cost of what the employee makes, but also add in the cost to pay payroll.

You've got expenses such as
chemicals
fuel
insurance
cost of equipment

and most importantly:
-payroll for both employee and you
-average 20% net
and more that I can't think of right now. It'll come to mind later today

 

[hogjowl]

Well, that was a wasted DAP, but I’m not surprised. I’ll post a more helpful post later, when I have time.

 

[they live]

Well, that was a wasted DAP, but I’m not surprised. I’ll post a more helpful post later, when I have time.

You should reflect on this.

 

[hogjowl]

Okay …
The very first thing a carpet cleaner should do is find a good accounting software program. I’ve never found a perfect one that supplies me with all the metrics I need but I’ve always stuck with Quick Books . It provides me with all the financial metrics that I learned to track in college. A lot of the recommendations regarding percentage goals that I learned don’t fit a carpet cleaning business but if you constantly review your financial statements you will be self aware of what’s normal for you and you’ll eventually begin to see ways you can improve. You can’t learn and adjust unless you have information.
I attended Strategies For Success back around 2000 and even the financial recommendations taught by Chuck Violand were somewhat unrealistic for me, but it’s a good primer. I think he unconsciously targets his financial info to larger multi truck businesses. Probably because they’re his target market.
There are some things I feel I need to track that I don’t have a program for … and aren’t provided in QB’s. I tried Service Monster for a couple of years but just could’nt learn to trust their data.
Here are the things I track manually:
Square footage per room and total for the job.
Time on the job:
S.F. Earned per job
Monthly I know what the averages are by room and flooring type. I can give a customer a quote in three ways … :
By consulting their specific address if I’ve been there before, by comparing other houses I’ve cleaned on their street or by my total averages gained by tracking it over time.
There will be things you will want to tweak to meet your needs but I’d suggest you start SOMEWHERE and stick with it. There’s no point in being stupid.

 

[Will D]

Okay …
The very first thing a carpet cleaner should do is find a good accounting software program. I’ve never found a perfect one that supplies me with all the metrics I need but I’ve always stuck with Quick Books . It provides me with all the financial metrics that I learned to track in college. A lot of the recommendations regarding percentage goals that I learned don’t fit a carpet cleaning business but if you constantly review your financial statements you will be self aware of what’s normal for you and you’ll eventually begin to see ways you can improve. You can’t learn and adjust unless you have information.
I attended Strategies For Success back around 2000 and even the financial recommendations taught by Chuck Violand were somewhat unrealistic for me, but it’s a good primer. I think he unconsciously targets his financial info to larger multi truck businesses. Probably because they’re his target market.
There are some things I feel I need to track that I don’t have a program for … and aren’t provided in QB’s. I tried Service Monster for a couple of years but just could’nt learn to trust their data.
Here are the things I track manually:
Square footage per room and total for the job.
Time on the job:
S.F. Earned per job
Monthly I know what the averages are by room and flooring type. I can give a customer a quote in three ways … :
By consulting their specific address if I’ve been there before, by comparing other houses I’ve cleaned on their street or by my total averages gained by tracking it over time.
There will be things you will want to tweak to meet your needs but I’d suggest you start SOMEWHERE and stick with it. There’s no point in being stupid.

Thanks for the advice, good stuff!

 

[hogjowl]

I can tell you what my monthly, quartly and yearly costs are, what my average dollar amounts earned are, what my profit margin is per flooring type and as a whole and what my averages are as described above. Using that information, I know what I need to charge for each flooring type to be profitable.
It’s more than $35 per room.

 

[BIG WOOD]

Well, that was a wasted DAP, but I’m not surprised. I’ll post a more helpful post later, when I have time.

It must be that time of the month for you again. You’re getting hangry. Is your blood sugar low again? And don’t forget to change your tampon