As inflation rises and the cost of living for everyone keeps going higher, you have to remember that your worker, like yourself, needs to afford to live there also. For those of you who live in San Diego like I do, you will know what I am talking about. If you don’t pay enough to compete with other employers, a good employee will not be around long. As Prices rise, Residential jobs are averaging $100.00+ hourly with Christmas lights paying $200/hr. during the slow season.
What I have found that works is Having a set price a worker will make per store. that way of managing costs is performance based and ideal. If they are efficient and focused, They will dictate their Ideal hourly rate. I do 72 storefronts every month and the time it takes for a proficient window cleaner motivated by the goal of $60+ hourly rate. I price it assuming all employee costs factored in. By the way, In my market, you need to make $60/hour to afford that one bedroom apartment. We have a $3000.00 average rent here in San Diego.
So how much do you need to charge to make that price in storefronts? I will break down the numbers using 4 models:
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Single owner/operator
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Owner operator and 1 employee
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Employee only both 1 and 2 person crew
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Independent contractor
Single owner/operator
This one is the most profitable of the lot when starting out. You need to factor in your future costs of Employees and all overhead. What you want to make is what your employee will want to make. No successful company makes enough to cover its expenses and worker wages and stops there. Profit starts after those 2 are covered. You are building a company. When you find and train the right people to fill your place and step away, that is what will be left over. For now, starting out, Save the overage for the slow period and also pay stuff forward. It’s always nice when you have everything paid out six months to a year in advance and keep putting money away to cover the next six months.
Working alone I have found that I can do 8 to 13 stores a day. To average $60/hr. I have to pay myself $75.00 per store.
Working with my son, who is also part owner, we keep it at $45.00 Per store. The average hourly is still the same. Some routes are more profitable than others and hourly rates jump. 10-13 stores can be done in about7-9 hrs.
Owner operator and 1 employee
By design you have geared up the routes you have so all the things needed to train and keep an employee are covered. Profitability is set. Protocols for safety such as setting out cones, how to address the customers as you will be asking them to move, and how to get the signature on your app for payment should be taught. Safety when driving and all other protocols should have been developed by this time. Make sure your new employee is ready to work on their own. While working with you, start them at $30/store and let them know that their pay rises when they are up to speed
They decide how soon their pay will rise. Give them the parameters of what they need to do to qualify for the raise and let them work on reaching your goals.
Once up to speed, Bump them up to $45 per store. Then when they are ready to go solo, $75 per store. Both of these pay rates come out to be about $60/hr. when up to speed.
Employee only both 1 and 2 person crew
Your employee is now solo and getting $75 per store. At this rate, He or She should average about $62.50 per hour worked. 10 stores can be done in about 10-12 hrs. The company’s gross costs should be about $1265.50. Profit will be slimmer than the 30% desired but employee will be making enough to continue living in San Diego.
Employee Model - 1 Worker
*** Inputs:**
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Hours Worked: 12
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Stores Completed: 10
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Price Charged per Store: $140.00
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Number of Workers: 1
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Cost Paid per Worker (per Store): $75.00
*** Net Labor Costs:**
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Net Labor Cost (per Store): $75.00
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Net Pay per Worker: $750.00
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Hourly Average Pay: $62.50
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Net Cost of Work Done: $750.00
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Overhead:
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Vehicle Costs (Daily Average): $55.00
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Gross Overhead (Daily Cost): $138.00
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Workman’s Comp+SS+Medicare: $322.50
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The Real Numbers:
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Gross Income: $1,400.00
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Employer’s Gross Cost: $1,265.50
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Gross Costs Per Store: $126.55
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Gross Hourly Costs: $105.46
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Net Income (Profit): $134.50
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Desired Profitability:
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Costs + 30%: $1,645.15
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Actual Price per Store Needed: $164.52
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Employee Model - 2 Workers
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Inputs:
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Hours Worked: 9
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Stores Completed: 12
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Price Charged per Store: $140.00
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Number of Workers: 2
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Cost Paid per Worker (per Store): $40.00
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*** Net Labor Costs:**
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Net Labor Cost (per Store): $80.00
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Net Pay per Worker: $480.00
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Hourly Average Pay: $53.33
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Net Cost of Work Done: $960.00
*** Overhead:**
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Vehicle Costs (Daily Average): $55.00
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Gross Overhead (Daily Cost): $138.00
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Workman’s Comp+SS+Medicare: $412.80
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The Real Numbers:
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Gross Income: $1,680.00
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Employer’s Gross Cost: $1,565.80
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Gross Costs Per Store: $130.48
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Gross Hourly Costs: $173.98
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Net Income (Profit): $114.20
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*** Desired Profitability:**
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Costs +30%: $2,035.54
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Actual Price per Store Needed: $169.63
It happens with most chain stores
