% for employee wages

[WillS]

What is the % of your employee and owner wages out of total revenue? Another thread I read on here said normal is 25-30%. If that is what is normal, we are way above right now. I'm thinking our prices need to be raised to be able to lower the wage %. We raised pricing on upholstery/rugs because we were low to competition a few months ago. Carpet cleaning prices haven't changed in 2 years. (On avg. 50 residential a week we clean have some sort of carpet cleaning service in the order). We are around 40% sometimes higher for 4 technicians and 2 owners. What is your average??

 

[Mikey P]

30% if by themselves

20% if with a helper

Helper gets hourly.

 

[Desk Jockey]

I think for the effort you are putting into your work you are far too cheap.

1) You need to charge more
2) buy a tm and start soaking carpets like the rest of us.

Serious, I know you have concerns about moisture but you'll be able to achieve the same results but with much more ease and a lot faster.
Get a demo from one of the local distributors.

 

[WillS]

Since we don't plan on getting a TM, raising prices on carpet would be the option or pushing more on the add-on upsells. We don't bonus technicians out yet, but upsells we should start doing a 20% bonus on those I'm thinking. Return customers is a huge part for us, so I'm wondering if I can add $10 addt. per room cost than we charge now and not have problems with it.

 

[WillS]

2 technicians working together your saying should be approx 20%?

 

[Desk Jockey]

I do keep an eye on you and I can see you care very much about the equality of product you deliver. I think you are short changing yourself.
Raising your prices you might lose a few clients but i wouldn't think many. They have already experienced your service and know the value.

Just raise you rates and you'll not look back!

 

[WillS]

That is the only thing to get the wages % down if 20-30 is normal... This is our first experience having this size of crew so don't really have anything to look back on to compare.

 

[Desk Jockey]

Wages shouldn't be more than 30% for a combined crew.

 

[PrimaDonna]

You need to sit in on SFS, Day 1. This is all the stuff Chuck goes over!

General rule is that direct labor payrool expenses should be around 20% of revenue (including your payroll taxes etc).

 

[Joe Appleby]

labor with burden below 30% of revenue.

 

[clean image]

Will, your asking for employee and owner......
As owner you should pay yourself as employee, and on top of that an owner(investment, risk,management) is separate pay
So I would separate for a more accurate number.


Yes chuck say 20%, says its a management problem if your not there. Most multi-truck in class were much higher. Guess that's why were there...

Taking Joe Appleby number. So if your burden is 25%, then 24% is your labor goal. (x=30/1.25)

 

[Joe Appleby]

Burden is payroll taxes, work comp., medical, dental, PTO... Ours is around 7% of revenue.
Our labor for on location carpet cleaning runs between 19.5% and 22.5% of revenue. Our goal is to
keep our carpet cleaning labor with the burden below 30%.

Our hard surface division has a much lower labor
cost (but a higher chem cost).

Expenses vary with each business model.

 

[Shane Deubell]

You are one hell of a manager if you can keep labor/burden at 20%.
With any kind of volume.

Most policy and procedures are not that difficult, doing it is!!!

 

[Joe Appleby]

I'd Have to assume Chuck's low # would include water damage revenue.

 

[Chet]

Chucks number has always been 20% if you want to run a profitable business. Yes, you can go higher but something has to give and it's usually the owners profits.

 

[Desk Jockey]

Well that explains it, I'm over paying my employees. We struggle to keep it under 30.

 

[Shane Deubell]

Sounds like "blood money" to me.
Could i do it, of course but wouldnt be worth it to my personal life and stress.