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  • Cost per hour for a truck

    Figuring the replacement cost of a new p/u with service body or van fully loaded with tools at $35,000 (or your best guess) and gas at $4+, anyone have any idea what that works out per hour, assuming a 2000 hour year?

  • #2
    Re: Cost per hour for a truck

    Lets assume a truck has a life span of around 5 years. I find that typical driving doing service work is around 30,000 miles per year. This equates to an approximate life span of 150,000 miles. Assuming an average of 12 MPG, this truck will use 12,500 gallons of fuel. At an average of $5.00 per gallon over the next five years (you know we have not seen the end of it yet) this truck will cost $62,500 in fuel to operate. It is safe to figure an additional $1500 a year to cover oil changes, tires, belts, etc. This addes another $7500 to your cost bringing your cost up to $70,000. Adding the purchase price we arrive at about $110,000. Divide that by 10,000 working hours and we come up with about $11 an hour.
    Distractions are everywhere, don't lose sight of your dream.

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    • #3
      Re: Cost per hour for a truck

      Yep, work trucks are expensive. Of course you also have to figure in liability insurance on the vehicle, (we don't want to be driving around without the proper licenses and insurance now do we?) And if you are in service, its unlikely to be billing out 8 hours/day every day unless you charge for travel time between jobs. I don't, so I wouldn't use the 2000 hour figure when calculating what my trucks' business costs are per billable hour.
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      • #4
        Re: Cost per hour for a truck

        you can figure you truck cost and over head will be 18% of you ticket total of each job. you labor should not exceed more then 20% of a ticket total. start working with percents to find you true cost of being in business.

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        • #5
          Re: Cost per hour for a truck

          Originally posted by ora View Post
          you can figure you truck cost and over head will be 18% of you ticket total of each job. you labor should not exceed more then 20% of a ticket total. start working with percents to find you true cost of being in business.
          I don't use percentages at all. I use a system for calculating your actual costs. Similar to Randall Hilton's system which is quite simple. You add up all your annual actual costs of doing business, add in a profit margin, and divide it by your annual billable hours. And then you have your exact hourly rate.
          Last edited by Service Guy; 06-29-2008, 10:10 PM.
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          • #6
            Re: Cost per hour for a truck

            Originally posted by Service Guy View Post
            Yep, work trucks are expensive. Of course you also have to figure in liability insurance on the vehicle, (we don't want to be driving around without the proper licenses and insurance now do we?) And if you are in service, its unlikely to be billing out 8 hours/day every day unless you charge for travel time between jobs. I don't, so I wouldn't use the 2000 hour figure when calculating what my trucks' business costs are per billable hour.
            I did not account for auto insurance and tabs, better add another $1 per hour to cover those, bringing your total to $12 an hour on a 2000 hour schedule. However, we all know there are only about 1000 billable hours in any given year plus or minus a few.
            Distractions are everywhere, don't lose sight of your dream.

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            • #7
              Re: Cost per hour for a truck

              Originally posted by Devine Plumbing View Post
              I did not account for auto insurance and tabs, better add another $1 per hour to cover those, bringing your total to $12 an hour on a 2000 hour schedule. However, we all know there are only about 1000 billable hours in any given year plus or minus a few.
              You forgot the cost of liability, for licensed work.

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              • #8
                Re: Cost per hour for a truck

                Originally posted by Devine Plumbing View Post
                I did not account for auto insurance and tabs, better add another $1 per hour to cover those, bringing your total to $12 an hour on a 2000 hour schedule. However, we all know there are only about 1000 billable hours in any given year plus or minus a few.
                I would have to let a guy go if all I could get out of him was 1,000 hours per year. Even after vacation, sick pay and Holidays he needs to be a lot closer to 1,900 than 1,000 hours per year.

                Mark
                "Somewhere a Village is Missing Twelve Idiots!" - Casey Anthony

                I never lost a cent on the jobs I didn't get!

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                • #9
                  Re: Cost per hour for a truck

                  Originally posted by ToUtahNow View Post
                  I would have to let a guy go if all I could get out of him was 1,000 hours per year. Even after vacation, sick pay and Holidays he needs to be a lot closer to 1,900 than 1,000 hours per year.

                  Mark
                  Lets take a closer look at this. Fifty working weeks in a year after holidays, vacation, sick pay, etc. If a guy could work 1900 billable hours a year that computes to 38 billable hours a week. This breaks down further to 7 hours and 36 minutes of billable time a day. Lets say we don't pay for lunches or time spent travelling back to the shop at the day's end. This leaves 24 minutes to gather materials at the shop and drive to maybe one jobsite. In new construction, maybe. In service, not a chance. You might be lucky to get 1500 billable hours a year, depending on what type of work they are doing. In less of course you are charging portal to portal and for time spent picking up materials, etc. then 1900 might be feasible.
                  Distractions are everywhere, don't lose sight of your dream.

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                  • #10
                    Re: Cost per hour for a truck

                    Originally posted by DuckButter View Post
                    You forgot the cost of liability, for licensed work.
                    Sorry, thought we were talking about auto expenses here. Typically auto liability is included in a general liability policy. Maybe not for some of you bigger guys. As a one-man operation is there another policy I should get in addition to my general liability policy, and my commercial auto insurance policy?
                    Last edited by Devine Plumbing; 06-30-2008, 01:01 AM.
                    Distractions are everywhere, don't lose sight of your dream.

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                    • #11
                      Re: Cost per hour for a truck

                      Originally posted by ToUtahNow View Post
                      I would have to let a guy go if all I could get out of him was 1,000 hours per year. Even after vacation, sick pay and Holidays he needs to be a lot closer to 1,900 than 1,000 hours per year.

                      Mark
                      In the plumbing service business 4-5 hours/day billable is normal. (unless you charge T&M and charge for drive time between calls)
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                      • #12
                        Re: Cost per hour for a truck

                        Originally posted by Devine Plumbing View Post
                        Lets take a closer look at this. Fifty working weeks in a year after holidays, vacation, sick pay, etc. If a guy could work 1900 billable hours a year that computes to 38 billable hours a week. This breaks down further to 7 hours and 36 minutes of billable time a day. Lets say we don't pay for lunches or time spent travelling back to the shop at the day's end. This leaves 24 minutes to gather materials at the shop and drive to maybe one jobsite. In new construction, maybe. In service, not a chance. You might be lucky to get 1500 billable hours a year, depending on what type of work they are doing. In less of course you are charging portal to portal and for time spent picking up materials, etc. then 1900 might be feasible.
                        I don't know where you get not a chance my service guys did it for 20-years under me and so fa 9-years under the new guy. The guys take their trucks home at night and need to be on their first job at 8 AM. From there the customer pays travel time from job to job. Every guy was scheduled for an 8-hour day and many ended up with OT due to emergencies which were billed as such. Each guy also worked 12-weekends per year on call. The shops that have guys sitting around waiting for work or running to the supply house or shop are wasting money for both them and their guys. If you plan your jobs right the supply house drops the material off at the job or at the shop. You don't send a real plumber to the supply house or to the shop you have a golpher for that kind of running.

                        Mark
                        "Somewhere a Village is Missing Twelve Idiots!" - Casey Anthony

                        I never lost a cent on the jobs I didn't get!

                        Comment


                        • #13
                          Re: Cost per hour for a truck

                          Originally posted by Service Guy View Post
                          In the plumbing service business 4-5 hours/day billable is normal. (unless you charge T&M and charge for drive time between calls)
                          Which we did/do.

                          Mark
                          "Somewhere a Village is Missing Twelve Idiots!" - Casey Anthony

                          I never lost a cent on the jobs I didn't get!

                          Comment


                          • #14
                            Re: Cost per hour for a truck

                            Originally posted by ToUtahNow View Post
                            I don't know where you get not a chance my service guys did it for 20-years under me and so fa 9-years under the new guy. The guys take their trucks home at night and need to be on their first job at 8 AM. From there the customer pays travel time from job to job. Every guy was scheduled for an 8-hour day and many ended up with OT due to emergencies which were billed as such. Each guy also worked 12-weekends per year on call. The shops that have guys sitting around waiting for work or running to the supply house or shop are wasting money for both them and their guys. If you plan your jobs right the supply house drops the material off at the job or at the shop. You don't send a real plumber to the supply house or to the shop you have a golpher for that kind of running.

                            Mark
                            Haven't billed for in-between travel time, but will consider it.

                            Couldn't agree more about getting your supplies. I'm a one man operation the majority of the time and my goal is to never go to the supply house. When I have too I see guys from the larger companies there when I walk in. Guess what, they are there when I "run" out.

                            One of the guys commented once that "haven't seen much of you lately." I told him I hope he never sees me there. He says, "Why?"

                            Told him, I can't make money at the supply house.

                            J.C.

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                            • #15
                              Re: Cost per hour for a truck

                              Sounds like you guys need to loosen up a little and live life and enjoy what you do
                              I mean, if all you do is worry about how much money you lost because you had to go to the supply house then your spending to much time worrying about money. I figure, I`ll make what I make and I`ll enjoy the day and BSing at the supply house is good PR work as I get allot of jobs from the other plumbers
                              When I was young I worried about how much I could make in a day but not anymore as I now see allot of friends dieing off that never got to enjoy the day.
                              Maybe that`s why I`m so happy all the time
                              http://www.all-clear-sewer.com/

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