Stop Guessing Your Numbers: Direct vs. Indirect Costs Explained
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What is the true break‑even number for a lawn‑care business and why does it matter?
Hello and welcome to the Green Industry Podcast, your go-to guide for building a more profitable and thriving lawn care and landscaping business. Your host, Paul Jameson, is the author of five best selling books, including Cut That Grass and Make That Cash, and his latest, Level Up Your Money, all available on Amazon and Audible. Now, get ready for more expert insights and practical strategies. Strategies to boost your business and level up your life. Here's Paul Jameson.
Welcome back to the program. I'm Paul Jameson down here in beautiful sunny Florida. I hope you are doing well wherever you are in this world. Today on the program, we're going to talk about knowing your true break-even number. Actually, crunch some numbers here, do some math, because for me personally, once I started seeing my break-even, what like what I had to make to be able to pay. All of my expenditures. It really was a wake-up call because I was like, well, that's a lot more than I realized. And that lit a fire under my rear end to uh get out there and make sure that I'm working hard enough, not just to break even, but to get into the profit. Uh area. Of business and and try to get as much profit as possible.
So anyway, I feel like a lot of lawn care business owners don't actually understand the true cost of running a business and the actual numbers of how expensive it truly is. I was getting a haircut and uh hot shave the other day, and I was just talking to my barber because he's he's a small business owner. Um he he started his own like mobile uh haircut business where he he has like a van. It's a pretty cool little setup. But I was just talking to him, I was like, dude, there's there's so many expenses to writing a business. And uh I think it kind of opened his eyes a little bit. And uh I I hope I mean I kind of scared him a little bit, but but people uh might be good at cutting hair or cutting grass, but they don't understand all of the direct cost um and indirect cost uh associated with business.
So I want to kind of get into uh the details of that on today's program. We're gonna dive right into that. I did want to let you know if you missed it, uh previous podcast I interviewed the big fish, Chris Kaiser. He's the president CEO of Uh Equip uh well of Outdoor Power Equipment Institute, who owns the Equip Expo show. So I've been wanting to get him on the podcast for a while to clarify everything going on with the show moving toward Lando in twenty twenty nine and what's new at this year's show. And so we covered all those topics. So um in the case you missed uh you missed it, um that episode is live and and it was a banger, as the as the youth say, uh, which means uh it was good. Or at least I thought it was good.
I I had a lot of questions for Chris and he answered them all. So it was insightful for me. Um, so I'm sure you'll find value in that conversation. All right, well, let's dive right into um the numbers. Um, I'm going to break down The exact numbers of a a two-man crew today. Um, defining the direct cost, the indirect cost, and calculating a a true break-even point. Um, but I wanted to give a an actual example. So I feel like a lot of people who listen to the program, you own your own lawn care business and in so many different shapes and sizes. I know Jeremy Talboy, he's a friend of the show. Hi, you know, his business is doing over a million dollars a month, you know, on uh during the season. And and that's a big company.
And then we have other guys who are just a one man, you know, one um one crew, whether it's two people or three people, it's just one crew, and we have everything in between. So For my example though, I'm gonna I'm gonna just base math off of one crew. That's two men. So basically a two person crew. Is the the I literally have a yellow pad here. And uh I mean it's literally yellow and it's it's literally worn. I I I I like jotting down all this stuff. So I just jotted down some math and I hope to open your eyes because during tax season and and this is why I tell folks Keep your numbers squeaky clean.
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Chapters
8 chapters
1
What is the true break‑even number for a lawn‑care business and why does it matter?
0:03–6:24
2
How do indirect costs (overhead) affect my profit margins?
6:24–10:29
3
What expenses are considered direct costs for a two‑man crew?
10:29–16:04
4
How can I calculate the monthly cost of running a two‑person crew?
16:04–21:07
5
What is the break‑even hourly rate for a two‑man lawn‑care crew?
21:07–27:30
6
Why should I charge $75‑$85 per man‑hour instead of lower rates?
27:30–31:42
7
How do I use my numbers to create accurate, profitable quotes?
31:42–36:14
8
What tools and resources can help me keep my numbers clean and profitable?
36:14–43:25
Speakers
3 identifiedMore from Green Industry Podcast
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Why You Should Be Charging $100+ Per Man-Hour with John Pajak