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Message: <blockquote data-quote="TriHonu" data-source="post: 65296" data-attributes="member: 897">I agree with most of reaperman's comments.What you need to charge is based on your costs, risk and desired profit.Costs:  you need to acknowledge that everything wears out.  You must consider not only depreciation of all the equipment you use but the costs of maintenance and replacement of normal wear items.  This includes the truck, trailer, loader, attachments and everything you use on the job.   If you don't account for all costs, you will end up putting some money in your pocket but in reality lose money on the job.Risk: I would advise you to research your states laws pertaining to businesses and liability.  In my state if you do not establish a legal business separate from yourself you are risking everything you own if something goes wrong.  Limited Liability Corporations (LLC's) are relatively easy to establish. The business becomes a separate legal entity from yourself.  If there is a problem and you get sued, the business assets are at risk; not your personal and real property (like your house and savings). Even with an LLC, insurance should be considered mandatory.  Be careful when you establish your business's scope of work.  If you include excavation (as defined by your state, is accessing soil a certain distance below surface grade) your insurance costs can be significantly higher.  If you limit your scope and jobs above that depth you may be able to establish your business as a Landscaper.  Insurance costs are less since the risk is less.  Insurance companies are very aware of the costs of damaging any type of underground utilities.  Damage to fiber optic cables can cost a company tens of thousands of dollars per hour while service is interrupted.  If you not operating as an insured business entity, you will be liable for these costs personally.Also check on the One Call Laws in your state.  Even if the property owner calls for a locate where the work will be accomplished, some states require the business that will actually perform the work to have their own locate ticket on record.  There can be significant fines to you if you don't have an open ticket.Finally Profit:  once you can put the numbers to your costs including:1. Equipment Operation, Depreciation and Maintenance Costs.2. Administrative Costs of running the business (licenses, insurance, administrative, taxes, billing, advertising, etc.)3. Cost of getting you and your equipment to and from the job.4. Risk Contingency Costs5. What you are charging for your LaborYou can now add what you desire for profit.  This is not your labor cost, but what your business gains after all costs.  For a business to be viable you must be able to be profitable.  You can't base your rates on what other businesses are charging.  There will always be someone who will do the work cheaper.  Remember you are selling a service.  How you market and provide that service allows successful businesses to charge more than the cheaper guys and still stay busy making a profit.If you are curious about how equipment operating costs are calculated, the Army Corps of Engineers has a large pamphlet <a href="http://publications.usace.army.mil/publications/eng-pamphlets/EP_1110-1-8/toc.html" target="_blank">Construction Equipment Ownership and Operating Expense Schedule</a>.  The US is divided into 12 regions.  It explains how to calculate your equipment costs specific to your region of the US and includes worksheets you can use to calculate the costs.A good friend of mine had a one man "Landscaping" business. (Pickup, dump truck, trailer, Bobcat and Cat 920 loader).  His costs to just be in business were $5000 per year.  He needed to make $5000 beyond all expenses before he was even profitable for the year.  Up to that point it appears you are making money pocketing your hourly wage, but the business is in the red.Ask yourself what are your goals and how much you are willing to risk to achieve them.  We have many guys in our area operating without licenses or insurance and low bidding jobs.  The interesting fact is they don't last long.  They are continuously replaced by others trying the same thing...</blockquote>

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