How do I figure out my cost per crew hour?

Start with labor. Add each crew member's hourly pay, then add employer payroll taxes and workers' compensation. Employer Social Security and Medicare tax (FICA) is 7.65% of wages at the federal level, though the Social Security part stops at a yearly wage limit, and your state may add more. Ask your accountant for the exact load for your company.

Next, add equipment. Truck payments, chipper, saws, rigging, fuel, repairs and replacement parts all belong in the number. Many owners leave out repairs and the cost of replacing gear that wears out, which makes the hourly figure look lower than it is.

Then add a share of overhead: insurance, phone, software, office costs, marketing and your own pay. Divide the yearly total by the hours the crew can really bill. The key word is billable. A crew that works eight hours may only bill five or six once you count driving, setup, breaks and cleanup.

The result is your cost per crew hour. Nothing in it is profit yet. Your price needs to cover this cost plus a margin you choose.

Redo the math at least once a year, or when fuel, insurance or wages change. A figure from three years ago can quietly hide a loss.

Use the crew day rate calculator and type in your own numbers. The starting values are examples that you should change.