Lost production hours

[RRS]

How do you guys compensate for lost production hours, or do you?

For example, my hourly rates are based on a 9 month season, 18 days/month, 6.5 hours/day, or 1053 hours/season already to compensate for downtime. But this year because of all the rain, I've only made production hours two months so far this year. We should have worked 702 hours by this point, but we're only at 658 because of downtime above my seasonal estimate. Last year was about the same, but I made up for spring and summer downtime in the fall. If the weather patterns stay the same as they have all year I may not have the chance to make up lost time this fall.

So how do you guys make up for it? Should I raise rates from this point on, try to cram extra hours in where I can, chalk it up as a loss? What do I do?

[RRS]

33 people with no idea. I know some of you guys are facing this problem this year.

[highlander316]

the only thing I woud say is not to raise rates, I don't see that as being a good idea. I would cram the extra hours if absolutely need be.

[Clim Cadidlehopper]

I cram extra hours in when I can, I don’t raise my rates, thou with gas prices I needed to this year (we all did). As for compensating for loss of time due to weather, I figure that in at the beginning of the year and have customers that always want things that can be done in that time ( build a patio, replace sliding door system, make custom chimney covers. …). That is one of the few nice things about being a 1 man crew. My equipment is paid for, till next year purchases, I don’t lowball my rates nor do I raise them, my steady customers count on that. Some months Diamonds, Others Ruby’s. I know its hard not to do but I don’t base it in hourly rates, instead I set a goal for the end of the year and do all I can to keep it on track.

[Phil Nilsson]

Be ready at all times to bring on extra temp help to keep production schedules ... don't punish the customer with higher prices because of rain.

[RRS]

I guess the question really answers itself. Do all you can do to make up the lost time where possible. Correct?

We're losing another day today with the much needed rain from Frances.

[Phil Nilsson]

It cost us big money in OT pay to catch up ... but having commercial accounts ... helped in that we were not always expected to show up weekly ... the work didn't go away but we were less dependent on weather ... cash flow wise ... same in winter ... got paid snow or snow snow a little or a lot ... and I wouldn't have it any other way. It was my primary reason for focusing on mostly commercial.

[Scaper-S2k]

I agree with Phil, I wouldn't raise rates. You will have to make the guys understand that you need to make up them hours. The hope is that it gets made up per week, or at least every 2 weeks. But when it gets far out of hand, it may be too late to catch up on all of those hours. Maybe just hope for a longer season!

One 'good' thing to look at is that you weren't paying payroll for those lost hours, unless you pay salary. That surely doesn't make up for all of it, but a little.

As Phil has noted before, track those hours per week so you can nip it in the bud before it gets too far out.

Also realize that your numbers are GOING to flucuate no matter how good you plan. Don't kick yourself too hard, you're no dummy it will likely all work out in the end. Just saying that you track all those hours shows you are on the right track.

[RRS]

Thanks for the advice. It's about what I expected to here, but hearing it from someone like you helps reassure me that I'm on the right track. Starting my second year I began tracking every number that came across my desk. That was the easy part. Figuring out how to apply all those numbers, and how they relate to one another has been an entirely different story. I wish there was a way to shorten the learning curve (I know, more business classes, but no time right now). Talking to folks on the forums helps, but sometimes there's a lot of BS to sift through to get to the answer.

[steve-o]

casey , i stayed out of this one because i am small time compared to you but i have these two cuts on tuesday that take about six hours now because of the rain we have had. i saw the forecast and called these people and asked did they mind a sunday cut . they did not care and i got it done. sunday was for sun and i still got rained on. they will be done this week on saturday weather permitting. i know you probably can't change your schedule but maybe you could just a bit when you see that forecast for rain.
steve

[RRS]

Yeah, it's not so much that we don't get the work done. It's that we have a certain number of hours that we need to work a day/week/month/year to make our budget work out. If I can't bill at least that set number of hours a day/week/month/year then it starts cutting into the bottom line so I have to find a place to make them up. If I can't make them up then I only have one option, lose the time. Then, over the years I can look at the number of actual hours worked, and make adjustments to my hourly rates if needed.

BTW Steve, I have a call into my applicator. I'll let you know tomorrow. Chances are he's too busy, but you never know.

[steve-o]

thanks, i wish i could give more help, but the bottom line in any deal is to take care of your clients. in the end you will be rewarded, budget or not. set your standards or goals and be mindfull that this is not the perfect world. drought one year and too much rain the next. over the long term it will balance out.it is very hard for me because like i said i am small now ,but i would love to be in your situation thinking about this as long as i could still be a one man deal.

steve

[RRS]

I'm small time too compared to most of these guys. My company is at maximum capacity for the equipment that I have. If I don't invest in equipment next year (primarly another truck) there will be virtually no growth in my business in 2005.

[Elwood]

Casey, are you doing maint.?? If so, how is your efficiency? I know rain has your hours behind, but when catching up on mowing, is your efficiency better than you expected? This is one area where "lost" hours can hide. As for catching up, all you or anyone else can do is to try to make them up when the sun is shining!

I wouldn't raise prices on routine maint., but for add on services, above and beyond what is contracted, if you can get a few bucks more, I would get it.

Another thought is to start counting leaves on the trees?? LOL Good Luck!!

[Phil Nilsson]

If I don't invest in equipment next year (primarly another truck) there will be virtually no growth in my business in 2005.

Maybe it's time to look into other avenues for growth ...