Mulch

The numbers this sheet uses

These are mine, measured on my own jobs in Central Texas. Yours might be $30 of mulch, might be $55. Use your number. Every line further down the sheet is arithmetic on these five, so get them right once at the top and the rest of the page cannot be wrong. Get the burden wrong and every number under it is wrong in the same direction.

Sell price to the customer

$120 a yard, installed

What the mulch costs

$40 a yard, delivered

What the crew is paid

$23 an hour, average

The burden

1.35

What an hour of labor costs

$31, the wage times the burden

What 35% buys

You picked $120 a yard because the market charges that for mulch, installed, and the mulch costs you $40. Here is what that decision signed your crew up for. The labor is $31 an hour, the $23 wage times the 1.35 burden, and if you are building prices off the raw wage you are underwater before the truck leaves in the morning. Now say your target gross margin is 35% of that price.

Take 35% of the $120 price and you get $42 of gross profit. That is what you are asking one yard to hand you. Subtract the $42 from the $120 and $78 is left. That is every dollar you are allowed to spend on this yard. Not a target. A ceiling. Subtract the $40 of mulch and you have $38 for the crew. That is it. That $38 buys all the labor on this yard, loading, wheeling, spreading, raking, blowing it off. All of it.

At $31 an hour, $38 of labor is 1.23 man-hours a yard. That is one person for one hour, added up across the whole crew, not 1.23 hours from each person. Run the same three lines at 40% and at 30% and you get three ceilings. At 40%, $32 is left for labor, which is 1.03 man-hours. At 30%, $44, which is 1.42. Look at the spread. Going from a 30% gross margin to a 40% gross margin is not a pricing decision. It is asking the same crew to go from 1.42 man-hours a yard to 1.03. The market already picked the price. Pick the margin, and the pace is what falls out.

A wage is what you pay. A burdened hour is what you sell. Only one of them belongs in a price.

The crew table

The 1.23 man-hours a yard is a budget. It does not tell you how many yards a crew should get down in a day, and it does not tell you whether the crew you sent actually hit it. The crew table does both, and the math is one division. The people on the crew times the hours they are on the job is the man-hours in the day. Divide by the man-hours per yard.

A crew of 2 spreading for 8 hours is 16 man-hours. The 16 divided by 1.23 is 13 yards. If they spread 13, they held the 35% gross margin. If they spread 10, they did not, and nothing about the price changed. A crew of 3 spreading all day is 24 man-hours, so about 20 yards. A crew of 4, 32 man-hours, 26 yards. A crew of 5, 40 man-hours, about 32 yards on paper, and a real crew of 5 rarely does that out of one truck. One loading point, one pile, wheelbarrows stacking up at the gate, and the fifth person is watching.

Notice which way that runs. When the market sets the price, writing down a fatter margin does not put more money in your pocket. It asks the crew for more yards in the same day, 23 where 20 would do. You keep the extra only if they get there. If they keep spreading 20, you made 35%, whatever the estimate says. Those are hours on the job, too, not paid hours. No crew spreads for every hour it is paid. The load-out, the drive and the staging are real hours, and the sheet keeps them out so the math stays clear.

Price or speed

So on mulch, which one do you chase, charge more or go faster? The grid on the sheet answers it, with the price per yard across the top, the man-hours per yard down the side, and the gross margin in every cell. With the market price at $120 and your target at 35%, the pace you need is 1.23. Get the crew about 11% faster, 1.10 man-hours a yard, and you are at 38% gross, about $4 a yard more. Or charge 8% more, $130 a yard, and you are at 40% gross, $10 a yard more. You ask the crew for 11% and get $4. You ask the customer for 8% and get $10.

Here is why it comes out that way. Every $10 of price is exactly $10 of gross profit, one for one, straight through. Productivity only touches the labor, and on mulch the labor is about a third of the price. So a 1% raise is worth $1.20 a yard, and a crew 1% faster is worth 38 cents a yard. That is about 3 to 1, and no amount of hustle changes the ratio. With overhead counted, speed is worth about twice what the gross grid says, because an hour the crew does not spend on the yard is an hour of overhead the yard does not carry. It is closer. It is still the customer's $10 against the crew's $8, and only one of those costs you a season to get.

Your target margin is yours to choose. You can influence productivity, but there is a ceiling on it. The price is the market's to give you, and the market can say no. Raise it past what the market will tolerate and you lose more bids than the raise was worth, and the grid does not know your close rate. But a lot of people spend a whole season grinding on the crew and will not spend one afternoon putting a higher number on the next 10 bids.

The gap

So far the crew table has run forward. You gave it a budget, and it told you what a full day of spreading should produce. Now run it backward. Start with the yards the crew actually got down and the hours they were on the job, and it tells you the pace they really worked at. That is how you will actually use it, and it is the one move this whole series is about.

It was always hard to measure production across jobs, because our jobs were always a lot of items. The scope was never just mulch or just sod. We did not really take on mulch-only jobs, but a repeat client gave us the chance to do one. The client wanted the landscape beds remulched for an event. The plants were fine. The mulch just needed to look better, and that let me track the math closely. A crew of 3, roughly 18 yards delivered to the site plus a couple in our truck, supposed to be a one-day job. I was surprised to hear it did not get done, and I was also excited, because for once I could check the math.

A crew of 3 and about 20 yards in one day is exactly what the crew table asks for at 35%. They got 15 down. The 24 man-hours divided by the 15 yards is 1.6 man-hours a yard, and the 1.60 row of the grid at $120 is a 25% gross margin. Not 35%. In dollars, the yard was priced for $38 of labor. At 1.6 man-hours and $31 an hour it took $49.60. The $11.60 difference came straight out of the $42 of gross profit, which leaves $30.40 a yard. The price held. The customer paid $120 a yard, as quoted. The margin was lost on the pace, and no invoice shows that, and neither does payroll. It only shows up when somebody sets the yards beside the hours.

Now put two owners on that same day. Ray's foreman texts him the yards and the hours when the truck is unloaded, and Ray divides before dinner. He knows on Tuesday that the crew held 25% and not 35%, and on Wednesday he is standing in that driveway looking for the reason. Dana's crew unloads the same truck and the day is over. The 15 yards are on the customer's invoice, the 24 hours are in payroll, and nobody puts the two next to each other until the accountant closes the books in December and the margin on mulch comes back thin. She is not doing anything wrong. She is counting by the month. Ray is counting by the job. Same crew, same 15 yards, and only one of them can tell you which driveway it happened in.

The budget was 1.23 man-hours a yard. The crew ran 1.60. That distance is the gap, and it is the only number on the sheet that is yours.

Where it goes wrong on your job

The budget of 1.23 was set by the price and the target margin, and nothing about your site is in it. These are the days that miss it. The crew was paid for more hours than it spread: a late start, a wait on the delivery, a second trip to the supplier. The site fought the crew: the pile got dropped at the street and the beds are behind the house, or last year's mulch has to come out first. The job was small: pulling up, tarping the driveway, edging and blowing off take the same hour and a half whether you brought 3 yards or 28, and on 3 yards each yard carries a third of it. More yards went down than you sold, because the beds were measured short or the bid said 3 inches and the crew spread 4. The supplier raised the yard and your estimate still carries last season's cost. A discount to win the job, rounded down on the phone. One more bed the customer asked for while the crew was there, and nobody billed it.

One job over budget usually has a story like one of those behind it. Write it down and move on. Five jobs over with no story is your real pace, and then one of three numbers has to move: the price, the pace, or what the mulch costs you. They run in the order of what is cheapest to test. A price takes 10 bids. A crew's pace takes a season.

What to do with this

Ten minutes, tonight, on a mulch job you already ran. Get the yards from the invoice and the crew's hours on the job from your foreman. A text is enough. Divide the hours by the yards, find that row on the sheet, and read across. If the number surprises you, watch the episode and run the next one the same way. If it does not, you have lost 10 minutes.