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Tree service

Tree Service Gross Profit Calculator

Works gross profit on a job, where equipment time is the line most often omitted.

Your numbers

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Result

Gross profit $7,800
Gross margin 21.1%
Total direct cost $29,200
Profit per working day $354.55
That is $7,800 at a 21.1% margin, about $354.55 for every working day. Overhead still has to come out of it.

Gross profit is what is left after the cost of doing the job. Overhead comes out of that: the building, the office wages, the vans, insurance, software and advertising. A healthy gross margin still loses money if overhead is larger.

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How the calculation works

Revenue less direct cost gives gross profit and margin, with the direct side being burdened labour, equipment time at an internal rate, fuel, disposal and any subcontracted work such as a crane. Equipment is the line that decides whether this figure is real: a removal using a bucket truck, chipper and grinder for a day has consumed substantial equipment value, and costing only labour and fuel reports a margin the business did not earn.

What moves the number

  • Equipment hours charged at an internal rate.
  • Burdened labour, including the high comp component.
  • Disposal volume and haul distance.
  • Subcontracted crane or specialist equipment.

Where this one goes wrong

Gross profit calculated without equipment cost is the most common distortion in this trade, and it systematically favours the equipment-heavy jobs that look most impressive. Costing a grinder at an internal hourly rate frequently reveals that stump grinding sold as an add-on at a low price is barely profitable, while pruning with hand tools and a chipper is better than it looked. Crane hire is the other item to attribute properly, since a subcontracted crane on a large removal can be the largest single cost and a bid that treated it loosely loses money on exactly the jobs that felt like wins.

Before you quote

  • Charge equipment hours at an internal rate on every job.
  • Attribute subcontracted crane cost to the job that used it.
  • Compare margin by work type to find which jobs actually pay.

Questions

About this calculator

What is usually missing from tree job gross profit?

Equipment time. A removal using a bucket truck, chipper and grinder for a day consumes substantial equipment value, and costing only labour and fuel reports a margin the business did not earn. Charging equipment at an internal hourly rate corrects it.

Which tree work is actually most profitable?

It frequently surprises owners. Once equipment is properly costed, pruning with hand tools and a chipper often beats large removals per hour, and stump grinding sold cheaply as an add-on can be barely profitable. The comparison is only visible with equipment costed honestly.

How should crane hire be handled?

Attributed directly to the job that used it, because on a large removal it can be the single largest cost. A bid that treated crane hire loosely, or assumed a day when two were needed, loses money on exactly the jobs that felt like the biggest wins.

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The formula

gross profit = revenue - direct costs

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Please keep the attribution line. It is the only thing we ask in return.

How to use this calculator

  1. Revenue ($). Enter your own figure; the page starts at $37,000.
  2. Direct labour ($). Enter your own figure; the page starts at $16,000.
  3. Materials and equipment ($). Enter your own figure; the page starts at $11,000.
  4. Other direct costs ($). Enter your own figure; the page starts at $2,200.

The result updates as you type, so you can try a figure, see what it does to gross profit, and change it back. Nothing you enter is sent anywhere or saved.

A worked example

These are the figures the calculator opens with. Every number in the results column below is produced by the same calculation the page runs, so you can follow it through before putting your own figures in.

What goes in

InputValue
Revenue$37,000
Direct labour$16,000
Materials and equipment$11,000
Other direct costs$2,200

What comes out

ResultValue
Gross profit main result$7,800
Gross margin21.1%
Total direct cost$29,200
Profit per working day$354.55

That is $7,800 at a 21.1% margin, about $354.55 for every working day. Overhead still has to come out of it.

How sensitive the answer is

Holding everything else steady and changing only revenue, this is what happens to gross profit. It is worth knowing which of your inputs the answer actually hinges on, and which barely move it.

Revenue ($)Gross profit
$18,500 -$10,700
$27,750 -$1,450
$37,000 example above $7,800
$55,500 $26,300
$74,000 $44,800

Every other input is held at the example value while this one changes, which is not how a real job behaves. Treat it as a guide to which number matters most, not as five separate quotes.

What each figure means

Revenue ($)
A money amount, starting at $37,000.
Direct labour ($)
A money amount, starting at $16,000.
Materials and equipment ($)
A money amount, starting at $11,000.
Other direct costs ($)
A money amount, starting at $2,200.

What the results tell you

ResultWhat it is
Gross profitThe headline result. A money figure.
Gross marginA percentage.
Total direct costA money figure.
Profit per working dayA money figure.

Estimating is the easy part

The jobs you never hear about cost more than the ones you mis-measure. BDEVY builds the marketing, systems and automation that bring them in.