revenue per hour revenue per man hour faq What does the Revenue Per Hour section mean?

Lots of companies make the mistake of looking at that section and asking "Is that what I'm supposed to charge per hour for my work?"  

Definitely not.

When we talk about the Revenue Per Hour on a job, it includes the total selling price of the job - including all labor, materials, equipment, subs, overhead and profit - divided by the number of hours estimated.  It's the total revenue your crews are producing per man hour.

On your budget, your revenue per hour is calculated by taking your budget's total sales, and dividing it by the number of man hours in your field labor budget minus the % of unbillable hours that you have.

So, if your company had $1,464,000 in sales and 23,750 man hours in the field labor budget, with 10% unbilled factor, the math looks like this:

1,464,000 sales / 23750hrs X (1-10%)

1,464,000 / (23750 x .9)

1,464,000 / 21,375 = 68.49

Which equals $68.49.  What that means is, the average revenue per hour on your jobs needs to be $68.49 per man hour in order to hit your sales budget.

 

 

Note that the average revenue per hour for maintenance work will be a lot lower than the average revenue per hour for construction installation work.  Here are some averages:

Work Type Low  High
Install/Construction Jobs $80 $140
Maintenance Jobs $45 $60

 

Remember that maintenance jobs have a lot less material and therefore don't produce as much total revenue (sales) per man hour as construction/install jobs.

 

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