PDA

View Full Version : What would be the net profit?


Vassk1
08-27-2005, 11:53 PM
I have come up with a scenerio purely for arguments sake. I am sure I will get a few different answers depending on how efficient you each consider yourselves.

This is for a one man show owner operator. It takes 30 minutes to service the lawn including drive time. He mows 15 accounts a day, 5 days a week for a total of 75 lawns. We'll say average price of account is $27. We will also say company is in SW FLorida on a 40 week schedule.

This leaves us with revenues of $2025 a week and $81,000 a year.

My question is this: In your experienced opinion what how much would be the expenses for this business. Remember, it is a solo operation with no payroll. I figure the expenses are primarily gas for equipment, maintanence, insurance, phone, advertising and what ever else you can come up with. Please do not include any health insurance. Assume all the equipment is paid for. Also assume no storage space is needed for equipment. You may include licensing fee if there is one as well.

THank you.

Vassk1
08-28-2005, 01:22 AM
40 looks and nothing. Wow.

Wells
08-28-2005, 01:50 AM
What kind of equipment?
21" mower with 5.5 HP or a 72" ZTR with 28.0 HP

CuttingCrew
08-28-2005, 01:52 AM
First off, your equipment is never paid for. Even if you pay cash for it you must stick money away for replacement.

My spread sheet figures, based on the way I operate have you pulling about $50.00 per hour based on 7.5 hours (15 30 min. lawns with drive time) cutting per day and 0.5 hours for unexpected things.

$80,000 a year gross.

Based on my equipment list below (with a hydro 36) and a new, F-250 bare bones work truck, life expectancy of 4 years on all mowers and truck and trailer, a 6X14 enclosed trailer, 3 years on all 2 cycle equipment (thats pushing it), $1000 per year on advertising (low) with all MY cost for insurance and so on (most things not listed. If you want a copy of the spread sheet, e-mail me).

Cost of doing business= $17,642 per year
35% for taxes= $21,823
Net money to you= $40,528

For what its worth, I've put a ton of time into figuring the cost of doing business for me, but it may not even be close for you and I'm sure it still needs some fine tuning when I get my final numbers at the end of the year.

Mike

Vassk1
08-28-2005, 02:36 AM
Thanks for the info.

Runner
08-28-2005, 03:33 AM
What are your Consumer bills? How much time is spent at the shop? How much are your office costs? How much are your administrative costs? How long does it take to do the paperwork and billing? What type of system is in place (program,...etc.).

bobbygedd
08-28-2005, 10:29 AM
you just described my business, before payroll. except my lawns average $30, and there is other work as well, but, just using your numbers- your total overhead, if u used the same stuff i do, will cost you ABOUT $10,000 a year. you can draw a paycheck of $71,000. this is taxable income, and the amount of tax you'll owe will depend on how many dependants you have, etc, etc

Vassk1
08-28-2005, 05:19 PM
How many cuts do you have each year up in NJ?

ProLawns
08-28-2005, 06:20 PM
I've been averaging between 50 to 60% of my gross receipts being my gross income.

example, $100,000 gross receipts = $50-60,000 gross income
your net income from this amount will vary depending on your personal
deductions.

ProLawns
08-28-2005, 06:28 PM
I forgot to add. That's with one part time employee most of the year.

Howie's Lawn Care
08-29-2005, 12:30 AM
you just described my business, before payroll. except my lawns average $30, and there is other work as well, but, just using your numbers- your total overhead, if u used the same stuff i do, will cost you ABOUT $10,000 a year. you can draw a paycheck of $71,000. this is taxable income, and the amount of tax you'll owe will depend on how many dependants you have, etc, etc
What equipment do you use? You already said you hate 21" mowers and you have small yards (according to your price). Also, what kind of truck do you use or do you have a Pontiac Bonneville woth a trailer hitch? You claim to have one of the most fuel efficient set-ups.

topsites
08-29-2005, 12:52 AM
This is for a one man show owner operator. It takes 30 minutes to service the lawn including drive time. He mows 15 accounts a day, 5 days a week for a total of 75 lawns. We'll say average price of account is $27. We will also say company is in SW FLorida on a 40 week schedule.

This leaves us with revenues of $2025 a week and $81,000 a year.

My question is this: In your experienced opinion what how much would be the expenses for this business. Remember, it is a solo operation with no payroll. I figure the expenses are primarily gas for equipment, maintanence, insurance, phone, advertising and what ever else you can come up with. Please do not include any health insurance. Assume all the equipment is paid for. Also assume no storage space is needed for equipment. You may include licensing fee if there is one as well.

THank you.


... those are some lofty figures...

The basic rule of business is thirds:
1/3 for cost.
1/3 for taxes.
1/3 for you.
Blam!

(pic of emeril flashes through the mind)

... good luck cutting 15/day in Jul-August.

sildoc
08-29-2005, 01:38 AM
... those are some lofty figures...



... good luck cutting 15/day in Jul-August.


I cut more than 15 a day in july and aug. I have 26 one day and 25 another. average time on each lawn those days are around 15 min each and on to the next. Average price is 25. That and I might add the average temp in july and august is 99-101 humidity of 35-45%.
As for the total profit margin I will bet you will be right around the 35000 mark after taxes. Maybe a little less if you are putting away for new machines every 4-5 years.

topsites
08-29-2005, 02:01 AM
I cut more than 15 a day in july and aug. I have 26 one day and 25 another. average time on each lawn those days are around 15 min each and on to the next. Average price is 25. That and I might add the average temp in july and august is 99-101 humidity of 35-45%.
As for the total profit margin I will bet you will be right around the 35000 mark after taxes. Maybe a little less if you are putting away for new machines every 4-5 years.

Well with THAT humidity I could do hopscotch while running circles all day myself, I used to work at Weslo/Proform in Logan UT and I can tell you that 100 of YOUR degrees feels like 80 of OURS as on the east coast the humidity is generally 80-90% or higher which means sweat runs down your body and that's usually BEFORE you start working then once you start the sweat pours down and soaks your pants until it looks like you done peed all over yourself.

The other problem *I* see is I do 10 yards/day in the SPRING when it is BUSY but demand here goes DOWN in the summer and if I pick up TOO many more customers in Jul-Aug then I have a problem in september when things pick back up... Now MAYBE in spring I cut SOME yards once/week but in mid-summer MOST ALL of them are on 2-3 week schedules and once/month is not that unusual. Forget the crews, the original guy said it would be solo, and unlike some of you, I don't cut WEEKLY regardless of time of year either as I believe this is a form of customer rip-off, but that's just me.

Then you got grossing 80k/year solo, in FLORIDA? This is my 4th year and I COULD break 33k but am not going to because of tax reasons, I plan on cruising out right below 33k and this is my best year yet, so either someone is lying their tail off (which I suspect) or something else isn't right because the figures do NOT add up. We're NOT just talking lalala go cut however many yards... FIRST you need the equipment THEN you need the CUSTOMERS and last but NOT least you need the EXPERIENCE and I am sorry but nobody in their first year or two is going to gross no 60+k solo, that is absolute horsecrap in my book.

And then if you got 35k out of 80k AFTER taxes, hell that's around 50 percent just for LABOR and if you're paying yourself THAT much then something isn't right, sorry but something does NOT add up, not in this part of the country.