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Dirty Water
09-15-2006, 11:16 PM
I have a feeling that a lot of people here who complain about lowballers don't have a clue how to properly run a business.

I've noticed a trend that 95% of the people on this board have a brand new $45 k rig to pull a lawnmower with.

These are the same people that complain about being put out of business by lowballers.

Here is my solution:

Don't Decrease your price, increase your profit.

You guys figure it out.

:dizzy:

rodfather
09-16-2006, 08:39 AM
I've noticed a trend that 95% of the people on this board have a brand new $45 k rig to pull a lawnmower with.

I find that extremely hard to believe since 1/2 of them don't have a driver's license yet.

YardPro
09-16-2006, 09:30 AM
lol.....

we were talking about that yesterday. We saw this f350 crew cab, extended bed, 4x4, with ALL the bells and whistles.

it was pulling a 12' trailer with an old toro wheelhorse. It had a few homemade weed eater racks on the trailer with ryobi weedeaters.
the guy had logo's in the windows of the truck....so he was not a hobbyist...

what a waste of money.....

topsites
09-16-2006, 08:12 PM
It is one reason why I fail to understand how so many Lco's who are just getting into the business feel the need to go right out and buy a Ztr... I think perhaps it's coincidence that as a new owner one simply wants to follow what others are doing, and it would appear that every Lco has a Ztr so it would further appear a Z is a required item for grass cutting.

I feel fortunate in that respect, as I was told different... I was told you start with what you can afford and don't take out loans. Save your money and buy it outright and if they want to offer a No payment / No interest loan at that time then fine, but if you don't have the money in the bank then you can not afford it.

It is the reason why in 5 years I've owned 4 Wb's but never a Z, and it kills me to watch all these guys running out and spending 7k+ when for 3-4k one can get a brand-new Wb and for 1-2k a nice used one.

The truck I fully agree with as well, I got lucky in my 2nd year I found a 1986 D-250 for $1,400 - I've put close to 60k miles on it and am still driving it today. It frustrates some to have no radio and no a/c, but as you said: It enables me to offer a low cost while still raking in good profit.

But in the end who pays? The guy with the Wb's that are all paid for or the guy with everything in hock? Keep in mind, anything on loan not only costs more in interest and the fact you have to sit down every month to write out the stupid check, but in many cases (such as a truck) it also costs considerably more in insurance (yeah because you have to have FULL coverage on a loaned vehicle).

So I was thinking today, you know, you really only work about half as hard to make ends meet if you do things the hard way and save your money first. And you work a LOT more hours to make up for that little bit of extra that you need when you always owe money... Your hands are tied one way, or you have more freedom the other, but one involves discipline and the other not much thought.

Then again, it is the reason why many fail, and this is good in an off-the-wall way, heh.

olderthandirt
09-16-2006, 08:39 PM
I find that extremely hard to believe since 1/2 of them don't have a driver's license yet.

And another 1/4 are part time and use the truck for other things like pulling boats campers etc. The mowing just allows them to help pay for the fun

ALarsh
09-17-2006, 01:44 PM
I saw a guy yesterday with a new bright yellow H2 pulling a 10 foot trailer with a JD residential lawnmower cutting lawns. I wish I had my camera with me!

YardPro
09-19-2006, 12:32 PM
he's probably having to moonlight just to make the truck payment

lsylvain
09-20-2006, 09:21 PM
OMG a couple of people on this site who actually agree with me. I'm dying sitting here watching these guys compain about low ball this and low ball that. And talk about how expensive everything is. I started my biz with a datsan then moved up from that into a 1978 1/2 ton chevy that I got for $500.00. I traded that even swap for a 79 3/4 ton and used it for 3 years before I sold it to a guy fo $1200 all I did to it in the 3 years was a new clutch and an alternator. Profit!!! I now have a 98 GMC 3500 4x4 that I paid cash for ealier this year. I own everything except my house. You still have to set money aside to purchase new stuff down the road but that is a whole lot easier to do when you dont have to make $1000 in payments to a bank every month.

I have a thread going now trying to determine the real value of a ZTR. http://www.lawnsite.com/showthread.php?t=160674
I am basically trying to justify purchasing a ZTR. This is something that I have pondered for a long time in fact I just did a search and the first time I braught up this question was Feb of 2003. Check it out, I would love to hear what you have to say.

allenh60
03-03-2007, 02:53 PM
C:\Documents and Settings\HP_Administrator\My Documents\My Pictures

allenh60
03-03-2007, 03:01 PM
This is what I started with, If it will show up as a picture.

Vikings
03-03-2007, 03:35 PM
There is nothing wrong with brand new equipment and trucks. There's nothing wrong with borrowing money or leasing either.

It might not be the right thing for everyone but it's common enough to be a great business practice.

The only thing that does make sense is don't buy equipment you don't need. I don't need (and can't afford) new trucks but I want new mowers this year. I'm thinking of either quick 36's or John Deere's. Not a lot of dealers around here, I can't find any used exmarks wb's.

Flow Control
03-03-2007, 04:38 PM
I saw a guy yesterday with a new bright yellow H2 pulling a 10 foot trailer with a JD residential lawnmower cutting lawns. I wish I had my camera with me!

That was probably the "wizkid."


I had someone tell me they thought that LCO's must make a lot of $$$ since most of them drive nice rigs. I told him they made enough money to make the payment and that is about it. I go by the philo that work trucks are work trucks, nothing more then that. So only get the basics of what you need and stay away from any bells and whistles. A LCO/friend of mine just picked up is new F-350 dually ($55K worth) I told him he could of got 2 nice work trucks for that. To each their own. Another prob I see in the industry is we are majority business operator types and not business owners, or in other words we should all know how to do the work we are selling but few of us know how to run a profitable Business. Was talking to another LCO the other day that saying how other companies are going to be lowering their prices just to keep "the guys" busy since new construction is down. I just told him that I am going to raise my prices and stay out of the rat race, since it might be wiser to be more idle this year instead of increasing output & possible headaches while decreasing profits and concentrate on other areas such as service work. My area is gonna go through some real tough times regarding new installs over the next few years and I really believe when the dust settles actual business owners that are wise to overhead and other costs usually ignored, will be left standing while business operator types that don't figure in all the extras will start folding.

salandscape
03-03-2007, 06:25 PM
There is nothing wrong with buying new trucks, like everyone esle has said as long as you can afford it! Personlly I wouldn't pull up in front of a customers house in a beat up '86 Ford, I'd be too embrassed. I sell myself as professional, my trucks, equipment, guys and myself all look professional everyday. I see these guys with ancient equipment and leaking trucks, they may have a higher margin then I do, but every year I pick up more and more of their customers. A smart business man pays cash, and reinvests in their business, and only buys what can be afforded! To each his own I guess.

gmcplowtruck
03-03-2007, 07:01 PM
i agree with the guy above i wouldent show up in a peice of crap and have the equipment and truck breaking down on me
its alright to start out with a tractor and a older truck but you cant call yourself a professinal once you start making money upgrade thats my opinion

mslawn
03-03-2007, 11:13 PM
Who cares what somebody else drives and how they run their business. There will always be complainers.Yes, I have a superduty lariat that stays full of grass in floorboards hooked to gooseneck trailer - DOT compliant, then I have two single cab half tons w/t models that stay hooked to 14ft single axles to keep them under 9999 #s, along with the ztrs to boot, and plenty of clientelle to fund my operation.
.

LB1234
03-04-2007, 12:02 AM
I saw an H2 with a plow on it. Front tires were nearly rubbing the rims. It was actually kinda funny.

thebobcatkid86
03-04-2007, 02:08 AM
There is nothing wrong with brand new equipment and trucks. There's nothing wrong with borrowing money or leasing either.

It might not be the right thing for everyone but it's common enough to be a great business practice.

While that may be true, I can hear my dads voice right now "The phrase 'lose your ass' come to mind"

Az Gardener
03-04-2007, 02:31 AM
I asked a couple of clients what their opinion of the vehicle that shows up is. One woman told me "she didn't care if we were naked and on bicycles as long as the yard looked good".

You don't need to be in an 86 beater but you also don't need a 45-k truck pulling lawnmowers. A good, clean dependable 20-K truck will keep you on schedule and not struggling to make payments. You should have lots of miles left on the truck when the payments are over and then you are really in the money.

LindblomRJ
03-04-2007, 04:23 AM
I saw a guy yesterday with a new bright yellow H2 pulling a 10 foot trailer with a JD residential lawnmower cutting lawns. I wish I had my camera with me!

That was probably the "wizkid."


LOL :laugh: :laugh: :laugh:

There is nothing wrong with buying new trucks, like everyone esle has said as long as you can afford it! Personlly I wouldn't pull up in front of a customers house in a beat up '86 Ford, I'd be too embrassed. I sell myself as professional, my trucks, equipment, guys and myself all look professional everyday. I see these guys with ancient equipment and leaking trucks, they may have a higher margin then I do, but every year I pick up more and more of their customers. A smart business man pays cash, and reinvests in their business, and only buys what can be afforded! To each his own I guess.

Equipment should be good operating condition. Doesn't matter if it is brand new or older than most the users here it should be taken care of. Growing up I spent a lot of time on equipment (Tractors, graders, a D4 cat) that was all older than me.

Purchases should be viewed as how will this make money for me and my business.

ED'S LAWNCARE
03-04-2007, 08:50 AM
When I started my biz I already had my truck 02 f250 4x4 lariet crew. Paid for. I also use it to pull my camper and use on my horse farm. Needless to say everyones situation is different, and no one's personification of what it should be is for all. The ones that have higher pmts to in biz will do 1 of 2 things, 1. work more to support it (again it's up to him) or 2. go out of biz (more customers for the next guy).

salandscape
03-04-2007, 09:58 AM
Don't get me wrong I would never advocate buying a 45K p/u to tow a lawn trailer. I use 2500 chevy work trucks with rubber floors and crank windows. I just advocating keeping them clean inside and out and tproperly maintaining them. I can resonably pay them off in two years then the aim is to keep then for an addtional 5.

Az you do have point that many customers don't care what YOUR guys pull up to the job in to do the work, they already have hired you, as a professional, and you do a great job for themd.

But it is a different story when a prospect is looking to hire someone and one pulls up with ripped jeans, a butt hanging out of his mouth, and a leaking truck. While the other look respectable. Like anything the proof is in the pudding, but it is my iopinion that a professional will always have a leg up.

mslawn
03-04-2007, 10:58 AM
Originally Posted by Vikings
There is nothing wrong with brand new equipment and trucks. There's nothing wrong with borrowing money or leasing either.

It might not be the right thing for everyone but it's common enough to be a great business practice.

Reply by bobcatkid86
While that may be true, I can hear my dads voice right now "The phrase 'lose your ass' come to mind"

In order to grow you will eventually have to borrow money. If you are scared to "lose your ass" then you need to stay solo. For the guys that want to grow, they will find it a must to borrow money at some point or the other.

topsites
03-04-2007, 12:28 PM
I'm not sure I agree entirely, while I do see that newer equipment can translate into higher pay because customers see where the money is going, it really is a matter of having the right equipment for the job!

If you were to hire someone to cut your lawn, and the guy shows up with a brand-new Kenworth sleeper rig with a flatbed trailer and 8 brand-new Wb's and 4 Ztr's loaded, then he quotes you double the price, what you have here is an idiot who went way overboard.

While I'm also not against taking a loan out, I think doing so is only ok if you can afford it, meaning you already have the money in a High Yield money market account, and since they're giving you a 0% interest rate, you decide to take the loan and let your money continue earning interest.

I just now bought a '95 D-2500 slt laramie, that's a nice truck but it's still 12 years old and I only paid 4 grand for it (that's with a TON of upgrades done) and it's all paid for which means I only need Minimum Liability Insurance on it (translation: several hundred $$$ / year saved). Vs. taking out a loan, on a car / truck if you do that, you will be required to have FULL coverage (even if you don't want it), and so in addition to the payments even on a 0% loan, it always costs more to buy an auto w/ a loan.

And like many other guys, I started with a 1974 F-250 not quite 6 years ago, then the next year bought a 1986 D-250 for $1,400 which lasted me until the end of last season: 4 years out of a 1,400 truck, I can't beat that with no 30,000 truck over 20 years, thou the reliability of a newer vehicle is nice. In that sense, I have to get 8 years out of the $4000 '95 to even approach a decent profit with it... Which, she'll be 20 years old when that day comes.

It has something to do with the property tax, and how after 5-6 years everything I bought is appraised at its lowest value (at least where I live it is) and then it doesn't go any lower but the idea is to operate as long as possible with equipment that is now worth the least in terms of cost (translation: less taxes for one, but this is where the equipment actually starts paying for itself).

mslawn
03-04-2007, 03:52 PM
Topsites, my post was not directed towards a solo operation like yourself.
In order to grow, I mean a company with employees, those are the ones that need the borrowing power. In my opinion a solo operations growth is very limited and as far as those operations that go to the next level, growth is unlimited. A solo operator can operate without ever having to borrow a dime, but his earnings are very limited because a body can only do so much.

supercuts
03-06-2007, 10:38 AM
WOW, i dont want to get yelled at but heres my 2 cents. i take out loans all the time. building credit is a good thing. as for the $40k trucks. there is a fipside to every investment. it is clearly not the same situation for all of us.

i recently thought about my 00 f350 xlt 4x4 diesel w/ 62k i bought it in dec 02 for $20,000 even. after finacing it was about $24,400. ad the repairs ive had over the last 4 years(roughly $6,000), puts me at around $30-$31,000 invested and the truck now has 128k miles. i priced identical 06's leftovers last fall and i had dealers down to 31-$32K (list was $40k)and ford had 0% finacing. so, in the 4 years ive owned my truck, i could have bought a brand new truck, it would now be 2.5 years newer with only 66k miles for the same money. its a crapshoot. $20k seemed so cheap at the time. but looking back, its clear.

i personally would never pull up to my jobs in an 84' rust bucket. my situation may not be the same as yours though. im in a wealthy area and homes average over $600k here. my customers would not tollerate a truck like that. i would never use a primary veh that is unreliable too. i couldnt image plowing and having a minor breakdown like a steering line blow that would put my truck out of commission. not to say new trucks dont break, just less likely.

and as far as mowers, to me its more important that they are new and reliable, more so than trucks. they are my bread money. nickel and dime repairs dont kill, the down time does. trying to do 80+ lawns with other landscape work is hard enough without downtime.

that brings me to my next point, i do use that to justify my prices if anyone asks. i tell them clearly im not some random guy doing this on the side without insurance using old machine that will break down and leave you stranded. this is my career and provides for my family. i use new equipt and im reliable, so if my prices are a bit higher, you get what you pay for.

Az Gardener
03-06-2007, 12:10 PM
Hey Daricek no yelling here.

The lady that told me she didn't care if we were naked and on bicycles was in a home worth well over 5 million. Only 5 of my clients live in homes that are worth less than a mil but not by much, so I understand where you are coming from. You have to have presentable equipment no argument there.

I think you made a good decision about buying a used truck I think you just had a combination of bad luck and not enough research. I poured over this site reading posts about diesels as I knew nothing about them. What I came up with was...

Fords were fast and expensive to maintain and repair they are also the most popular.

Dodges had a stretch of bad trannys but had fixed the problem and repairs and maintenance are cheap (Comparatively speaking) They get the best gas mileage and towed the best. They also had poor resale value and were the least popular.

Chevy's were hit or miss very good or very bad.

So although I thought I would never own a Dodge, but I bought an 04 3/4 ton with 17-K miles and paid 24-K out the door with a 5% interest rate. It has the Laramie package and it is a crew cab so its not stripped down either. If I could a found a stripped down model and saved 3-K I would have. The resale value will not be an an issue by the time we are done with it. Maybe I got lucky.

There are two schools of thought for me.

Buy new gassers drive them for 4-5 years and replace them.

Buy diesel used have them for 7 or more years.

Either way the initial cost is about the same. Truck will cost 20-25-K I can buy brand new Ford gas trucks 3/4 ton crew cab for the cost of my used diesel. But I am banking on the Diesel giving me more miles.

BTW what is rust? never seen that on a vehicle. :laugh:

supercuts
03-06-2007, 12:40 PM
i had actually meant, its clear i should have bought the new truck. $6000 in repairs doesnt seem like all that much. i dont think i got a lemon, just typical repairs for a truck with nearly 130k miles. my 93' got over $3000 in repairs just in the last 6 months. for the 00' ball joints, $1200, brakes arent cheap anymore, a few leaks etc, glow plug power supply, adds up realy quick. even $750 for tires. you dont need new tires or breaks on a new truck. you do have to figure that in. granted you will need some down the road, but i wouldnt be buying my 2nd set if had bought new. the point was, although it seemed much cheaper at the time, in the end i ended up paying out as much if not more. and $20k was extremely cheap then, let alone now. why pay $25K + interest for a 2 year old truck with 60K miles when you can get a new one for $31K 0% interest. used prices for late models are crazy.

as far as the research, ive done it. they all break about the same, just different areas. wait for that dodge to start having sensor problems. they add up quick too. for me, i wanted the truck that WORKED the best. by that i mean does the job right and feels strong. to me fords just do more, plows better, more power(for the year), etc.

TSG
03-06-2007, 09:16 PM
It isnt how much , it is how much you keep.
It is also buisness knowledge.
If you can borrow 16,000 for equipment at 0% for 2 yrs
and get back 11,000 in taxes (schedule 179?), then pay off the new equipment with very little income,,,sounds good to me.
Many here need to start thinking like buisness men/women.
Cash Flow,,,,,,,
Just .02
Alan

ALarsh
03-07-2007, 12:50 AM
It isnt how much , it is how much you keep.
It is also buisness knowledge.
If you can borrow 16,000 for equipment at 0% for 2 yrs
and get back 11,000 in taxes (schedule 179?), then pay off the new equipment with very little income,,,sounds good to me.
Many here need to start thinking like buisness men/women.
Cash Flow,,,,,,,
Just .02
Alan

Please explain how you get 11,000 back in taxes.

TSG
03-07-2007, 08:11 AM
Start up cost..........
Purchasing of 80% of equipment.
Put it into service before you start getting income.
It offsets your ordinary income,
Get a CPA
Alan

supercuts
03-07-2007, 08:36 AM
he has a good point about the right off too, if your not new and cant do the 179 he spoke about, you do get about 1/3 write off value. so, you 16k is only costing you about $10,500 out of pocket. why give it to the government when you get new reliable professional equip.

RedWingsDet
03-25-2007, 04:37 AM
There are so many different variables to this thread.

For starting up, it would be just plain stupid to go out and buy a 50k work truck with no accounts. But if your established for 10 years, maybe, but why not just get a NEW 3/4ton work truck for 23k? and buy yourself a 3 year old bmw as an estimating vechicle, lol doesnt make since. I dont need power windows, locks, etc for cutting grass. And anyone that cant roll their window down by hand shouldnt be in this business. However, my trucks are not older than 7 years but they are work trucks only and plan to be in rotation for a new truck every 10 years. I also have a personal vechicle, so again, too many variables when it comes down to Work truck vs. "p*ss* magnet truck since i like to go pick chicks up with a smelly truck but I think its cool truck, lol" and whatnot..

cutbetterthanyou
03-25-2007, 11:36 AM
Iv'e tried new, they are fine when under warritty but afterward it sucks. In my opinion after warrity trade it in on anotheir or buy somthing older you can work on cheaper.Last year I spent over 5000 in my p stroke. $5000 % by 12 months is 416 a month. I bought my new truck w/ 6years finance and 6 years warritty for 650 a month 0 down (anotheir reson why i didn't trade in p stroke to long to explain) p stroke valued at 16, new truck 48 leaving defrance of 32. If i financed 32 payments would be 444. so it really cost me 28 dolars a month to ride in somtime brand new consider the 6000 in repars every year. Plus the headache of a truck being broke down. My new one I get a rental. This same senerio happened on my mowers.I didn't buy new with them because of expaning. I couldn't afford 2 new ones but if I just replaced one it would have been new also

mountianview
03-25-2007, 12:12 PM
1993 s-10 $700, standard runs great two years just oil gas. borrowed trailer just starting this yr.grant for $10,300 new ferris is 1500z,48/21hp br600 blower,insurance,trailer hitch to frame,new quick 36,2000 door hangers,just got my first client multi millionare gave mill to local college.will see how that works out.wife works, own our home .ps no low balling,before I got educated on this site I was starting with a husky homeowners tractor,need I say more ?

Duekster
03-25-2007, 01:12 PM
Start up cost..........
Purchasing of 80% of equipment.
Put it into service before you start getting income.
It offsets your ordinary income,
Get a CPA
Alan

But you still have to pay for it.

I look at new EQ as a write off as well, I expect longer service life out of it and I basically. I think buying used is a bad idea for anything but for equipment that will be idle a lot and as such can be serviced often without causing down time. However, I often rent that type of equipment.

The equipment can be operated several years.

Take said 36 in WB.
I add inflation ( cost ot replace )
Finiance Charges even I self fund it.
I add about $500 for maintenance cost.
I add insurance and any taxes on the equipment.

I break this down by 2080 to give me an hourly cost
The I add the gas cost per hour.

Now some people take it further and track GTO and Repair cost separately.

None the less you should have of say $2.00

I do the whole thing for my mowing rig. Blowers, Chain saws and stuff I pretty much look that them as two season. Mowers 3 years, truck 5 years.

I got lazy I figured I would be safe with a equipment charge of $20.00 per hour.

Now, I have my labor. Lets say the average wage for 3 guys is 12.00 per hour ( I know this is higher than most people pay in my area.)

So I have $36.00 hr and I add 20% for over time so I am at 44. I always round up. I have my labor burden at about .45 so now I am at 64.00 per hour plus the EQ is now 84.00 Now I have to add my OH. Of 40% which gets me to 120.00 hour.

This is 40.00 per man hour and I use two or three man crews so the EQ is covered. I still bid some stuff at 35.00 hour because they are not using my mowers.

Bidding small jobs you easly bid at $35.00 hour but add some extra time in the estimate thus actually get more per hour. You have to allow for travel time, pee breaks, equipment break downs so I alway either tell the customer, here is how I am bidding this and I am going to over estimate the time a little. If you like we can just go time and material. Most of the time they take my high bid.

As far as Residential Mow and blow operations go. I mow to fill up small spots of time in the week and to upsell other services. There is no way I can get my full labor rate out of those jobs but I can be close.