winter borrowing blues

[lawnworker]

hello all <p>just wondering if anyone has had to borrow money in the wintor just to pay bills I know i need to increase my work load and save more for winter . it ssems each year i need to borrow 1000 are more just to pay bills this really sucks. what do you all do for winter income are do u just make enough in season to cover the slow times.<p>let me know thanks the lawn worker

[Lazer]

We plow snow. We make more money in the winter than the summer. Perhaps we'll need to borrow $ this summer. :-)

[HOMER]

Hi, I would suggest beginning this spring, converting old customers and starting all new customers on an annual payment plan. Get away from per cut income. You need money 12 months a year so impress this upon your customers. Just average out over a 12 month period what you have been charging and learn to budget as best you can. <p>I don't know about Va. and the amount of snow you get but if I hadn't established at least 1/2 of my accounts this way I would have to borrow also.<p>Homer

[Lazer]

Homer, I guess if I could read, I could've seen he was from VA.<br>

[HOMER]

I really don't know what kind of winter they have in Va. If it is fairly mild there he might convince his old and new alike to go year round maybe on a 28 cut schedule. I put all mine on a 30-33 mowing schedule and average out the per cut price into 12 payments. Last winter was pretty tough on us too, so I know where he's coming from!<br>Last spring as I began picking up new customers I convinced them to go yearly and gave them a monthly price. At the end of the 1st month of service I begin invoicing them and continue right on through the winter. I get the same amount from them if I cut them 3 times or 1 time like this month. I have picked up several customers this fall and winter and done them the same way so next winter should be easier again than this one. We don't have any snow to plow so we have to be creative.<p>Homer

[thelawnguy]

I do lawns in the summer and snow in the winter, when theres snow everythings fine, but the last two winters with no snow I have had to draw down my savings, kinda sucks to work all summer just to spend it all winter, but this year we've had a couple storms and I also switched my commercials to seasonal so that so far things are ok, actually I had leftovers so I had a new electric service put in the house and a large siver maple removed, ordinarily Id have to wait for spring to do those things.<p>Also got a call from the executor of the estate of one of my past customers, evidently I have a windfall coming. She had no family, left her estate to myself, the housekeeper and the mailman who used to help her out from time to time. Guess it finally paid out, putting up with her nitpicking for the past six years. So I must say, guess some of those senior citizen accounts can be good for something after all.<p>Bill

[Charles]

Thats why we stress so much on pricing on this forum. This is a seasonal business and more so for those who don't get much snow. You have to charge enough to get you through the winter and enough to invest in your retirement and health insurance. Too there will be those years when you have to buy new and replace old equipment. We have to make a years income in 8 months period of time. And the weather may even shorten that. Time is so valuable in the peak periods you need to have a minimum before you drive and unload your equipment.

[TotalCareSolutions]

This years been good, but winter still hurts.

[Evan528]

Money should have been put aside all summer to get you through the winter time. I will be living off of savings untill May (thats when Aprils payments will start coming in). I would rather have my earned money in my own bank account then charge over 12 months and let my clients keep my money in there bank account.

[mtdman]

Budget budget budget. And save. If you're not making enough to get yourself through the winter, you need to raise rates, get more profitable, etc. I do snow, but I hate it, and only do what I have to in order to keep those that want removal happy. I'd much rather work my butt off all summer and have enough to get me through the winter without doing a lot of snow.

:D

[bobbygedd]

i always had another job, but, i'll tell u what i do besides. some of my clients are on a 10 month payment plan, first one due by 3/1. also, any just ferts, or just mow and ferts, have a pre paid fert bill due by march 15th. so, u send out the bills beginning of feb, and get some back quick, some not so quick. being home in the winter, with nothing to do, u tend to spend more money, by feb it can get tight, and my billing procedure is a life saver.

[quiet]

"I would rather have my earned money in my own bank account then charge over 12 months and let my clients keep my money in there bank account."


To each his own. But to me it's awful nice having the same income in January as July.

[Sean Adams]

40 billable hours in one week
30 weeks in a season (for example)
1200 billable hours
52 weeks less 30 weeks = 22 weeks left
no snow or no winter work
30 weeks of revenue needs to cover a lot

[kootoomootoo]

I found a great job using my 1 ton truck to deliver freight.
Doesnt pay great but $500 a week at least keeps me afloat until the spring. Now I also know I have a job next winter.

[hole in one lco]

I send out my fert program for the year in February. So snow or not its not to bad.


Also call your news paper. They pay 500.0 to deliver to quickie marts store

[proenterprises]

make out a savings plan for the upcoming season. make a certain dolar amount that you set aside each week from cutting. put that amount in the back and it can be your "winter" fund. now, when you have winter bills to pay-instead of borrowing just to pay back later-you can draw from that and make your payments honestly.

as far as the current situation-paper routes, oil truck drivers, snow, maint. on props.

[olderthandirt]

Originally posted by quiet
"I would rather have my earned money in my own bank account then charge over 12 months and let my clients keep my money in there bank account."


To each his own. But to me it's awful nice having the same income in January as July.

You can, its called a budget and unless its your first yr. its pretty easy to budget for the winter months IE make $12k profit in summer that leaves you with $1000 month budget.


Mac

[J&R]

I started back in 1982 full time. The first 2 years in the off months i took a job with a temp service to help.

[fga]

I just send out my last bills really late like late december to now. Anything before christmas I'd wind up spending on CRAP! The way I work it, I have checks coming in all winter. It's not alot of money at once, but it is an income. On top of snow, and little odds and ends landscape stuff, I usaully make it through.
It depends on your bills though. I try to keep a very low overhead all year, and my rent is cheap, and best of all my insurance plan for my trucks and car are the free months over the winter! I pay 7 months out of the year. You have to work out a system that fits yourself. First obvious thing is don't splurge this time of the year.

[chefdrp]

to me whats it matter if you spread the money 12 months. You still only have x amount of money made. Please help me understand how say 20,000 made in the summer is more when its spread out.

[Doc Pete]

FWIW,
Years ago I started putting away winter money for December/ March, during the season. If I had snow and made extra, it was fun money, otherwise my winter money carried me at a bare minimum.
DP

[Avery]

Our maintenance accounts are on 12 month contracts. Winter is the busy season for installs. If I had to pick a part of the year when we run lean it would be spring. We put out lots of labor on the maintenance accounts towards spring clean up/mulching and the installs slow down a little.

[Kelly's Landscaping]

I don’t think the budget has as much to do with profits as it does your fixed expenses. Truck insurance on 3 trucks yellow pages, pay roll services and a ton of other things I never would of thought of before I started seem to eat close to 2k each and every month no matter what. This winter being my first year sucks. I knew it was going to and I also know I wont start work till March. I plan on doing a billing by the 15th of that month I normally only bill once per month but I do know how tight that’s gona be. I will be borrowing but not to survive so much as expand I have next years goals and I wont be missing out on income because I didn’t have what I needed to do the jobs. Next year ill have a much bigger war chest going in to winter. As for snow work god I forgot how much I hate that. Think ill live up to my obligations this year and plow. Next year I have no plans to plow residential and commercial EVER again. The only plowing I will do after that will be 2 seasons from now when I have 6500 series trucks I would like to do town contracts for roads and get paid by the hour instead. I have a friend that does that with 3 trucks and makes 135 and hour per truck. That is temping since I could give my men some work and not be concerned about what they took out on my customer’s lawns.

[fga]

chefdrp,
That's why I say it depends on your living costs/exspenses. If a person budgets $20,000 over 12 months, and that covers those costs, then it can be made to live on 12 months out of the year. If not spent wisely, anyone can blow any amount of money in an hour! If what you make for the season doesn't cover those living costs, then you've got a problem. But 20,000 dollars can be more when spent knowing that winters sux!

[David Haggerty]

I forced myself (and my wife) to use an annual budget instead of a monthly or even weekly budget.
We used to save up cash for the winter. Now that we're better at budgeting, we just borrow. We just expect a sag in the winter income, and consider it as a part of doing business.

That saves me from sitting around and worrying about what is a basic element of the business. Kind of like the way taxes are just a part of doing business.

That way I can concentrate on something more productive. Last winter we bought a new car. It took about a week. I can't spare that kind of time in the summer.
It sure felt strange, taking on debt at a time when we had no income. But the budget figures were good, and we needed the car.

Worrying about something that won't change is a waste of time. And it might cause me do do something desperate. Like take a job in the winter that pays less than what I'd pay a helper in the summer.

Probably what a lot of people think is a problem with cash flow in the winter months is really a problem with too little yearly income.

Dave

[mtdman]

Originally posted by David Haggerty

Probably what a lot of people think is a problem with cash flow in the winter months is really a problem with too little yearly income.

Bingo. You've got to be able to work enough during the season to put yourself through the winter and earn enough for the whole year. Keep in mind that debt and obligations you take on in the summer might be easy to meet while the money is rolling in, but in the winter it might be another story. You need to know how much money you'll need to meet expenses for the entire year, and then set out to make that during the season.

[PLI1]

I pretty much hibernate during the winter months and live off what we made during the growing season. We do some plowing, but not much. If I want to get away for a week or two, I can since I have a freind that covers for me. My biggest problem is boredom!!!! I'm thinking of picking up handyman work and or painting just for something to do. My wife finds plenty of honey-do projects, but I go nuts hanging around the house all day.

[the scaper]

january and feb are really my only slow months. in the past i just worked part time at my old job but this year i'm on my own so i just estimated my bills for the winter and set aside that amount+. i also have a personal credit acct with a zero balance just in case but i dont see having to touch that. i'm still doing some maintenance stuff for my customers but i'm almost all residential so thats pretty slow right now, almost not worth messing with but i call it busy work. also some job requests that i got during the summer and didnt have time for i told the customers to catch me in the off season. one of them just let me know shes ready for her new screen porch so i'll probably be starting that this week. in all, i'm enjoying the semi- hibernation and glad to be in the landscape business!

[DFW Area Landscaper]

I'm set up as an LLC taxed as a corporation. My business money and my personal money are two totally separate gigs. I haven't gotten to the point of needing to draw a salary yet, as I've still got another $27K to pay out as loans payable to shareholder. But as soon as that's depleted, I plan to draw a flat rate salary from the LLC once a month. Even though my business cash flow will be tremendous 8 months out of the year, it won't effect my personal checking account. Each May or so, I'll declare any extra monies in the LLC checking account as dividends and avoid some SS taxes. I just hope I can get my business to the point where I can make my desired salary 12 months a year.

All in all, it comes down to one thing: You've got to be able to live within your means. Most of my customers struggle with this and that's why they're paying late or not at all. I think most americans in general struggle with this. Even our government can't live within it's means.

++++Probably what a lot of people think is a problem with cash flow in the winter months is really a problem with too little yearly income.++++

I'm beginning to get the feeling there just isn't any money in this business. I'll give it another full year, but I wish I had stumbled onto this sight before I decided to jump into the business.

Later,
DFW Area Landscaper

[the scaper]

dfw, you hit the nail on the head about living within ones means. i would think it doesnt matter what wrung of the financial ladder one is on, you either live in accordance to your income or you over extend yourself. if one over extends his abilities, trouble is sure to come. just as important as how much one makes, is what he does with it when he gets it.

[David Haggerty]

Originally posted by the scaper
i would think it doesnt matter what wrung of the financial ladder one is on,


I've been at that level on the "financial ladder!"


wring ( P ) Pronunciation Key (rng)
v. wrung, (rng) wring·ing, wrings
v. tr.
To twist, squeeze, or compress, especially so as to extract liquid. Often used with out.
To extract (liquid) by twisting or compressing. Often used with out.
To wrench or twist forcibly or painfully: wring the neck of a chicken.
To clasp and twist or squeeze (one's hands), as in distress.
To clasp firmly and shake (another's hand), as in congratulation.
To cause distress to; affect with painful emotion: a tale that wrings the heart.
To obtain or extract by applying force or pressure: wrung the truth out of the recalcitrant witness.

v. intr.
To writhe or squirm, as in pain.

n.
The act or an instance of wringing; a squeeze or twist.



You just have to climb up a couple of rungs for a lot of that to go away:D



But seriously, I just think too many people thinks a thousand bucks a week or so is a lot of money. Namely, the newcomers and some of the people I work for!
It's like they think we can hibernate in the winter!

I work hard, saturday's, sundays' holidays, my birthday, rainy days and all to earn a living in 6 or 7 months time. It ain't so easy. And the financial problems ain't just from not living within my means or from some failure to plan!

I've been doing this for around 30 years with some measure of success. (I'm still doing it.)
So if it's a problem for me, it's got to be killing some of the newer guys. And it's not somehow OUR own fault!

Dave

[J&R]

I believe his thread was to point out that income in the grass cutting months is not supporting him all year. Just has myself the first 2 years in this work. What i said and stand behine to this day is. Get a winter job with a temp service untill he has accounts that will pay to live year round.

[JVS]

Stay AWAY FROM PAY AS U GO - Then budget for 12 months- Go to Compass.

[the scaper]

Originally posted by David Haggerty
I've been at that level on the "financial ladder!"












But seriously, I just think too many people thinks a thousand bucks a week or so is a lot of money.


Dave LOL! me thinks you should drop the s from thinks in that statement! looks like you're not on the top RUNG either! :p

[TotalCareSolutions]

Originally posted by David Haggerty
And the financial problems ain't just from not living within my means or from some failure to plan!

So if it's a problem for me, it's got to be killing some of the newer guys. And it's not somehow OUR own fault!

Dave


Dave,

In your opinion who's fault is it?

[David Haggerty]

Originally posted by the scaper
looks like you're not on the top RUNG either! :p

You've got that right! I'm just making a living, but I am earning a living. Just not gettin rich.
But I do earn what I get. I don't run crews of laborers.

TotalCareSolutions;
I'm not sure what the problem is, but I think it lies in the vicinity of people not charging what they're worth. Not charging what it takes to be able to come back and do it again next year. They look at a grand a week like it's plenty of money, then complain about "cash flow" in the winter!
Hey! at last count, there were 52 weeks in the year, not 26! If you don't charge accordingly, your budget's heading for a train wreck.

If customers won't hire you, make yourself more valuable. Increase your efficiency. Improve your quality. Make yourself indispensable with needed additional services. BUT DON'T LOWER YOUR PRICE. It's too low for people to make a living already!

I think a big problem is too many people look at lawncare as easy money. And it ain't!

The last thread I posted in was about bidding a 20 acre lawn. One guy said he'd get a 72" ZTR, mow it in a day and charge $480. A real plan for disaster! But I don't think he was speaking from experience. But it's just the type of talk people in the purchasing departments like to hear. They're more than happy to let someone ruin themselves financially by mowing their lawn at a loss.
Then they'll threaten to sue you if you do a poor job!

Been there-done that. I won't fall into that trap again, but there seems an endless supply of new guys.

Dave

[TotalCareSolutions]

good points

[TURF DOCTOR]

Try power washing you can't make it on 1 thing snow is not a steady income but it pays a little.

[Tommy D]

Can you get a refinance on your house? Also I know a lot of people in lawn care want to get paid per cut, but with my senior customers it helps them to break their bill into 12 monthly payments I also have a lot of my customers who are not seniors that pay over 12 months. I also give them the option of putting their spring and fall clean-ups as well as their fert programs into this budget billing program. If you try this next season, you will find by offering this option to your clientele your total sales will increase. Another thig you might consider is to get into some landscape work that you could schedule before and after the mowing season. I wish you well and hope everything works out for you.