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Nelson
12-29-2001, 09:35 PM
I was wondering if someone can tell me the amount of revunue a year someone doing it solo may be? My full time job is still in Limbo, and maybe this will help me out some. If it's a touchy
question, I will understand, but if it's not a touchy question then
I will appreciate the answer. I have been hesitant to ask this question, but I was just wanting input on the amount of money someone can make in a fiscal year doing it solo? That way "when"& "if"my full time job does decide to close down then I will have a idea what can be made owning your own LCO !!!!

Thanks.............................

LAWNGODFATHER
12-29-2001, 09:48 PM
Down there in FLA, you probably cut at least 40 full weeks, including the EOW time of year.

So figure about $35 to $40 per an hour for 40 hours.

$35 X 40hours X 40 weeks = $56,000

$40 X 40hours X 40 weeks = $64,000

All are guestamates and gross.

KDJ
12-29-2001, 10:08 PM
I'am in Florida and have posted numbers before. The reply I received was my numbers were "slanted"

Do the search and use your own judgement.

I only know how Florida is. But there are a few that live many
miles from the state of Florida that will know much more.

Good Luck

awm
12-29-2001, 10:09 PM
solo ,it all depends on you . your output ability. in my opinion a solo is better off producing quality,rather than quantity.
if u are gutty enough to try an sell ice to an eskimo,it would help.
id rather have 30 accts that were top dollar,than 55 that are
trim mow and go. ive got both but i know which ones i am
more into.later now

HOMER
12-30-2001, 07:30 AM
What are you making at your current job? Answer this and I'll tell you if you can make more.

Mowin4cash
12-30-2001, 10:10 AM
If you start with first class equipment, like a Dixie Chopper, a "real" weedeater and blower, a truck and trailer you can depend on, and a decent software package like Quickbooks, don't forget a CPA, and you are willing to work 14 hrs a day, 7 days a week, and have great customers at great prices, a one man operation can easily make $100,000.00 a year.
But in reality, if your family is important to you, as well as some time so relax and enjoy life, as well as have time to devote to God, you better settle for much less. I think 5 days a week, 10 hrs a day geting you $60,000.00 is more like it. If you can't make it on that, I don't know what to tell you!
Anyway, that's my 2 cents worth.

Nelson
12-30-2001, 03:48 PM
Originally posted by HOMER
What are you making at your current job? Answer this and I'll tell you if you can make more.


Homer I make 37,500 a year know @ my job.

MATTHEW
12-30-2001, 07:06 PM
Remember if you want to maintain $37,500, you may need to produce $50,000 to $80,000 depending on your expenses. Then you have to figure in the extra taxes and paying for your own health insurance.
Is the job really that bad at $37,500???

XOFMOT
12-30-2001, 09:40 PM
NELSON, I'm in the same boat as you. I work at a "FULL TIME" job and make 36k a year. the job is very easy, the people are "OK" but the mental aspect of WORKING FOR THE MAN drives me nuts!! Summer of 2001 I started a lawn mowing business, I lost aprox. $6000.00. This is due to start up equipment and other business expences. My very aggressive plan for the 2002 season sees me in the green and leaving my JOB by APRIL 2002! But, not as a SOLO. This business, from what I understand of it so far, yeilds a 40% profit after expences. So in order to make THE SAME $$$ as the JOB I would (by my self) have to gross $51K in sales or translated to my area of business I would have to mow 55 lawns a week based on $35.00 per cut for an averge of 26 weeks a year. Well, you see, I'm married and want to stay that way! I also have a 7 and a 5 year old, I want to see them as well! SOLO may NOT be the way to generate the same income that we may be making at the JOB.

steveair
12-30-2001, 09:55 PM
one thing not mentioned yet, though I'm sure on the minds of most:

If you are going to start a solo operation, then get ready for a disappointment the first year.

Unless you are very lucky, the chances that you are going to be at 'full' tilt your first year are very unlikely.

What I mean is you are not going to start experiencing a substantial increase from you previous job for maybe 2, 3, even 4 or 5 years. In all liklihood, you will probably experience a drastic decrease in income the first year or two, and then start breaking even after that, and then start seeing some money the years to follow.

If you are on a 'fixed' amount of living expenses already, IE. family, kids, mortage, etc., then going full time is very risky.

You don't have the flexibilty to 'cut' expenses on the personal side to offset any losses on the business side. In other words, if you don't make X dollars a year, your kids won't eat! For some guys, if they lose some money, maybe they don't eat out as much, don't go on a vacation, where those jeans with the 'holes' in them a few more months, or even duck tape there boots together untill they can afford a new pair.........from what I know, wifes don't like having their shoes duck taped!

The cost of going solo are the same as starting any other kind of business, whether its 2-100 employees. It's unbelievable how many bill's come out of nowhere.

If you are going to start a 'legal' operation, you have to mow a lot of lawns to pull in that 37,500.

steve

Nelson
12-30-2001, 10:03 PM
Originally posted by MATTHEW
Remember if you want to maintain $37,500, you may need to produce $50,000 to $80,000 depending on your expenses. Then you have to figure in the extra taxes and paying for your own health insurance.
Is the job really that bad at $37,500???

I guess the best thing for me is to stay full time & do lawn Service @ the same time, because I do have a 10 year old Son. I guess I was just wanting some input. I have been @ my job since I graduated from High School. I was always told that working for the other man will get you NOWHERE!!!!!!!

When you start making to much money you are just a number.
I just have a few accounts know, No where near making 50,000 to 80,000. Like I said before my job is in Limbo? Undecided to keep doors open or not?

I did not know it would take that kind of money in Lawn Service just to justify the money I am now making @ my full time job.

Thanks for the Input !!!!!!!!!!!!!!!!!

steveair
12-30-2001, 10:07 PM
The best thing to say is this.

Going out on your own is a big gamble....with some hard work, a lot of time, and a focussed mind, you can make it.

However, no matter what you think, hard times are bound to follow, and the question is whether or not you and your family want to make that sacrifice.

That's why I'm single still!

steve

Fantasy Lawns
12-30-2001, 10:25 PM
hummmm..... well a decent sole with a 36" set up .... should be able to maintain +60 "basic resi" weekly .... $60-65-70 for mow n go monthly ...(basic .25 acre size ..... +.5 is more) ....lot of the solos' run out of home with very little overhead

summer that should be about 45-55 hrs weekly n in winter after time should get that to about 35-45 every other week or 1/2 weekly to spread it out ..... this all depend on the route size ... we only work in a 10 mile from base ... if you spread your self to thin ....forget about charging for drive time when the rains come n you have to go back 20 miles next day to get 1-2 missed .....

it will take time to build the base .....but +50k gross doesn't seem un-touchable

get a 60" deck n you'll save 20-30% time ..... time for more work ....time for larger jobs .....add in "extras" which should be good for atleast +15-20 % on top ...depending on client base

all in all ..... should be able to make +35k net ..... maybe not the 1st year ....

really it's all up to you .... the market is hungry for quality professional service ..... all these numbers mean nothing without confidence to perform n take a risk

if you live here ..... than you know it cost less to live here :->

walker-talker
12-30-2001, 10:55 PM
In the same boat here. I make 40k gross yearly now. Started to mow in the year 2000. I am using this time now until april of 2003 to build client base, get applicators lincense, take a couple of horticulture clasess (at my present jobs expense), pay off my present equipment, pay some bills and have small nest egg. I am planning on getting a job over the winter months (probably for at least a couple of seasons anyway) until I get my feet on the ground. One thing I do have going for me is that I have no girl (at this moment) and no kids (that I know of...lol). I still need to do a little math and put it to paper, but I feel confident. Just my situation.

MATT

Mark
12-30-2001, 11:11 PM
After several yrs in the business 65K can be made every year. Its that 20K payback to Uncle Sam that knocks you down to 45K then after expenses,which fluctutate,there you are with a net somewhere around 38k, And no vacations untill late Jan and 55-65hrs per week, It pays the bills but when you get back to the shop,well atleast for me im one tired man. I do like working for myself,i worked for Sunoco Oil Co in management for 19yrs and my division liquidated, thats why ive been doing this now for 12yrs. I do miss the perks and partys, i work more hrs now and make alot less net, I think doing this partime and keeping your other job is the way id go,atleast for now. Marks Mowing Service

walker-talker
12-30-2001, 11:26 PM
Mark,

You say 65K gross, is that just from mowing or do you offer any add-ons, spraying, dethatch, aerate etc..... Also, 38K is not a bad NET. When I say I gross 40K, I will only NET 26K (approx). So to NET 38K is quite an improvement in my situation. I am sure that the other post that said what their yearly income was a gross figure. Just a couple cents worth. This is an interesting and educating thread, thanks to all those that gave their input.

MATT

HOMER
12-31-2001, 07:06 AM
Nelson,

Just about everybody on here had to leave something to get to the point they are now.............it ain't impossible. It is hard work and people aren't going to give you anything, it must be taken in one form or another. I'm not advocating you go out and steal accounts but..................there are some decent bids that go out each year that would pay what your making now! There can be a lot of money in this business and then there can be little. If you have the drive, the talent, the personality to sell water to a drowning man then you can make it. I left my job making $35,000.00 a year...........had it made too.................just wasn't how I wanted to live out my days.

I've been doing this since '96..............went full time in '98. Never looked back. There have been some hard times but I brought them on myself. I've ben blessed with work that I can't even explain how I got. It's tough.......there's a lot of leg work involved in getting enough accounts to keep you busy. I also live in the south where we can easily get 12 month agreements. I don't know about ya'll. If you could hook up with someone that has been in the biz for a while they would feed you work that they can't take on............I know I've done that for a couple of guys.


You might be forced out of your job.............I quit a good one. I would definately continue to pursue this as a side job, just like I did, until you reach a point where a decision has to be made. You'll get there by having a lot of faith, a good bit of luck, and most importantly a very positive attitude.

Read this next line very carefully....................OK.

Before doing anything you MUST HAVE 100% SUPPORT FROM YOUR FAMILY.........WITHOUT THIS THERE ISN'T MUCH HOPE FOR YOU. If that support system is in place then proceed to the next step.

When you see others out there doing this full time...........just like I used to...........believe me, they have suffered somewhere, somehow.............it just beez that way.

Get all your ducks in a row and then be prepared to at least give it a try if your job leaves you high and dry.

Nothing ventured-nothing gained.

XOFMOT
12-31-2001, 07:18 AM
Well said HOMER!

SJR Lawncare
12-31-2001, 09:38 AM
To some, it is a "touchy question", but not to me. If what I say will help you to be happy & make a decent & honest living for you & your family, I'd be happy to offer my experience.

After purchasing a dependable walkbehind mower, trimmer, blower, trailer, various essential hand tools, & financing a pickup truck, I started full time on my own in the spring of 2000.

Previously, I worked as a 2nd hand man to the owner of a large lawn & landscape co. I worked my way up for 6 years. So I learned alot, ie., how to mow, trim, edge, blow, leaf removal, snow removal, clean-up beds, edge & mulch, trimming,
planting...etc.

Most importantly, IMHO, I learned how to target customers, submit a PROFESSIONAL proposal, get the customer on a PROFESSIONAL contract, & retain the customer with quality, fair priced care. My first year I made enough to purchase more Commercial equipment, grossed about $40,000, & still learned alot.

This year I worked smarter, & grossed over $75,000 Solo. I also was able to purchase more equipment, buy 2 trucks, (one stakebody dump, paid cash), the other a 99 f-250 4x4 pickup (financed), & save over $20,000 in the bank. It has been alot of work, alot of worry, alot of hours, but it is possible to "make it ".

I try to thank God every day for the work & health I have, because, believe it or not he is behind it all.

Dont fool yourself, It is alot of work & worry. I say, get experience part time or even work for another Co. for a while. Make sure you can & want to do it before you devote alot of time & money & get yourself into debt...& PRAY ALOT.

Good luck & Please E-mail me if you have any questions

SJR

Mark
12-31-2001, 01:27 PM
Matt this includes mowing,edging,trimming,pruning,weed control in bed areas,trash removal,blowing the areas needed,mulching,Turf fertilization, shrubs, and annual color, spring cleanups and fall and leaf work plus other things my clients want done. Marks Mowing Service

Nelson
12-31-2001, 04:00 PM
Thanks Homer, that was well said. Also I want to thank everybody that posted. All Info has been alot of help.:)

bobbygedd
01-01-2002, 08:34 PM
i think im maybe missing something here. the numbers u guys are putting up seem very simple to achieve, but maybe the difference is the part of the country i live in, and u live in. my thinking is, for example: if u can pick up only 50 lawns, u should be able to do 10 a day without breaking a sweat, right? so, starting at 8 am, and finishing at 2 pm, is only a 6 hr workday. at an average of $30 per lawn, u gross $300 a day, or $1500 a week, not even killing yourself. if the average service period is 9 months, thats a gross of $54,000 a season for cutting only! add additional for oct/nov/dec when u r picking up leaves instead of cutting grass, and it has to come up to around a gross of $60, 000. and like i said that is just doing 10 lawns a day, 5 days a week. what could your overhead possibly be? since u r solo, lets go way overboard and say your overhead is $12, 000. that leaves u a net of around $48, 000 for a nine month work season. add extras like planting, fert, trimming, mulch etc, and it would seem real easy to leave that $36, 000 a year job. i dont get it

awm
01-01-2002, 08:56 PM
bobby u forgot taxes. id bet tax trouble has killed more small buisinesses than any other one thing. i know several carpenters and what not that have fallen to that axe. when the govt
got thru . all they had was the knowledge of there particular trade. a good accountant is a necessity imhu
later now

bobbygedd
01-01-2002, 09:05 PM
but of course, we must all pay taxes. he also had to pay taxes on that $35, 000 a year income.

fivestarlawnken
01-01-2002, 10:54 PM
NOT ENOUGH.. But working towards a better 2002.:rolleyes:

earthandturf
01-02-2002, 11:03 AM
I agree with SJR, learn as much as you can and work smarter not harder. This was my first year and I grossed 46k. My projections for 2002 are 60k+. 80% of income is mowing and fertilizing. All my work is within 10 min. of home. I'm always thinking of ways to make more with good marketing and planning.:blob3:

Mark
01-02-2002, 11:40 AM
Bobby 60k will net you around 32k after taxes and overhead if your a legit Business. Marks Mowing Service

bobbygedd
01-02-2002, 01:30 PM
mark, dont know how u came up with that, but my numbers are closer to around 40, 000. u pay less taxes if u have more dependants, and so on. but, still beats the hell out of working for 36, 000, dont forget, u still need to tax the $36, 000 too.

Barkleymut
01-02-2002, 02:14 PM
In 98 I started in June and netted right around zero after everything. In 99 I netted around 18K. In 2000 I netted about 45K and in 2001 about 52K. The first 2 years I bought the best equipment and learned a ton. Now I try to keep everything running just right and go after the most profitable accounts. I started in this business knowing very little and with almost no experience. I quit a crappy job at a bank making about 25K. I work about twice the hours I did at the bank during the spring summer and fall but I do very little except equipment maintenance in the winter. So you have to figure I missed out on almost 25K my first year and about 7K my second year. If you go for it just give it everything you have and always always always project a top notch look towards all customers and all potential customers (basically everyone).
By the way I would estimate that 55-60% of my gross is from mowing, 20% aeration and fertilizing, 15% plant installs and landscaping. 5% other misc. work.

Russ
01-03-2002, 08:57 AM
Gross and net are like apples and oranges. There are too many vairables in expences to perdict a net within 10% for US. 2001 we performed about 3,700 billable events and I'd be surprised if we net 15K. But thats the way we do business. Should you Quit a job and "go out on your own"? HOMER wrote probably the most important piece of advice I've ever read on this board, Not without 100% support from your entire family. Having said that remember---Ships in harbor are safe! But thats not what ships were make for.

walker-talker
01-03-2002, 09:28 AM
Russ,

$15,000 net, divided by 3,700 billable events = $4.05 net, per event. This is hard for me to understand.

MATT

Mark
01-03-2002, 10:23 AM
Matt i think he meant $40.54 per account. If not im with you. Marks Mowing Service

fshrdan
01-03-2002, 10:47 AM
I think it's interesting and educational to read about other companies and the rate at which they've grown and suceeded. Here's my situation:

I started in 2000, grossed 53K with one WB, pushmower, and 2-stroke tools. I made no profit, and didn't pay myself. All money went back into the company.

2001 is over and I grossed 104K. Profit was 18K, and that's after payroll. 17% profit is very respectable... I don't get these guys that are making 40% profits, they must not be taking out their own salaries.

I have better equipment now, 2 WB, a Walker, new truck, etc. My acct talked me into incorporating when I started, and I wish I wouldn't have. Maybe it'll pay off one day, but for a small company it's kindof a pain in the butt.

These are numbers with 2 people, myself and a key helper. My advice would be to find one good worker to help you. When you're billing $30-40 per man hour and paying help $8/hr, that's alot more money in your pocket.

Good luck, Daniel

Marquis Lawn
01-03-2002, 11:31 AM
Very good posts on a very important subject.

A moment on taxes though, because this seems to be the killer for most people. The main problem here is that people give up too much to the gov't. When you are working for someone else, your tax situation is very simple and your options are very limited, your deductions that is.

Small biz operators need to treat taxes like the rich do. Do you think all the millionaires out there pay tax on every $$ they "earn"? The answer is yes, but how much they earn is debateable.

Being self-employeed, you are free to right off a whole lot of stuff that you normally wouldn't. Your cell phone, computer, truck, some utilities, office, health ins., etc. These are basics for most of us that we would pay no matter who you work for, but with a small biz they come right off of the gross, thus lowering the amount you pay tax on.

Think about it this way... every $$ you spend on equipment or anything related to the biz is discounted about 33-50% depending on your tax bracket. Go ahead then, buy the best stuff out there because if you don't buy it, you'll pay tax on it.

I don't want to get anyone in tax trouble here, you definitely should consult an accountant, but I just want everyone to make sure they are not "giving money away".

I only net about 25% of revenue a year. This may sound horrible, but I have accumulated a ton of hard assets this way that otherwise would have gone to Ol' Uncle Sam. Botton line is I make just as much as I could for someone else, plus I get all kinds of new goodies each year. This morning I bought a new Ipaq handheld, beacause the biz "needed" one. I wouldn't have bought it had I been working for someone else.

Think about it....

stahls2
01-03-2002, 01:33 PM
Marqui Lawn,

I'm with you. My wife is an accontant for the State of Michigan and she has told me the same thing. Write off as much as you possibly can including, but not limited to; uniforms, mileage or repairs on vehicles (which ever is more), genreal repairs and upkeep on equipment. As a sole proprietorship (no partners), a business can actually loose money for three consecutive years before the government will consider the business a "hobby", therefore, no deductions allowed. If possible, it is best to have a zero profit for the previous year. (Profit - Expenses = Zero Profit). If a business is able to do this, it will not pay taxes, legally and honestly.

Consult your CPA before adopting these practices:

I am in the same boat as the first person. I currently have a career w/ excellent benefits and health insurance, grossing 36,500/yr and net 24,000. I would like to do this full time, however, it is difficult to leave a profession that I went to college for for four consequentive years. Maybe I will just use this to purchase alot of hard assets (TOYS).

bruces
01-03-2002, 03:16 PM
Originally posted by stahls2
Marqui Lawn,

I'm with you. My wife is an accontant for the State of Michigan and she has told me the same thing. Write off as much as you possibly can including, but not limited to; uniforms, mileage or repairs on vehicles (which ever is more), genreal repairs and upkeep on equipment. As a sole proprietorship (no partners), a business can actually loose money for three consecutive years before the government will consider the business a "hobby", therefore, no deductions allowed. If possible, it is best to have a zero profit for the previous year. (Profit - Expenses = Zero Profit). If a business is able to do this, it will not pay taxes, legally and honestly.

Consult your CPA before adopting these practices:

I am in the same boat as the first person. I currently have a career w/ excellent benefits and health insurance, grossing 36,500/yr and net 24,000. I would like to do this full time, however, it is difficult to leave a profession that I went to college for for four consequentive years. Maybe I will just use this to purchase alot of hard assets (TOYS).

Guys,

If a business shows no profit legitimately, then it is likely that the business really made no money. If that is the case, you're spending a lot of time for nothing. It is hard for me to imagine how anyone could operate as a "solo" operation and not have a profit in the maintenance business. The only things I can imagine that would create that would be the Section 179 depreciation write offs of equipment. Even that will only create the loss in the years you make equipment purchases.

Anyone that is losing money as a solo had better go flip burgers at McDonalds.

Showing a legitimate loss for tax purposes means that you probably are actually losing cash. If you don't mind doing that because you save taxes, you need to think again.

That $35 tax savings cost you $100 in cash. Oops, you have $65 less in cash than if you had just paid the taxes. Yes, I am all for saving taxes, but if I have a choice of making money and paying taxes or losing money and not, I'll pay my taxes gladly.

walker-talker
01-03-2002, 03:26 PM
I am with you stahls. I work full-time and mow on the side, but hopefully go to full time mowing in spring of 2003. I am using the time to purchase stuff in advance. Last year I will show a loss and will be able to take some money off my income from my full-time job. My did is a retired IRS accountant, this is a plus. Last week I purchased a projection tv (picking it up today), now I need to find a way to write it off as biz expense. I will use it for business presentations.....yea that's it.....lol. This is a very worth while thread and I have learned a lot.

MATT

Marquis Lawn
01-03-2002, 03:45 PM
I'm not advocating that all $$ go into assets (read-- toys). A person has to be able to eat, pay a mortgage, and enjoy the other niceties of life. These things unfortunately take real $$ and can't be deducted away. That said, you need some level of income to make this worthwhile. As I said in my post, I still net 25% of revenue. This is still a good chunk, especially when combined with my wife's income.

All I am saying is take a look at all the nearly infinite deductions that are out there. Many of these are things we all consume anyways, so why not deduct them?

Some things are not, but these "toys" are our benefit for running the show. Bravo to Walker if he can justify the big-screen to the taxman!!! If he pays all his expenses and still has money to burn, and he wants a big TV, then I'd rather he spend $2000 on what he wants, instead of keeping $1400, and paying $600 to the IRS.

stahls2
01-03-2002, 04:20 PM
Bruces,

I think you may have miss understood what I was trying to convey, which is my fault. Obviously, a business should be profittable, otherwise, a person should not be in that business. The original thread starter, NELSON, had questions in reference to SOLO INCOME. Because my business is small, it is best for me to show no profit (income) or even a loss, for know, take as many deductions as possible, purchase the new equipment, and any profit leftover, put back into the business to allow to grow and prosper. Because I have a full time career already, I have the luxury of doing this. As the business grows, I'm sure I'll be paying alot of taxes as everyone else.

stahls2
01-03-2002, 04:27 PM
Walkelr - Talker

Let me know how that projection screen TV mows in wet grass.:D
Just kidding. I hope your dad knows what he is doing. A projection screen TV seems like a stretch. I'm not advocating a misrepresentation to the IRS in any way.

KellyD
01-03-2002, 04:29 PM
I may not be the sharpest tool in the shed, but I don't see how you can say that if you show a loss, or write off all your income, the business legitmately made no money.

For example, let's say I run 50K miles a year on my truck, for business miles. 50K X .38 (.38 cents per mile deductible per IRS) =19K. That means I get a 19K a year tax "credit", which comes right off the top of my gross income.

Let's further assume that my truck only gets 8mpg while towing my equipment. So 50K / 8mpg = 6250 gallons of fuel (at a whopping $1.50 a gallon) means 6250 X 1.5 = $9375.

That means, $19000 (credit) - $9375 fuel costs = $9625 extra tax credit. Did I spend $9600 on tires, oil, and other truck costs?....I seriously doubt it. And, all the fuel receipts I have for the other equipment are in the form of receipts, so they are deductible on top of all of this. How much income does 9K in credits eat up?....Around 26K!

This is just looking at one area of tax credits, and I still don't see how you can say you can't write off all your profits legitimately.

Like I said, I'm not the sharpest tool in the shed, but these numbers seem pretty realistic to me.

Nelson
01-03-2002, 04:52 PM
Originally posted by Nelson



Homer I make 37,500 a year know @ my job.

That is what I gross !!!!!!!!!!!!!!!!!!!!!!
Not Net...........

So can I make It? Here in Sunny Florida ? If my Job goes
UNDER? I say Sunny Florida, but it is Cold as #$@%^ here .:blob3:

stahls2
01-03-2002, 04:56 PM
Kelly D,

By what I have read in your reply, your tool is sharper than you think. Well put. You CAN take your entire expenses off as deductions for a maximum of around 27k. (This may have changed, don't quote me.)

For Example: (Numbers for Example Only) Estimated!
ZTR $8,000
Truck $5,000
Trailer $1,600
Trimmers$ 600
Blowers $1,000
Mileage $9,000
Misc. $2,400
TOTAL: $27,000

Profits: $27,000 (Example Only)!!

Profits - Business Expenses (IRS Deductibles) = Zero Income

The Zero Income is for the IRS only.

In reality, a person will probably be making payments on some if not all of the equipment, therefore, having a profit.

For Example:
Monthly Gross Income - Monthly Expenses (Gas, payments, insurance) = Monthly Net Income (IE. Profit, in your pocket)

I hope this clarifies it for everyone. If not you can e-mail at Stahls2@aol.com. Great site, with discussions, coming from great people.

thelawnguy
01-03-2002, 05:12 PM
Originally posted by KellyD
That means, $19000 (credit) - $9375 fuel costs = $9625 extra tax credit. Did I spend $9600 on tires, oil, and other truck costs?....I seriously doubt it. And, all the fuel receipts I have for the other equipment are in the form of receipts, so they are deductible on top of all of this. How much income does 9K in credits eat up?....Around 26K!

This is just looking at one area of tax credits, and I still don't see how you can say you can't write off all your profits legitimately.

So I suppose some day the truck fairy is going to leave you a shiny new truck under your pillow? Driving 50k a year after 4 years 9600x4=the cost of your replacement truck.

There is no free lunch.

Better spring for a new file bud ;)

MIDSOUTH
01-03-2002, 05:32 PM
[QUOTE]Originally posted by stahls2
[B]Kelly D,

By what I have read in your reply, your tool is sharper than you think. Well put. You CAN take your entire expenses off as deductions for a maximum of around 27k. (This may have changed, don't quote me.)


)

There is a not maximum for ALL deductions. It is a maximum for items that can be depreciated, instead of wrote off in full. I think it was 24000.00 last year.

HOMER
01-03-2002, 06:07 PM
If the job goes south then you'll find out! I know you can do that much (gross) with a handful of residentials. If you can squeeze $1000.00 a year at least out of each residential account then you can pretty much figure each one is a $1,000.00 increase per year in gross income. Throw in a couple of decent commercial accounts that pay 3 -400.00 a month then you got another 3600-4800 a year. It adds up quicker than you think. Only one thing to do is take that leap.................when the time is right.

A journey of a thousand miles begins with the first step........(not an original Homer quote)

Nathan
01-03-2002, 06:11 PM
I think the one aspect that everyone hasn't told you yet is that success is not overnight, even if you have excellent business sense and great work experience in the field. I am sure most on this board will agree that it will take 5 years or so to get to where you feel very successful and extremely stable.
Yes you can make more than at your current job, but you will work much more, with no paid vacation or benefits.

My first year I netted 19k. Since it has grown, but slowly.
Make sure you know your true feeling about your time.

Nelson
01-03-2002, 07:24 PM
Originally posted by Nathan
I think the one aspect that everyone hasn't told you yet is that success is not overnight, even if you have excellent business sense and great work experience in the field. I am sure most on this board will agree that it will take 5 years or so to get to where you feel very successful and extremely stable.
Yes you can make more than at your current job, but you will work much more, with no paid vacation or benefits.

My first year I netted 19k. Since it has grown, but slowly.
Make sure you know your true feeling about your time.

I fully understand. Also you will not work 52 weeks out of the year to make this, like I do on my full time job. Am I correct?

HOMER
01-03-2002, 07:28 PM
Living in Jacksonville you shouldn't have any trouble signing people up to 12 month agreements. Might want to spend the $29.95 and get those templates at the lawnsite store. Just try to get a good price for each and every account.......don't take on junk just to turn a dollar.

bruces
01-03-2002, 10:03 PM
Originally posted by KellyD
I may not be the sharpest tool in the shed, but I don't see how you can say that if you show a loss, or write off all your income, the business legitmately made no money.

For example, let's say I run 50K miles a year on my truck, for business miles. 50K X .38 (.38 cents per mile deductible per IRS) =19K. That means I get a 19K a year tax "credit", which comes right off the top of my gross income.

Let's further assume that my truck only gets 8mpg while towing my equipment. So 50K / 8mpg = 6250 gallons of fuel (at a whopping $1.50 a gallon) means 6250 X 1.5 = $9375.

That means, $19000 (credit) - $9375 fuel costs = $9625 extra tax credit. Did I spend $9600 on tires, oil, and other truck costs?....I seriously doubt it. And, all the fuel receipts I have for the other equipment are in the form of receipts, so they are deductible on top of all of this. How much income does 9K in credits eat up?....Around 26K!

This is just looking at one area of tax credits, and I still don't see how you can say you can't write off all your profits legitimately.

Like I said, I'm not the sharpest tool in the shed, but these numbers seem pretty realistic to me.

Kelly,

Don't want to get technical on you, but what you mean is a deduction, not a credit. A deduction reduces your income, a credit comes directly off of the tax bill. The deduction reduces your income dollar for dollar.

Example
Income without truck expenses, 30,000.

Tax on 30,000 @ 40% (including self employment tax) 12,000.

Income with truck expenses 30,000 - 19,000 = 11,000.

Tax on 11,000 @ 40% = 4,400.

So, the 19,000 deduction saves you 7,600, very significant, but it doesn't quite give the benefit you are talking about.

The savings is going to be = deduction times tax rate.

The savings could be higher if the deduction drops you in to a lower bracket, but it is not a dollar for dollar credit against tax.

Yes, you might get a higher writeoff on vehicle expenses than your actual out of pocket costs. However, don't forget the depreciation on the vehicle. I've seen figures from some of the rental companies that indicate the actual cost to operate a passenger car at 40 cents per mile or more when all costs are included. If you have a 25,000 truck that you can drive for 100,000 miles, that is 25 cents per mile for depreciation.

If that is true, the depreciation expense in your 50,000 miles is 12,500. Add your gas costs above and you are at 21,875. If the depreciation is just 1/2 (say you can get 200,000 miles out of vehicle) you are at 6,250 plus 9,375 for gas or 15,625 total expense before insurance, repairs, etc.

Depending on cost of vehicle, miles driven, etc., you might or might not come out ahead on the mileage write off. Usually, the heavier duty the vehicle (and more expensive), the more likely that taking actual expenses instead of the standard mileage rate will give you a better tax deduction.

It's a bit of a pain, but can be worthwhile to keep track of vehicle expenses and mileage to see which gives you the higher deduction.

walker-talker
01-04-2002, 10:18 AM
Originally posted by stahls2
Walkelr - Talker

Let me know how that projection screen TV mows in wet grass.:D
Just kidding. I hope your dad knows what he is doing. A projection screen TV seems like a stretch. I'm not advocating a misrepresentation to the IRS in any way.

I was joking, but it would be nice. There was a thread about some people writing off their ATV, which actually was legit, to a dregree.

MATT

MRPLOW
01-04-2002, 02:33 PM
I will try and help on this tax discussion as there seems to be a lot of confusion, us self employed people don't pay that much more in taxes than employed people, its just that when you are employed you don't see the gov taking the money so easily.

I will give you an example of a person making $35,000 from an employer and a self employed making $35,000 after expenses. I will only show the federal tax liabilities(With just standard deductions) as states and citys differ, but the combined 2 will generally be about 5%.

Employed making $35,000.
7.5% for OASDI(Old age and survivors disability insurance, commonly called payroll taxes) $35,000x.075=$2,625.
$35,000-$4350(standard deduction)=$30,650-$2750(one dependant0=$27,900x.015(15%)=$4185.
$4185+$2625=tax liability of $6810.

Self employed making $35,000 after expenses.
15% for OASDI. $35,000x.015=$5250.
The rest of the tax is the same as for employed person $27,900x.015=$4185
$4185+$5250=$9435.

So its $6810 for employed and $9435 for self employed, but there are many opportunities to write off things as self employed expenses to lessen the gap.

Also the more you make the closer the gap is % wise because the self employment tax is always 15% where as the Fed tax creaps up to 36% with larger incomes

MRPLOW
01-04-2002, 02:47 PM
Kelly sorry toburst your bubble but you cannot take both the standard mileage deduction and then also deduct gas for your truck. The standard mileage includes Depreciation, gas, insurance, repairs, ect. The only thing you can deduct related to your automobile in addition if you take the standard mileage would be interest on the loan. Further if you take the actual expense method for your vehicle you may never again use the standard mileage deduction.

KellyD
01-04-2002, 05:46 PM
Those figures were a side by side comparison, not in addition.

I figured total deduction at .38 cents a mile, then compared it to real costs, to give you an idea of how you come out ahead with the deduction.

Also, I said that any fuel you spent on other equipment would be deductible if you had fuel receipts.


I agree, there is much confusion on here, and in the end I think it best we each follow the advice of a tax professional that we trust. This becomes very misleading, and I'm sure confusing to many on here.

Nathan
01-04-2002, 08:25 PM
Nelson, Yes you will probably work less weeks per year(only if you choose), but you will also probably work more than an average job 52 weeks-2weeks vacationx40 hrs/wk=2000 hours per year. we work more like 30 weeks @6days x 9hrs, 10 weeks@5days x 9hrs and other 12 weeks working every other week(6 weeks x 35 hrs/wk) with extra winter jobs thrown in whenever they come( approx 15 per wk for other 4 weeks, we usually take 2 weeks off for the holidays. total=2340. So we work about 340 hours more than someone with a 9to5 and no overtime. Yes, most people work a fair amount of overtime, but not that much, plus they make time and a half.
Dont't get me wrong, I love what I do and I am not trying to dissuade anyone from entering the industry, I just want everyone to really weigh reality against fantasy.

LAWNGODFATHER
01-04-2002, 10:19 PM
Get a good CPA and then you'll learn to wirte off stuff you have never even thought of.

And remember, different states, differnent counties, different laws and procedures.

skyphoto
01-05-2002, 08:06 AM
Here is my 2 cents!:)

I have the support of a wonderful wife (which has a comfy job of her own) and this is how we look at it......If we have $40,000.00 in sales in a yr on my business and we write off all but 5 or 6 thousand and its all legal(which IS possable every year & could actually show just about any income we desire to a point)......We keep our taxes under 1000.00/yr. Now this is also a double edged sword because the bank wants to know what your business contributed to your income which in our case is 5 or 6 thousand NOT the 40,000.00 in sales! At least with all the banks around here no matter how you show them you have chosen to take these deductions and that you could have showed about 34 thousand $ actual profit they DONT CARE! But if I had a 35 K yr job working for someone else I could have spent all my money on alot of the same stuff and the bank still would have looked at my income as being 35k?!?!?!?!? Go figure! Banks hate the self employed! But they sure love those city utility workers!

Peace!

bobbygedd
01-05-2002, 11:02 AM
ok, now i have a question: i been seeing numbers here in the 30s and 40s. is anyone doing "really well". by this , according to my standards, i mean is anyone able to take a paycheck of 70, 000- 90, 000 a year as a solo, or with only one employee? this is about what i would need to go full time.

Propdoc
01-05-2002, 11:05 AM
Nathan,

Recently I seen on the news that Americans work on average more than any country in the world, including the Japanese. The report that I seen said the average American works 45 hours a week.

bobbygedd
01-05-2002, 11:11 AM
45 hrs a week? thats like part time to me. i thought the japs were lifers at their job?

65hoss
01-05-2002, 11:12 AM
Originally posted by Propdoc
Nathan,

Recently I seen on the news that Americans work on average more than any country in the world, including the Japanese. The report that I seen said the average American works 45 hours a week.

No, the average worker may show up to work for 45 hours, but they don't work 45 hours!:blob2:

Propdoc
01-05-2002, 11:25 AM
Good one Hoss, I guess it just depends on the field their in.

bobbygedd
01-05-2002, 12:40 PM
yes hoss, like i told a guy one time: man should work 8 hrs and sleep 8 hrs, but not the same 8 hrs..........

thelandscaper27
01-12-2002, 03:52 PM
If some of you fellows put ads in a local news paper, Wich month would be best to run an ad?? How long should I run the ad?

summitgroundskeeping
01-12-2002, 06:09 PM
Hey bud, your first year is gonna suck, be ready. I'm only 17 (yes I'm YOUNG, nuf said about that), but when I went out and got everything I needed, the overhead kept me from having ANY spendable cash my first year. My parents never give me any money b/c they keep a large roof over my head, I'm under thier med. insurance, and they feed me usually at least two times a day during the working seasons. But hey, if you can't deal w/no money for a year b/c you have a family (I know I never could) this isn't for you.
Get ready for headaches, poverty, and exaustion.
It is worth it in the end though
Good luck

65hoss
01-12-2002, 06:33 PM
Originally posted by thelandscaper27
If some of you fellows put ads in a local news paper, Wich month would be best to run an ad?? How long should I run the ad?

You would want to put the ad in early. Probably start 1st week of March and run thru mid April. Get flyer out there.

bobbygedd
01-14-2002, 08:08 PM
so, since no one responded to my question, i guess $30-$40, 000 is about it huh?

walker-talker
01-14-2002, 09:25 PM
bobbygedd,

I posted a thread of this sort a few months ago and people really don't like to discuss there income with other people. Personally myself, does not bother me. Maybe you could start a new thread with a "poll" for solo LCO's. This way people would be more opt to let you know what they make without giving their identity. You could start the poll at 25K and poll in increment of 3K all the way to 50K. Make sure to let them know that it is for solo's and this is to be their NET income. Just an idea. I would like to see this, but I don't know how to start a poll.

MATT

bobbygedd
01-14-2002, 09:32 PM
matt, i dont know how either. but for a bunch of folks who are "legit" in every way, i dont know why they just cant tell it like it is. i have my own personal goals , and would really like to know if anyone else has been able to do what im trying to do.

65hoss
01-14-2002, 10:48 PM
Basically our personal #'s are our business only.

jrblawncare
01-15-2002, 05:37 AM
Nelson,just may thoughts,You sound alot like myself a few years back....I was working for Kodak up north since 1980,about 1987 I started a doing lawns and loved it.Thought about going full time once I really looked at it, I had the best of both worlds...A full time good paying job with great benifits and made extra money on the side doing something I enjoyed!Well....a few years ago..after 19 years with Kodak I was down sized...at that point I moved down here(my wife is from KY)And started full time in lawn care,after year 2 things are going well,but I'am not up to full speed yet,this will take time.My wife is a part time RN and has the benfits...To me that is one of the biggest things if you have kids...Health care.I love what I do,but I'am working much harder and longer days....I still have alot to learn as far as the business side of things go.....beleave me...what you gross and what goes out....Taxes and expenses is a BIG difference.Enjoy if you can, the best of both worlds while you have it.Best of Luck,JOHN

Nelson
01-15-2002, 04:31 PM
jrblawncare, Well I plan on keeping my full time job now. #1 I do not have that many accounts only been in this trade a couple of months.

#2 Health Insurance

I have full support from Wife & kids if my full-time job does goes South. But for now I guess I will have the best of both worlds as you said???? The only thing is Working your ASS off does not seem to be the best of both worlds to me??? Plus If I do it part-time for a peroid of time. I know it's gonna rain on a few Saturdays, Then What? I do understand what your saying, but it's alot easier said than done !!!!! Thanks for Input though !!!:o :o

cclllc
01-15-2002, 05:52 PM
These numbers all look and sound good but what if the summer turns off dry for about 2 or 3 months.I hope you have an emergency fund to fall back on.I guess that is the real reason I have never took the fulltime plunge.I have been at my regular JOB
for almost 17 years now and I am 42.I have averaged at least 60k the last 2 years there and around 40k on the side.I still want to quit but I think I have waited too late to do that now.I mean I can hang around another few years and have my retirement benefits.I was thinking of maybe getting more help to releave the stress and tough it out till I'm 55 and then do it fulltime myself.Are any of you in the same boat?What would you do?

bruces
01-15-2002, 07:15 PM
Originally posted by cclllc
These numbers all look and sound good but what if the summer turns off dry for about 2 or 3 months.I hope you have an emergency fund to fall back on.I guess that is the real reason I have never took the fulltime plunge.I have been at my regular JOB
for almost 17 years now and I am 42.I have averaged at least 60k the last 2 years there and around 40k on the side.I still want to quit but I think I have waited too late to do that now.I mean I can hang around another few years and have my retirement benefits.I was thinking of maybe getting more help to releave the stress and tough it out till I'm 55 and then do it fulltime myself.Are any of you in the same boat?What would you do?

I'm going to be 50 next month and I've been in accounting for 27 years, with the same CPA firm for about 18. I'm am going part time at the accounting firm after tax season and going to expand the lawn care business. No significant retirement or anything that I am giving up, so no real risk there.

I also have the luxury of having a wife with a very good job. I hope to turn the lawn business in to a full time business next year and continue the accounting on a part time basis (full time during Jan-March when the lawn business is dead).

Also, if it doesn't work, I can always go back to full time accounting if necessary.

Nelson
01-15-2002, 08:00 PM
34.5 Years Young Here CCIIIC !!!!!!!!!!!!!!!:p