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View Full Version : How to Spend $50,000


randyhutch
01-15-2010, 11:27 AM
If you had $50,000 to start a lawncare business completely from scratch offering most of the basic maintenance services how would you spend that money? Starting with no equipment what so ever. What equipment would you buy, what customer base would you target, would you go at it alone or maybe have a couple crews, etc?

Lazer Cut
01-15-2010, 11:44 AM
for one dont just go at it with crews you gotta build up to that.

$50,000

f250 diesel ext cab 8ft bed
10,000 postcards
2 Toro Grandstands 52"/23hp and a 60"/26hp
1 Exmark TT 36"/15hp
1 16ft tandem axle trailer
1 16ft enclosed trailer
snow way plow
salt spreader
lesco drop seeder
two fs90 weedeaters
two br600 Magnums
--and all other misc equipment


id do it this way... spend 35k and bank 15k
Newer truck 3 years old or newer for reliability
used Grandtand 52"/23hp
used 36" metro eXmark
used open landscape trailer 16ft
used enclosed trailer 16ft
new weedeater(s) fs90 Stihl
new backpack blower br550
Lesco drop seeder
shovels, rakes what not add that in somewhere lol
Oh... 10,000 postcards are in the mix too

SangerLawn
01-15-2010, 11:46 AM
Buy a used truck 4x4 no more then $5,000
New 60 inch mower – around $9,000
New 36 inch walk behind – around $4,500
Used 16 foot trailer – around $1,000
2 new red max trimmers – around $1,200
2 new red max blowers – around $1,100
Around $1,000 in flyers
Around $500 on a nice trailer tailgate sign

For winter I would buy a at least a 8 foot v plow – around $5,000
Snow blower and shovels around $800

Getting everything I need to stay legal and having it paid up for 2 years

Since it will take at least 2 years to build up a good customer base I wouldn’t hire anyone else and wouldn’t spend any more money unless I absolutely had too……might even get a part time job to help keep from spending the rest of the money until I had enough customers to support the business.

mdlwn1
01-15-2010, 01:48 PM
good luck going out of business with no operating cash flow.........

Lazer Cut
01-15-2010, 01:57 PM
which person are you referring to mdlwn1?

Both of us who commented say fliers or mine is postcards... so common since would be to pass them out right? then that would generate customers right? then there will be a cash flow right?

Both of us have money in the bank to help out if we do not make it... all items are paid for in both replies and sangerlawn even suggested a part-time job which is really smart idea so you can have a little money coming in to help out...

mdlwn1
01-15-2010, 02:05 PM
The cash comes after the work has been done..after fuel labor etc. You would need easily 3-6 months operating cash flow to for a less than hectic start. You could do it for less, but good luck sleeping at night and paying attention to a girlfriend or wife. Secondly.....either buy a used pos or buy new and FINANCE. In terms of cash flow...if you think you can get the business...than BY ALL MEANS finance as opposed to pay cash for either new or used. Financing would allow all equip to be had for less than 10k..leaving you with 40k for operating...plus you have no breakdowns. Im sure someone will respond with "I dont borrow anything...pay cash"..blah blah blah...just because they arent capable of managing money doesnt mean it isnt possibly the best option. Almost every successful business in the modern world operates this way...accept of course the few "winners" that will respond that you should pay cash.......

newtostone
01-15-2010, 02:38 PM
when starting keep it cheap everyone spends too much money.

$2000. Used turf tracer
$1000. Used 16' Open trailer
$450. BR600
$400. FS130
$500. Random gas cans rakes and such
$7500 Ads
$8000. Used Truck (the used truck will come with a plow)

SangerLawn
01-15-2010, 02:56 PM
The cash comes after the work has been done..after fuel labor etc. You would need easily 3-6 months operating cash flow to for a less than hectic start. You could do it for less, but good luck sleeping at night and paying attention to a girlfriend or wife. Secondly.....either buy a used pos or buy new and FINANCE. In terms of cash flow...if you think you can get the business...than BY ALL MEANS finance as opposed to pay cash for either new or used. Financing would allow all equip to be had for less than 10k..leaving you with 40k for operating...plus you have no breakdowns. Im sure someone will respond with "I dont borrow anything...pay cash"..blah blah blah...just because they arent capable of managing money doesnt mean it isnt possibly the best option. Almost every successful business in the modern world operates this way...accept of course the few "winners" that will respond that you should pay cash.......

Yep…and the finance before you can afford is the prime reason on why 9 out of 10 business go out of business in the first 3 years…..or look at the economy and how many people are loosing there houses because they bought then for some reason couldn’t make the payment…as a result they loose there house and destroy there credit.

If you have the money get all of your business bills paid for for 2 year. Pay off all of your equipment. If for some reason things don’t work out you will not be rushed to sell anything because you wont have payments and if nothing else you can make a little side money after you get a full time job.

KS_Grasscutter
01-15-2010, 03:22 PM
$4500- Mid 90s Z71 pickup
$1200-6.5x12 trailer
$8500-Grasshopper 223/52 with bagger
$4000-Toro T bar 32"
$500- Toro 2 stroke single stage snow blower
$500- Redmax BP blower
$300-Redmax trimmer
$300-Redmax Edger
$500- Misc gas cans, hand tools etc
$1500- Direct mail advertising
$2000- Misc admin expenses-insurance etc.

= about $24k. Leaving $26k to live on until your business takes off. Once you get about 40 accounts get a 1 ton flatbed dump. Once you get about 60 get a helper, and a 16' trailer and 48" Walker or another Grasshopper. Once you get 100 get another helper. As time goes buy fertilizing, renovation, and snow equipment as needed.

scottgalat
01-15-2010, 04:25 PM
Equipment is an expense. Your goal needs to be to spend the least amount needed to produce maximum productivity and profitability. $0.00 is the goal, but that is impossible, so spend as close to $0.00 as you can.
It is hard to predict your actual needs. There are ways you can delay your equipment purchases until actual need arises. Delaying equipment purchases as long as possible, as you are adding accounts, allows you to buy the right gear for YOUR accounts. This insures that you have purchased the right equipment. I once had a route in Laguna Beach Ca. that required only 21" mowers. A 60" hydro rider would have sat on a trailer unused. I have also had routes in your part of the nation that consisted of residences on 2 acres or more each. A 21" wouldn't be the right choice on acerage. When you have no customers...you need no mower. Your 1st need is for customers. That is the hard part, and should be of your budgetary focus right now. You can always figure out how to get them cut after you get them. Rentals are available to get you going, or team up with someone that is equipped and make some kind of arrangement that covers your route until an ACTUAL NEED HAS ARISEN. You may not get accounts rapidly. Most "rookies" don't figure it out to good. Hence, you don't need $50k of gear sitting around as your "hoping" to develop a customer base. Your money needs to be directed to advertising that works. Equipment dosen't make you money, your customers do. The equipment is just tools, an expense. Customers are the high value portion of a lawn service, starting out, you need them, not gear. Buy what's needed, when needed. Do not get confused that buying equipment is the important part of establishing a lawn business.
It is the least important part. Sure you need to be able to get the lawns cut professionally, but you don't need any money, or a small amount to get that done while your building. Meet someone that has gear and not many accounts. Offer a labor trade-off and small compensation: " Let's go mow your 7, then let's go mow my 7, I'll buy the gas."
You don't need any gear now, you need customers, the customers' landscapes will determine what your equipment needs are.

randyhutch
01-15-2010, 04:58 PM
Thank you for the very good answers so far. And I think all of you are right to some extent. Just to throw this out there I am not going to borrow money to get into the business. The only debt I currently have is a house and student loans.

Also the $50k I am speaking of would not be money that I have sitting in my bank account or money borrowed. I have the fortune of being paid for doing something in the sales field for a big organization that will make them a lot of money and getting paid in a lump sum, which isn't't included in my every day job. I also have the fortune of my wife making very good money as well and we would be able to live on her income in the beginning and still get by.

I already have purchased some equipment with some money out of the old bank account. Stihl FS90 Line Trimmer, Stihl FC110 Edger, Stihl MS290 Chainsaw, Stihl BR550 Blower, Stihl HS81T Hedge Trimmers, 2004 John Deere 7H19 54" Walk Behind with 140hrs at what I thought was a great price. I also have most all of the hand tools etc. that I would need. I still need a truck and trailer and all the things that would make me legal at the very least along with advertising essentials.

The services I would like to provide are, mowing, trimming, edging, cleanups, hedge trimming, tree trimming, and I would like to get into irrigation and small landscaping projects down the road. At this time I don't have the desire to be bigger than a one man crew but we will see how I do the first 4 or 5 years. I also assuming I do receive that money would not plan on spending it all and making sure I leave some in the bank for operating costs. And Scott I think you're right I shouldn't buy another mower until I get some customers and figure out what type of mower I actually need.

scottgalat
01-15-2010, 05:11 PM
Since I got something right, I gonna go a little further, I think a One-man operation works best as a " one man, plus one"
Adding one helper improves productivity X2 for the added expense of 1 employee.
$75,000 annual gross earnings can become $150,000. Security also comes from an employee knowing your route and having a good working relationship with you. You can be sure your customers are well treated if you become unable to personally service them. The employee is also valuable as the 2nd crew leader. I encourage you to move a little past working solo, and experience higher earnings. PM me for marketing tips that work.

TGM
01-15-2010, 05:22 PM
I already have purchased some equipment with some money out of the old bank account. Stihl FS90 Line Trimmer, Stihl FC110 Edger, Stihl MS290 Chainsaw, Stihl BR550 Blower, Stihl HS81T Hedge Trimmers, 2004 John Deere 7H19 54" Walk Behind with 140hrs at what I thought was a great price. I also have most all of the hand tools etc. that I would need. I still need a truck and trailer and all the things that would make me legal at the very least along with advertising essentials.


well, if you have $50k coming to you (taxes?)... i'd recommend spending no more than $6k for a decent truck and 6x12 open trailer, then $4k for spring/summer advertising. keep the extra $40k for capital until you build up customers. realistically you CAN'T build a business with GOOD customers in 1 year. if you get 60 accounts in the first year you're probably not making a profit after expenses. the legal end of the business is pretty cheap actually and insurance is relatively inexpensive if you keep the liability low. check with a lawyer if you're unsure.

i started with more debt than i should have..bad mistake.

Turf Commando
01-16-2010, 01:36 AM
Myself, I'd invest in the snow removal business (trucks & plows) the revenue from that would buy me lawn equipment ....

RJR7110
01-16-2010, 02:49 PM
50,000??? Hmmmmmm I'd probably spend it on fast cars and loose women:drinkup::drinkup::drinkup:

Golfpro21
01-16-2010, 03:29 PM
Yep…and the finance before you can afford is the prime reason on why 9 out of 10 business go out of business in the first 3 years…..or look at the economy and how many people are loosing there houses because they bought then for some reason couldn’t make the payment…as a result they loose there house and destroy there credit.

If you have the money get all of your business bills paid for for 2 year. Pay off all of your equipment. If for some reason things don’t work out you will not be rushed to sell anything because you wont have payments and if nothing else you can make a little side money after you get a full time job.

Its not the stone age......businesses finance...and yes even successful ones finance......doesn't mean you gotta buy an over the top piece of equip....if you got the contracts and know you have payments, if your smart with finances you can get farther ahead using your cash flow in wiser ways.

blb515
01-16-2010, 03:41 PM
I just started this past year and this is what I did:

Bought used 36" Encore WB and used 32" Exmark Metro-$1200
Bought used 12' Open Trailer-$700
Bought new BR600-$500
Bought new FS90 and used FS80-$400
Bought misc. items-$300
Advertisement-$300

I used the used equipment until I was established with some good customers and then bought a new Quick36 and will sell the used WB this spring.

I didn't want to invest alot of money into something that I was unsure as to whether or not it would be profitable. This year I will buy a new ZTR and continue to grow.:clapping:

SangerLawn
01-16-2010, 06:09 PM
Its not the stone age......businesses finance...and yes even successful ones finance......doesn't mean you gotta buy an over the top piece of equip....if you got the contracts and know you have payments, if your smart with finances you can get farther ahead using your cash flow in wiser ways.

Hmmm….if you already have the customers then you shouldn’t be worrying about income???? Sooooo….if you have the money to pay cash then why in the world would you want to pay finance charges to someone else???? If you are worried about income then why in the world would you want to give your profit to someone else in finance charges?

I am not saying do not finance sine most of our mowers we financed. I am simply saying if you have the cash then pay for the things you need instead of paying more to finance.

CkLandscapingOrlando
01-16-2010, 06:40 PM
If you own your stuff out right, your never out of business, just waiting on your next job. From what you listed you just need a cheap truck and trailer. Get a 16ft trailer to grow into. Nothing like paying for 2 trailers in a year cause the first was to small after you pick up work. Then put a few thou in marketing. Save as much as you can out side of that. Set your self up as a corp and lease the truck and equip to the company