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Suzzal
06-11-2003, 02:25 PM
I am thinking about getting into lawn care fill time but am not willing to quit my day job just yet. What are some potential incomes for a 1 man crew(me). I know this can be all over the board but I would like to know a good average of monthly income in this field. Consider me very aggressive and hard working in Birmingham Alabama.

By the way, it seems like everyone and their brother AND sister are getting into this biz, is the market getting saturated?

Thanks in Advance!

Mike

65hoss
06-11-2003, 04:56 PM
Originally posted by Suzzal
I am thinking about getting into lawn care fill time but am not willing to quit my day job just yet.
By the way, it seems like everyone and their brother AND sister are getting into this biz, is the market getting saturated?

Thanks in Advance!

Mike

ROTFLMAO hahahaha. Sorry, that just was too funny the way you typed it.

1st year or two don't expect to make much income. It takes time to get a customer base. At this late stage of the war with grass for this season I would just try to find a few customers to do for now. It will get you some data to work off of for next year.

Suzzal
06-11-2003, 11:31 PM
Huuuuuummmmmmmm...............

I did not mean start today or all at once.

Would someone walk away from an $80k a year job to do this? Is there that much money to be made in this industry...

Mike

Green in Idaho
06-12-2003, 12:02 AM
Let's look at 1849. There were a lot of farmers saying "boy everyone and their brother AND their MOTHER is going out West to prospect for GOLD." There must be a lot of money in those hills! Should I leave my $800/year farm to chase that gold?

That was because a few people struck it rich!

Striking it rich in lawns is building a business that can be sold to one of the nationals for a few million dollars. Or passing it to your kids while you pull a retirement income. Just like the '49ers only a FEW do it. And the fact that you are asking that question is a strong indicator that you would have a tough time striking it rich. BUT everybody loves an optomist! Right?

************
Realistic income for a new part-timer? Less than $15/hr after expenses AND taxes.

As a part-timer AND at YOUR tax-rate given the other $80K wages, your possible income AFTER taxes will be,.... LMOA! wait.. wait.. I can't stop laughing to work the numbers.... happy prospecting!

I would recommend hiring a lawn care biz to preen your yard while you enjoy spending your cash!

greenman
06-12-2003, 12:15 AM
80k per year. LOL, you wont make that in your third year UNLESS you bought some accounts or bought a company, had some give to you, etc. Id say stay where you are, but I left a good paying job too, and never regret it for a second. The long term....80K is pocket change (at least I am hoping for that....).

Green in Idaho
06-12-2003, 12:16 AM
Not interested in striking it rich?

Average income for a full-timer solo operater AFTER expenses and taxes $30,000.

Anyone making $80K should be smart enough to throw some numbers on a paper and do the math... :sleeping:

Suzzal
06-12-2003, 12:20 AM
I have searched most of your 240+ posts Green, and the vast majority are very negative to rookies. What kind of chip is on your shoulder? Pine or aspen....

Back to questions:

Do most of you think that the market is getting saturated?

Do you see any consolidation of larger companies buying out smaller guys or just underbidding them like Wal-Mart has done to the great mom and pop shops?

Does personal service still beat price? Always?

Is the slow economy cutting into your income by folks cutting back on no essential items? Private as well as commercial.

Researching for my business plan!

Thanks in advance,

Mike

greenman
06-12-2003, 12:27 AM
Under bidding,yes.

The market is very saturated!

Its all about personal service and quality of work.

Ive seen no decline because of the economy.

Green, if I was only gonna make 30K net solo, I wouldn't be in this biz.

Rustic Goat
06-12-2003, 03:06 AM
Green in Idaho is a very negative fellow, maybe raised or lives in the bottom of a hamster cage he has so many chips to bear.
But, between insults he makes an occasional point.
It is going to be difficult to match 80K yr.
It can be done, but it is not anywhere near the average, many, many factors effect this business.

1. If you can't truly enjoy the lawn biz, then don't even bother.

2. Expect to make a LOT less than you do now for quite some time.

3. The market is, and always will be saturated. There are MANY new wanna-be's every year, most crash and burn for lack of planning, knowledge, too high hopes, thinking it's easy, finding out how deep your pockets aren't.

4. Big companies taking over, who knows.
Might try, would take a long time, doubtful of their success. Too many variables to be controlled as tightly as big companies would like.
Franchise take over of territories would be another story. That could happen, but only if franchise owner had very deep pockets and an 'I want it all' mentality.

5. Personal service means everything, and it means squat. Depends on the individual. Your job, should you decide to accept this mission, is to find enough customers (plus one) to make the kind of income you want to make, that good quality service means something to, and they're willing to pay someone else to do their lawn.

6. Economy = Mostly same as #5. There will always be people with enough money to buy/pay for what they want. Trick is finding/keeping enough of them to make yourself a living.

7. The subject of under bidding/under pricing. At this point it happens more out of ignorance/stupidity/and kids doing lawns, than a factor of big biz take over. Usually that's a territorial war thing.

Best wishes

Suzzal
06-12-2003, 09:20 AM
Great input guys!

This is all about setting expectations, my customers as well as mine....


Mike

Port City Lawncare
06-12-2003, 12:07 PM
You're not alone man. I've wondered these very same things in the past few days as I also just discovered this site. I feel like I'm getting lucky because I found some who had 40+ accts and wanted to sell out simply because he's made what he wanted of it, he's about to retire, and it's just hotter than a goat in a pepper patch here in Mobile.

Everyone's made great points, lots of great advice even I was glad to read. But the main thing it's going to come down to is your willingness to get out there and work. It's hot, dirty, rainy, did I mention hot? If you've got a strong will to succeed you'll be fine.

Green in Idaho
06-12-2003, 01:57 PM
Negative or just being honest?
There's little point to encouraging someone to jump off a cliff or to encouraging a town idiot to try to be the town doctor.... :dizzy:

Let's look at the numbers:

A solo operator working 7 billable hours for 6 days a week for 9 months has 1,512 hours of billable time.
Someone billing 8 hours (working 10) for 5 days for 11 months has 1,760 hours of billable time.

So for example sake's let say 1,600 BILLABLE hours for a year.
At $60/hr that is $96,000/year Gross. Most new operators do not bill at $60/hr but for arguements sake and to be optomistic I'll use it.

$96,000 gross less expenses of truck, trailer, equipment, fuel, insurance, etc. Generally, about 50% of gross goes to costs. Now you have $48,000 as net profit. If that was one's only income the tax bite for SE tax is $6,782. The fed/state bit will be $8,810 (fed) and est $2,400 for state. That leaves $30,008 to spend on personal expenses.

Considering a net profit of $48,000 is equivalent to an employee of about $45,000. But the solo operator doesn't have insurance, retirement, vacation pay, holiday pay, etc. The value of those benefits can be purchased and then the net pay for the business owner is closer to the $30's of an employee.

Keep in mind that example uses a fairly high # of billable hours and fairly high billable rate. Drop it to $45 an hour and 1,500 hours for a gross of $67,500.

On average, large operators (those with employees) report net income of 10-20% after paying employees. An employee rate may be $10/hr. If a solo operator gets the employee rate PLUS the net income then they the $14,400 (15% net) divided by the 1,600 hours that is $9/hr plus the $10 = $19/hr. Again VERY optimistic! NOT negative! But to be realistic, it is usually less.

Further for someone to jump into business without a clue of the industry.... How is such a person going to bill top dollar when they don't know proper fertilizer applications, insect/disease identification, methods for efficient operations....etc??? AND if they don't know BUSINESS concepts like putting estimates to pencil and paper to write a budget... and if they don't know marketing skills how are they going to get that 1,600 billable hours?

Sure it's possible! Lot's of people do it. Although as a percentage of those playing the game a small number break through to long-term success

Realistically there are inefficiencies. And realistically, most small operators make less than $40,000. Lots make less than $30. Many experienced ones net in the $30s. Therefore a reasonable average is $30k. That's what Mike asked. I offered my input.

Some operators get a $30 check for a 15 minute job and they think they just made a profit of $120/hr. If they could sustain that for 40 hours every week for 12 months without expenses they would be loving life!

Those that feel it is much MORE are often not paying taxes and other normal expenses. For someone working a full-time job and then adding lawns as a supplemental income it is REAL easy to NOT pay taxes on it??? YES they make a lot more. That same net per hour would be $30 or more per hour TAX-FREE, That is a decent income! For them to annualize it $30 x 2,000 hours = $60,000/year. That looks really good. But it's not an honest income.

For others that feel they are doing really well, they are generally operating out of the garage, or parents garage, or spouse is providing the insurance and benefits, or they got a dump of money to buy equipment and are not factoring in those costs. "hey I'm making $50/hr and only have to pay for gas and trimmer line. It's great! Come on in, take a swim..."

As for someone making $80K and starting a side business. The marginal tax rate for the side-line business is at least 40% federal plus the state rate (5% est). And part-timers inherently have a higher cost per hour. The $60 rate is chopped in half (at least) for expenses is then chopped in half again for taxes. Not too mention all the non-billalbe hours for driving, mechanical, preparing, billing, estimating... Hourly rate? Maybe $10/hr.

If someone jumps into lawns for the money, they are most likely going to be frustrated. Someone who enjoys it, and knows the technical stuff and the business stuff is going to succeed wildly they will make the top dollar whether they are solo or big biz.

That's just my humble opinion. I am happy to be shown otherwise.
:)

Suzzal
06-12-2003, 03:26 PM
Negative or just being honest?

Definitely negative.

Great points if it were not for all of the "other" stuff you add. You basically sound bitter about something.


Bye

Rustic Goat
06-12-2003, 04:11 PM
Hold on there Suzzal, It's probably true that Green in I. Gets up in the morning, eats lemons peel and all, puts sharp rocks in his boots, has customers that are afraid to not hire him to do their work.
But, while his numbers may be a bit heavy, he's offering a pretty clear dose of reality for someone earning 80K at an inside job and thinking they want to jump into the green industry as a solo or otherwise operator.

Green, I think we all have a love hate thing going for you. I know, I know, not that you give a dead rats backside. You've got to be a pretty tough hombre to scrape a living up there in Idaho. Between all there rocks and celebrities, it got to be difficult to find enough grass to mow, and that's when it isn't frozen or flooded.
Just keep that smile on your face.

Green in Idaho
06-12-2003, 04:45 PM
LMAo! That's funny!

Come on up, Goat to see the real God's country. We still have free-range sheep too. Not sure how goats and sheep get along. But we have some great trout, steelhead & salmon fishing, whitewater rafting, skiing, biking, hunting, and other fun stuff. The BEST in the WEST!

BTW I scrape my living as an accountant now a days. Works out a lot better for my feet and now I don't have to keep finding new sharp rocks. Now I sit on tacks...

Suzzal, you have an open invitation too if you don't mind lemons for breakfast. As does anyone else who wants to visit the Great State of Idaho! :D

p.s. We haven't had a flood in a LONG time though. Current problem: cricket infestation.

Green in Idaho
06-12-2003, 04:48 PM
Here's some gold:

harpoonalt
06-12-2003, 07:07 PM
Hear what you want in Greens post but he's doing you a favor and has run the numbers for you. I ran the numbers myself like he suggested and I would never do this full time. I love the work and enjoy myself but it's a tough biz full time. Try it part time and see, it's not what you think. This is my first year back in business after a 20 year hiatus due to family obligations and things sure are different. I can't imagine having to pay for health insurance, fund a retirement plan, and at the same time wondering what you'll do if you get sick or injured. Vacation? No work, no pay. Friends have a very successful business but say insurance is killing them and she is contemplating going to work just for health insurance.
Negative? no. telling you the truth...you bet , it's called tough love! you don't want to hear what he's telling you. That said, I admire those people who can make this business work for them full time and live well. They are a lot braver and smarter than I. But don't expect them in a few paragraphs to tell you how or base your decision on a few "go for it" posts. Run the numbers, examine your life and lifestyle, and ask specific questions. Try it part time if possible and learn with that full time job safety net.
And thank Green for his honesty.

greenman
06-12-2003, 11:38 PM
Originally posted by Port City Lawncare
and it's just hotter than a goat in a pepper patch here in Mobile.



LMAO!:D

Darwin
06-12-2003, 11:57 PM
Green, I've read your posts as a newbie for awhile now.

As you've stated the #'s don't lie.

Many folks out there may not want to admit that, for whatever reason it is,............but what you stated above is the honest truth.

I happen to like your posts (It's a cold glass of water in the face).

Many people out there may refuse to see your comments for what the are...................reality!.

This is just my opinion. Thanks.

Green in Idaho
06-13-2003, 01:00 PM
Originally posted by Darwin
I happen to like your posts (It's a cold glass of water in the face).

You mean like cold water on a HOT humid Indiana afternoon? Or like cold water on the face when you first roll outta bed?

I just like to call it like I see it. And I've seen lots of tax returns and financials statements for LCOs.

Anyone else have expected income figures????

GrassQuester
06-13-2003, 06:00 PM
Heck with the average I will make MORE!!!!!

Darwin
06-14-2003, 01:40 AM
GQ,

What a great attitude.

In this business (or any else) you determine your future.

Green,

"cold glass of water in the face"

I meant that for myself, the other newbies on the site, and many other long-timers here.

Read into it, for what you will.

The summer here isn't humid yet .............but it's cummin'.

Later




Green,

I had an interview once in Twin Falls..............where are you?

Auroris
06-14-2003, 02:58 AM
Now I'm not really a slow reader (regardless of having been raised in southern Idaho and lived there 26 years of my life :p), but I must say that as for billable hours, I lost about 0.5 just reading this post.

Green in Idaho, you ran some very realistic numbers... possibly discouraging - depending on how one takes it, but very real. Thank you for your time and effort.

In short, it pays to keep overhead down, do not grow too fast, and plan ahead wisely in a small business.

Green in Idaho
06-14-2003, 01:28 PM
I'm in Boise. As Auroris can attest, Idaho is divided into definite regions. It has a desert like Nevada, mountains like Colorado, farmland like Nebraska, and a few lakes like Minnesota. I like being close to all of them!

Auroris, what would possess to move from sunny S.I. to wet and cloudy WA?

*****************
As far as an expected income being discouraging, I would say it's not any more discouraging than any other business potential. Being a one-person operation is usually NOT that lucrative, whether one is a sprinkler tech, a mechanic, a framer, or an plumber. There are only so many hours in a year, there is a top billable rate, and one-person operations can't bill every available hour. There is much administrative ****, and misc time that can't be directly billed for.

If you are selling time you are limited. However if you are selling a product or selling on a commission, the income potential can be much greater! Would you rather mow for 1,600 hours year after year or make $1 on every bag of a your new patented fertilizer sold in America?

Making $30,000 in lawns is no more discouraging than making $30K as a heavy-equipment operator. It's a job! And someone who knows nothing about turf, but goes to the dealer and buys $10K of equipment to start mowing tomorrow just "bought themself a job." It will pay appropriately. Nothing wrong with that. But then it takes some skills, some capital, and some business sense to develop that job into "a business."

Auroris
06-15-2003, 03:52 AM
Green in ID, you are right, it really cannot be any more discouraging than making $30K at any other job... in fact, not many places can we be out in the fresh air and set most of our own hours for $30K/yr.

To make my long story quite short, I moved from Twin Falls to get a change in pace more or less (and what a heck of a shock it has been). Had met a wonderful girl from up here and loved the country (during the summer). Was ignorant to how badly the rain can depress a person after what seems like 13 solid weeks with no sun, though.

Coming back through there next weekend, though, for a quick trip back to the land of sage and crickets. :D

promower
06-16-2003, 05:42 PM
This is my first year, just enough work for full time. I'll make about $22,000 plus maybe an extra 3-$4,000 snow plowing. Last year I made $26,000 at a regular job, I'll generate about the same about of income, although expenses of being self employed I will make far less then I did last year. Just have to use all my free to get more work and hopefully within 3 years I will make what I did having a regular job. I am in it for the long run though and plan to make a a comfortable living in 10-12 years. I crunch the numbers seems like every night, it's stressful but if you want it bad enough you can make it.

Green in Idaho
06-16-2003, 06:52 PM
Good example. Thanks for sharing. That's certainly a decent income for a first year f-t.

Is that $22K gross income or gross profit (after expenses but before taxes)? Or net?

CMerLand
06-23-2003, 09:41 PM
Suz,

I have no actual factual evidence of what Im about to say, but my guess is that anywhere from 60 to 80% of Lawn care company owners out there have generally done nothing more then bought themselves a job by opening their own businesses.

Most have no clue as to how much actual money they make, they just become money pumps, keeping the cash flow cycling right on thru them. Many of them have to rely on their spouses for medical insurance because they cant afford to pay for them on their own, and they put away few if any dollars into any sort of retirement account. After working 2500 or more hours in a season and MAYBE netting $25,000 after taxes, few will take the time to realize that they put up with all the risk, stress and agravation to earn $ 10.00 bucks an hour. Hell, new hires start at that rate for me plus get overtime over forty and half paid health insurance after 6 months.

Nope to these guys life is good, cause they can set their own hours, work when they wanna, and almost have have a little change in their pocket from that lady they just cut. Then after 10 or 12 years when their a little older and the work a little harder to do on their own, they think they can sell out there business for a big wad of cash. LOLOL yeaaaaa right.

Can big money be made in this business? Yes, but only if the business is run as a business by a businessman, not someone who thinks hes escaped the old 9 to 5 to be his own boss and doesnt have to hear any **** from anyone. Instead of having 1 boss you end up with 20 40 or 80 different bosses that can all fire you anytime they want.

Best of luck

CMerrick

vardener
07-14-2003, 12:52 AM
I'd like to know what you do in Birmingham that pays 80k.

If you have any business sense, a good work ethic, and KNOW you can bring something to the business that no one else can, you have a good chance at eventually proving Green in Idaho wrong.

However, that doesn't mean that you wont initially struggle with living on such a reduced income.

I personally have no desire to join the rat race, maintaining lawns. I am blessed with a decent design sense and a desire to develop that into a unique talent for landscape design. I have the ability to offer my client a quality product, and I pair that with enough business sense that my client thinks they can't live without hiring me. Ok, maybe they can live, but their landscape won't be as nice ;)

I eventually want to seek an area that has a demand for a native nursery that offers organic lawn and garden products and design and installation services as well as organic garden maintenance.

There is increasing awareness and buzz about organic care, and I think I can climb into that market successfully. Even more if I can patent my own organic pest control products and fertilizers.

I'll grow my own, too. ;)

Uh, nursery stock that is...

If you have ever dabbled in this business, you have to know that it can be tough work, but at the end of the day, you know you have put in a good day's work. You can FEEL it.

I think I'd rather make $30 a year working for myself, basking in the sun, blisters on my hands, sore feet and all; than make $80 getting fat and pasty in an office chair and living the movie, "Office Space"

If you haven't played this game yet, I'd recommend getting your feet wet while you are still making that good money, also I recommend getting yourself outta debt and into savings before you take the leap. You can buy your equip on credit, if you have to. Call it a business expense and write it off. And whatever you do, don't burn bridges.

I'm getting my RN BEFORE I go full time with my business. With a wife that stays home with my two kids, I'm playing it like a game of chess.

Above all, Set Lawnsite as your homepage. Read it everyday, and DIGEST what these guys have to say. There are a few that you can afford to ignore, but most of them deserve your respect.

Good Luck.

lawnworker
09-04-2003, 03:53 PM
Yeah, but you gotta love it.

Greens #s are pretty close.

The truth is not many people get rich in lawn care.

Island Lawn
09-08-2003, 11:46 AM
Green in Idaho
If anything, you may be grossly optimistic!


Rustic Goat describes:
"Gets up in the morning, eats lemons peel and all, puts sharp rocks in his boots, has customers that are afraid to not hire him to do their work."

Admirable qualities.

I prefer sunflower seed hulls and fried shrimp tails!
Generally, anything that leaves splinters in my bleeding gums and tongue!

Green in Idaho
09-08-2003, 12:22 PM
Everybody loves an optomist.:D And I just wanna be loved.:blush:

dave80
09-09-2003, 01:22 AM
I was thinking about this thread when I was working today and I would like to offer my comments. Of course I am only 22 and most people laugh at me when I tell them how I am going to make it big, so take my advice with a grain of salt.

First of all, the title of the thread is "realistic income," and that is what Green in Idaho has provided you with. Being that he is an accountant and crunches numbers for a living, I am pretty sure that he has a handle on the information that he has provided.

If you are currently making 80k/year and are thinking about making the jump to lawn care, the only person that really decide if it is the right move is you. Maybe you hate your current job and are so fed up that you just want out, I don't really know. What I will tell you is this. If you are planning on going solo, as previously stated, all you are really doing is buying yourself a job (what the other guys said). You may say, but I can set my own hours and be my own boss, but the bottom line is that you still have to work for customers that will tell you what they want done to their property, and being that the nature of the business involves completing jobs during the day, you really only have a certain time frame in which to complete your work.

Now, having said that I will offer two examples:

One guy that I know owns several businesses in CA and owns 5 convenience stores in PA. His wife does the bookkeeping, and he has employees that do the management of the stores. You know what he spends his time doing? Looking for more businesses to buy. And I can guarantee you that he is making more money than any of his employees are, from both the profit that the business generates and from the equity that he is building (paying down principal on mortgage, etc.)

My grandmother also owns a business, except she grooms dogs. She has been in business for 30 years, all of which she has been the operator. She has someone come in and bathe the dogs, but she is the sole person responsible for the finished product. Recently she fell and broke her ankle in 3 places. Now she can only work half-days because it is too painful for her to work a full day, plus she has been missing days of work altogether when she went for surgery and when she has to go to the doctors. I know that she is my grandmother and I feel bad saying this, but all she really did was create a job for herself. Going solo can be risky business. There are just too many factors involved. What happens if you get hurt like she did and can't work. What happens if someone in your family gets a serious illness and you have to care for them. If you work for someone else, you get FMLA (usually) and can take time off up to 12 weeks, but you still hold your job. Try letting peoples yards go for even 2 weeks depending on the growing conditions and watch how many of them stick around.

The bottom line is this. You will never, ever, ever get ahead in life by simply trading your time for money. If you get into lawn care solo with plans of never expanding, you are essentially doing the same thing that you are doing at your current job, except you are trading your time for a lot less money.

This is why individuals make investments and businesses hire employees. Learn a simple principle called leveraging, and how it works. Then when you say....realistic income, where do i plan...the answer goes from something that you might find disappointing to "The sky is the limit."

McGuane's Landscaping
09-12-2003, 02:32 PM
Good point Dave. I am only 24 myself and looking to get into the bussiness. I don't see any money (or enough to make it worth the effort) in just going out and cutting lawns. The money is in running the bussiness , not pushing a mower for the next 20 years. I would rather run a bussiness that has 3 crews netting ME $20,000/year. (just an example) than going out and mowing and maybe netting $30,000/year. If I was going to do that I would be better off working for someone else(like you said) and at least getting my insurance paid for.

I've read it on here before. Duplication. You wouldn't wat to operate a dollar store. Not much money in that,right? But if you owned 10 of them,and they all netted some profit. I seen a thing on TV the other day and the corporation of those stores(one of them anyways.many variations) makes millions a year profit.

Just my thoughts. I like you know money can be made doing this.

swing blade
09-18-2003, 08:26 PM
Green In Idaho,

I would like to thank you for your honesty on the subject. I am a college student in Cincinnati, Ohio and am going to start a landscaping business this spring. I have done the work for a while now, and i have the technical info to do it. I am a business marketing/managment major in college and have also got my hands into a couple other business ventures. One is a t-shirt company where i pring shirts for car shows and schools. I am starting out as a part time operation with 2 other guys to help me. Even if others think your a but harsh, I appreciate the reality check. With all of those people saying "go for it" i almost feel like I am talking to a guidance counslerat school, there always just too damned happy. What you say is very true. With the costs of labor, gas, money set aside for equipment repairs, Liability insurance, materials like string and oil, and then the bills, phone, its enough to drive a person MAD. By the time one pays all of that out, there is hardly any money left for all of your efforts. I would like to ask you though, if I am averaging a gross of 1960 a week, what could one expect to truly see for an income. I am thinking it would be about 15% of that amount, but I wanted to ask your professional opinon on the matter. Also if the company is setup as a LLC or S-Corp does that self employment tax still effect you?

Thanks for all the great info, and keep it up

Milo

Green in Idaho
09-19-2003, 01:28 AM
Originally posted by swing blade
if I am averaging a gross of 1960 a week, what could one expect to truly see for an income. I am thinking it would be about 15% of that amount, but I wanted to ask your professional opinon on the matter. Also if the company is setup as a LLC or S-Corp does that self employment tax still effect you?

Thanks for all the great info, and keep it up

Milo

Swing, It sounds like you have a lot going for you. I would only add that for this winter to develop some market niche for your biz and r. the guys will be employees and that opens a huge box. Prob. got that covered from your other biz experience though, eh?

**********
15%--- depends on how much of the work you will doing. I also think it depends a lot on how much asset value you have.

15% is pretty much a good benchmark for someone managing a business with employees doing the work. IF you are the primary worker bee, you will get the 15% profit (ownership) plus the appropriate share for the labor component.

If someone showed me a p/l of a business that they just own and do little labor in it, I would say 15% is good. Even better if I looked at the balance sheet and it matched up up with a respected return on assets/investment/equity.

If a solo operator showed me a p/l with 15% for their personal compensation, I would figure their expenses are way too high for their production level.

*************

SE tax is a popular topic on here. A search here or at www.irs.gov will give you the details.

Effectively, LLC net is 100% subject to SE tax. S-Corp requires a reasonable wage compensation to the owners (you) which essentially hits the employment taxes (equal to SE) but some $ can be directed to owner as 'dividend' from the S-corp thereby circumventing SE tax. If a client expects HIGH $ I lean toward S-Corp. If lower income (less than 50K) I lean toward LLC.

Ohio??? maybe you ought to hook up with Mac another LCO and student extraordinaire.

swing blade
09-19-2003, 08:21 PM
Thanks for the info Green in Idaho.

I will be working about 50% of the work myself, but it will vary from time to time. The situation with employees is definatley complicated. with all the taxes, and workers comp, plus insurance to cover them and all the other legal stuff its brutal, but if you want to make a living in any business there is that point where you just cannot simply do everything yourself. I am already at that point because of my college class schedule. I am limited by it as to when I am able to work, and with a couple of employees I think I can make up for some of that lost time, the big question is, is it worth paying them to try and make the company more efficient, or would I be better to run solo and work when I can. I see what you were saying about the LLC vs. the S-Corp. I am leaning towards an LLC, and thanks for the tip on www.irs.gov I have read some of there info and its very helpful. As for MAC, who knows, maybe i will catch up with him.

Thanks again

Swing

Green in Idaho
09-19-2003, 08:59 PM
Well I can say from past first hand experience with college and a family and a working as a solo operator, I would NOT have wanted to be dealing with employees during the college time. Summer okay (like other students), but not spring or fall.
I took on employees first season after school along with large contracts.

Although, hey there's some whiz-banger teenagers doing it on here in high school.... guess I'm just a light-weight.:(

GreatBigTuna
09-29-2003, 01:17 AM
Hi Folks,

First of all, I've been lurking on these boards for a few days, and I must say that it seems like I've stumbled across a great source of knowledge and some good folks kind enough to share it. Thanks!

That being said, I'm not an experienced lawn-business man (yet ;) ) but I have had my share of success in the software business and the advice I am about to give really applies to any venture that you might decide to jump into.

Throughout this thread I have noticed a lot of references to "buying a job" and I couldn't agree more with the sentiment. The idea of getting away from the dulldrum of a 9 to 5 is certainly appealing, but I think that Green has hit the nail on the head with his rather sobering assesment of the financial reality of running a solo operation. This applies not only to the green industry, but across the business world as a whole. While there is certainly nothing wrong with "buying a job", in most cases you won't become financially independent by doing so (Unless you happen to buy a job as a plastic surgeon :D).

There is an excellent book by an author named Micheal Gerber called "The eMyth Revisted". You can get it at any bookstore. I would highly recommend that everyone in or contemplating going into business for themselves read it. It is a quick read, written very frankly without alot of fluff and with lots of practical and appropriate advice. I read it in a weekend during my "designated reading breaks" (as in sitting on the hopper :D) One of the primary topics that the author deals with is the notion of owning a business vs. buying a job. It really is eye opening and solidifies the point that Green is trying to get across.

Like I said, I'm not an expert in lawn care, but I am a good businessman and judging by his posts I'm guessing that Green is probably both. Take his advice, then read the book and I think that unless you love mowing lawns and are willing to make some serious lifestyle adjustments, you may want to reconsider how you are planning to approach "going out on your own". Just my 2 cents for what it's worth. I wish you luck regardless of how you decide to proceed. Thanks!

Green in Idaho
09-29-2003, 02:37 AM
2,595 views as of this date???

WOW!

A lot of people must be interested in a 'realistic income',....

And Suzzzal appears to be gone.... Guess he (she) didn't like the prospects of the green biz....



Suzzal???

Suzzal??

Suzzal?

...... Bueller?????
:cool::p

landcruiser
10-16-2003, 10:53 AM
22 year old "Dave80" is extremely wise for his age. I am not in the lawncare business but know a sensible comment when I see it.

landcruiser
10-16-2003, 10:59 AM
I am unemployed and want to get into lawncare for 2 reasons: I need a job and I absolutely love the outdoors and mowing grass. But, after reading many of these posts, I think I should get myself a job to obtain health insurance and do the mowing on the side. Heck, I thought I could make $30k/year easy mowing yards solo. I wasnt' going to target the small, residential yard. Just the larger residential ones and commercial properties. I say this simply because I have a good 72" Toro Groundsmaster that is completely paid for. I also have a tractor and 5' rotary cutter. I was thinking I could mow solo, find jobs that suited my equipment to keep me from having to buy other equipment and take cash as payment as often as possible. To me, all this sounded great but it appears it is only good as a 2nd income, not primary.