How is this done?

[dmk395]

I run a small op (fulltime college), but still maintain 35 accounts a week. I think I am doing quite well considering my circumstance, but how are all these guys I see driving around in $35000 trucks 6000 ride on mowers? I know there is money in this business, but seriously it boggles my mind when i see companies with $75000 just in vehicles. Anyone else feel this way, or is this the norm?

[machine]

It's called Depreciation. The more depreciation expenses the less you pay in taxes.

[awm]

Ive seen so many try to start at the top.
2 0 to 30 thousand in equipment and no where
to mow.Ive always felt sorry for them.
Now im waiting on one thats got a ztr
for say, take over payments.Ive been offered
that deal before but wasnt in market.
I have about decided its scag,exmark or
dixie chopper.

[thelawnguy]

Good economy=easy credit. Their day will come.

[LoneStarLawn]

So whoever has expensive trucks well crash on their faces? I always see it as "They must be doing something right"..First how do you know its a $35,000 truck..they may have less options on it than you think. I have a 2000 Ford-150 and partner has Ford-250.

[Edited by LoneStarLawn on 10-31-2000 at 03:49 AM]

[thelawnguy]

The truck dealers here are full of current year and 1 year old trucks either repo'ed or turned in cuz the big jobs they were supposed to get with that shiny new SD never appeared. And the tax and insurance bill ends up doubling the payment. Sure some make it, usually those who are moving up. Its the ones who jump in with a startup nut to crack of 75k who are destined to fail.

[LoneStarLawn]

Thats almost a no-brainer..I'm sure the guys with the expensive trucks have been in the business for awhile..

[eslawns]

If you have 35 per week and charge $30 each, you make $1050 every week. Why can't you afford a truck and rider with that? I figure a third off the top to reinvest in the biz. $310 a week can buy a nice ride. Just my $.02

[HOMER]

The lease plan I have on my 2000 Dodge Cummings is all about TAX RELIEF! Keep going and one day you'll see the light. I might as well use the money I make or I'll give it to somebody that doesn't work!

Homer

[landscaper3]

Our company has more into our equipment then we paid 5 years ago for our 2 acre 40plus foot ranch home, Boy when I think of that Im now getting depressed LOL. We do alot of service all year round and 7 years of plowing and lawn service has found out one major thing, your only as reliable as your equipment is. Like the old saying goes you got to spend money to make money. And machine kinda has a point there about depreciation, you see all our equipment is on paper as leases which entitle us to 100% of our payments are tax deductable as in the case of general loans you may claim 1/3 of that on your tax returns. We found you get more bang for your buck with Agrilculture leases do to your return. And the good thing with these leases are when they are up all you pay them is $100.00 and all paper work and equipment is now your to own.

[jaclawn]

I have been around for a good while, and see many of these new flashy rigs on the road in April. These startups feel that they are going to take over the trade, getting as much work as they can.

Many will undercut price just to get the work, they have to, they have large monthly payments to make. Come this time of year, Many are nowhere to be found. Their customers are calling on long time established contractors that cannot touch the price that the new guy was charging. It essentially screws up the market for everyone.

Some of the fancy new rigs will not survive the winter, the owners did not store away enough nuts to last the winter. I even saw one of these new fancy landscape dump trucks out delivering pizza.

Some will make it to the second year. If they can survive the second and third year, they will probally make it.

Just remember, this hot economy will not last forever. Many of your current customers may turn to taking care of their own lawn if dollars become tight. Put some money aside for these times. This is when your competitors may go under, and there are often good deals to be had on some like new equipment.

[eggy]

They are starting a buisness! Lawn care is one of the cheapest to get into even if you use 75,000 to start that is still super cheap for a buisness! How many buger king franchises can you get for 75,000? I am sure thay dont look at making a profit for a few years, And have planned not to.I guess if it took 75,000 for everyone to get into it I am sure there would be a lot people doing it. Sooner or later the market will be so flooded we will have to pay to cut a lawn! Well just my two cents, and its probably not worth that!

[eslawns]

I read somewhere that McDonald's will set you up with a restaurant, send you to a manager's school in Wisconsin for 6 months, do demographic studies to determine the best location for you, and something like 2/3 of the franchises are over 1 mil profit in the first year. Don't know if it's true, not that it matters, you need $250K, and I haven't cut that much grass yet. :) If I can find the article online, I'll post the URL. Anyone ever look into this?

[jcoat]

They're either "Big hat, no cattle," or really smart businessmen... you can look @ it both ways. If I were to emulate, I'd look @ ELM. He has some older equipment, BUT it's all maintained real well and he knows his stuff!! Those are the guys who will make the big bucks in the long run while continuing their successful businesses.

[Lazer]

Heck my 2 new Fords cost almost $100,000 with plows, etc.

Granted, they're not paid for, but our other 11 are.

The key to $ is productivity. Every operator that makes good money and has vehicles/equipment like that is always a very productive operation, with no downtime and smooth, effecicient, profitable operation day after day.

[Runner]

Hey Lazer, where abouts in Michigan are you? I'm in Flint.

[Greenkeepers]

The only way to make money in any business is to make smart sound business decisions. In this business Image means a lot. You have to look professional and act professional in order to get respected like a professional. Any one can go out and cut grass but it takes a person with a busines sense and industry knowledge to be a professional.

Go ahead and beat me up on this guys. My philosophy is that you have to spend money in order to make money. Plus we deserve to ride in nice vehicles for busting our buts all day.

Someone mentioned depreciation earlier. Depreciation is a non cash expense. That means that you don't actually pay for it but it decreases your net income. Vehicle depreciation is based on a "luxury Vehicle" that is that it's valued over 2?,000 (don't remember exactly) then you have to depreciate specific amounts over the life of the vehicle. year 1= 1750 (I think) year 2 = ??? and year 3,4,5,6,7 equal 3250.

True the more you buy the more depreciation expense you have but it all isn't cut and dry. You can really change your bottom line easily with depreciation. (trust me I'm also an accountant).

Mike
Greenkeepers