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Chisolm Trail Landscape
12-17-2004, 10:26 AM
Okay, here is our question? What what would we need to gross if our expenses are around 3500 a year to NET 60K? This is of course just expenses, not taking out taxes.

Thanks for any input here!!

ztoro
12-17-2004, 10:33 AM
Okay, here is our question? What what would we need to gross if our expenses are around 3500 a year to NET 60K? This is of course just expenses, not taking out taxes.

Thanks for any input here!!


YOu need to Gross 60K a year and your expense are 3,500 a year? ;)

Chisolm Trail Landscape
12-17-2004, 10:44 AM
No, we would like to NET 60K a year and right now we are just estimating our expenses to be around 3500. Does this sound far fetched or something? Like I said though, this is expenses and not taking out taxes yet.

cutnedge
12-17-2004, 11:09 AM
Your expenses seem awfully low. If you worked 42 weeks/year, they would only be about $83/week. I promise you, you will exceed this expense estimate.

out4now
12-17-2004, 11:15 AM
Expenses seem really low to get that much.

Chisolm Trail Landscape
12-17-2004, 11:19 AM
Hmmm.....Okay, then can you maybe tell us what we would be looking at as for expenses? Or what most of you solo op's average in expenses?

Thanks

Norm Al
12-17-2004, 11:21 AM
..........$63500.00

ztoro
12-17-2004, 11:25 AM
..........$63500.00

hehehe......

Ecobjs
12-17-2004, 11:27 AM
I found starting out that doing a budget with every category you could think of was the best way to estimate expenses. The library will have plenty of examples. Some of the categories we used (this has changed several times over the years) Was Rent, computers, equipment purchases (line trimmers, mowers, blowers, etc.) Equipment maint. (filters, oil, belts, blades, etc.), state and local taxes (call your local office to find these out), business lic., insurances, office exp (paper, pens, postage stamps, etc.) I quess my point is to think of everything so you don;t get hit on the back in.

I hope this is what your looking for!! I will be happy to provide more detail.

Chisolm Trail Landscape
12-17-2004, 11:36 AM
Thanks Ecobjs! I guess maybe our question is kind of redundant since not everyone will have the same expenses based on if they have new financed equipment or older equipment, plus taxes and insurance are so much different in other states. Maybe this was a dumb question to ask!!!!

Norm Al
12-17-2004, 11:50 AM
actually chisolm your question is dumb,,,,reread it,,,,,the answer is $63500.00

Chisolm Trail Landscape
12-17-2004, 11:58 AM
Well thanks Norm! Maybe you should read the posts about this being a MERRY season and not bash someone for asking a question that maybe wasn't phrased quite right!!!! More then anything, we would like to know what kind of expenses a solo op would/could take on the first year in business? A total amount in expenses?

Thanks

ztoro
12-17-2004, 12:08 PM
Gas would be a huge factor.. How many lawns you cut, how big are the lawns, how often do you cut, how far do you drive, how much trimming....

Its so different for so many.....

I think you can figure out the Insurance, oil changes, blades, advertising,phone bills. as for gas it could be a lot or a little depending on how much you cut..

Norm Al
12-17-2004, 12:14 PM
i didnt mean to be rude chisolm if it came across rudely,,,,,but if your going to be a business man,,,,asking the right questions of any support you need will be very important!

you said your expenses will be 3500.00 you already know your expenses!

take that out and ask how much you will need to make to net 60,000.00 per year!

labor 33%
fuel 10%
depreciation 16%
office 2%

most lawn guys forget depreciation and wonder why when the equipment is wore out why they dont have the money to purchase new stuff when needed!

muddstopper
12-17-2004, 12:18 PM
Okay, here is our question? What what would we need to gross if our expenses are around 3500 a year to NET 60K? This is of course just expenses, not taking out taxes.

Thanks for any input here!!

This is just a suggestion and might/should work. Try doing a balance sheet by using profitablilty ratios to fill in the missing numbers. You will have do a little research to find industry numbers which should be expressed as ratios. You could then use your $60gross and work backward thru the math to achieve the numbers you are looking for. I dont know if you will be able to find any industry specific number for lawn care so maybe you can just ask here for numbers and drawup your own adverages. This should get you in the ball park as far as actuall $$$ altho wont tell you if you will be able to reach those Dollars.

Chisolm Trail Landscape
12-17-2004, 12:22 PM
Okay Norm!! Apology accepted.....:) Yes, it was a question that maybe we just didn't phrase right to begin with.....thanks so much everyone for your input!!! It will for sure help us get a better idea of things.

Norm Al
12-17-2004, 12:36 PM
its all good chisolm,,,,,,,its a long race,,,,the human race that is!

muddstopper
12-17-2004, 01:05 PM
Since Norm supplied a few numbers, here is how my suggestion would work.
Gross=60000 $60000
labor 33% =33% of 60k or $19800
fuel 10%= 10% of 60k or $ 6000
depreciation 16% of 60k or $ 9600
office 2% of 60k or $ 1200

Total= $96600 in revenues or sales
taxes would be figured after deductions and on the total of 60K

muddstopper
12-17-2004, 01:12 PM
Uh oh, before someone challeges my math, I know this isnt exactly right and is only meant to serve as an example to show how he could figure sales.

out4now
12-17-2004, 01:17 PM
Thanks Ecobjs! I guess maybe our question is kind of redundant since not everyone will have the same expenses based on if they have new financed equipment or older equipment, plus taxes and insurance are so much different in other states. Maybe this was a dumb question to ask!!!!

Not a dumb question, just needed to be a bit more specific. Unasked questions are the dumb ones, how else you going to find out, trial and error? You'd be out of business. Total Costs are Fixed costs + variable costs. Do you have employees, need work comp. insurance figured in, gas,trimmer line, oil, blades,office expenses, phone, advertising ,etc, etc. You get the idea. Go with the balnce sheet idea and maybe a statement of cash flows as well so you can see where the money is actually going. There are some accounting sites on the web with Java applets that allow you to plug in all the info you have and it will give back all the ratios at the click of a button. Good luck. :waving:

rodfather
12-17-2004, 03:09 PM
Since Norm supplied a few numbers, here is how my suggestion would work.
Gross=60000 $60000
labor 33% =33% of 60k or $19800
fuel 10%= 10% of 60k or $ 6000
depreciation 16% of 60k or $ 9600
office 2% of 60k or $ 1200

Total= $96600 in revenues or sales
taxes would be figured after deductions and on the total of 60K


I'd say that is pretty close. But I would bump it up to around 110K myself.

ce2000
12-17-2004, 06:57 PM
I have just completed my fifth year in this business. The first year was the most difficult. A lot of expenses and not as many customers. This year my business expenses were approximately 35% of my gross. This includes replacing worn out equipment, blades, maintenance, insurance, etc. This does not include income taxes. Be sure to keep good records, you will need to keep good records to itemize your expenses. Good Luck. It is not easy, but you can do it if you want it bad enough.

ce2000

The world of achievement has always belonged to the optimist.

-- J. Harold Wilkins

Grassboy 101
12-18-2004, 09:57 AM
Maybe I misread the questioin,but the way it was stated appears to be an elementary school math question. If you know your expenses are $35,000 and you wish to net $60,000 you must gross $95,000. I know this will not give breakdowns for various expenses vs profit for the line item. Again, I think it was a very simple question. If you want to net $60,000 (after expenses other than taxes) simply combine your expenses with the wanted net income.

Precision
12-18-2004, 08:00 PM
by my not so complete numbers this year, I grossed almost $80k

I paid myself $18k
I bought out someone else for $10k
I bought tons of new equipment
I have business debt of $13k

I reinvested as much as I could in the business this year so the future would be better.

I could have paid myself +/- $30k If I wanted to increase debt load or wait on or cheap out on equipment. My theory is buy gooos stuff and pay once.

YardPro
12-18-2004, 08:28 PM
wow 18K out of 80K
you should have financed the equipment and paid yourself more. The equipment can be depreciated

oldturf
12-18-2004, 08:32 PM
It is my experiance that in order to net $60,000.00, considering all expenses, my insurance expenses are about what you have stated as expenses, including employees and equipment and maintance and taxes. I need to gross around $180,000.00 in order to net that amount. This is just my experiance in the "real" world.

redoak77
12-18-2004, 11:00 PM
if you are going to gross 60k, you willl spend 83.00 a week on gas.

Flex-Deck
12-19-2004, 09:51 PM
Here is my expense chart
1. Liability Ins - 600/yr
2. Truck-Car Ins - 1900/yr
3. Mowing Equip Ins. - 600/yr
4. Health Ins. - 9000/yr.
5. House Pmts - 9500/yr
6. Utilities - food - 13000/yr
7. Car-House Ins - 1400/yr
8. Truck depreciation - 2500/yr
9. Equip Depreciation - 2300/yr
10. Maintainance - Fuel etc. - 4000/yr.
11. miscellaneous - 4000/yr.
Total just to maintain the operation, and eat, and sleep in a warm environment = 50,000/year.
12. Profit - ? What ever we can gross over the 50,000 mentioned above.

This is just a rough budget, but it includes fixed and variable costs, and I break all these numbers down to per hr. costs based on 400 - 600 - 800 hrs per year per mower. Thanks, Brad

SpudsM15
12-19-2004, 10:17 PM
This is what my books look like for this season 2nd season...
46%expenses
14%labor
23%banked
17%pay to me

My first season
85.5% expenses
13.5% pay to me
Had very little to none in the bank account in january!

Next season I hope the numbers to look like this
40% expenses
20% labor
23% bank
17% pay to me

YardPro
12-20-2004, 10:51 AM
hey flex.
you're putting your personal expenses in with the business. you should not comingle funds to figure business profit.

Precision
12-20-2004, 11:25 AM
yes yard pro, I could have financed more, but that puts me in a more leveraged position. Which makes life more difficult if something happens. I had the luxury on not needing to pay myself so much this year to be able to pay my personal bills.

My business my choice. Next year I will reap the rewards.

I could have doubled my pay this year but chose not too. Next year I will double my pay and my business should double as well.

year 1 is always the toughest and I chose to err on the side of conservative financial planning.

YardPro
12-20-2004, 11:39 AM
i am not bashing, i just would have not spent operating capitol on equipment. i know how hard it is to make it through the winter and then startup in the spring. It took me almost 10K every spring to startup.

the reason i was suprised is becuase out of 80 K you spent over 50 K on the business.
80K
18k to yourself+10K on a buy out.
that's 28K out of 80 and you are still 13K in Debt???
sounds like you spent 65K this year.

Chisolm Trail Landscape
12-20-2004, 11:44 AM
Precision,

You grossed 80K your first year in business? That is awesome!!! We hope to make half that the first year! What is the average gross income/sales for most of you that first year starting out?