View Single Post
  #22  
Old 11-30-2012, 08:04 AM
shovelracer shovelracer is offline
LawnSite Silver Member
 
Join Date: Sep 2004
Location: North Jersey
Posts: 2,009
Quote:
Originally Posted by RScapes View Post
Thanks Shovelracer for opening my eyes. 30k revenue is more than I calculated/anticipated.
There are always things to consider.

For a lot of guys equipment recovery is one. A lot of small or under the radar guys will say, well I paid cash and all my equipment is paid for so I can charge less. The way I see it they have tied up valuable operating cash and not charging for recovery is foolish because in 5 years the replacement will have to come from somewhere.

Another is all the other items you fail to think about at first. With no business you can be driving around getting 35 MPG in a Civic. Now you need a truck, even if it is a 4 cylinder compact. All of a sudden you are down to 10-15 MPG, are replacing brakes, tires, balljoints, etc every 2 years. Your vehicle expense winds up being several thousand a year when likely you just planned on fuel and oil. This is just an example.

I'm talking about running a legit business. Now a lot of guys will think they will just fly under the radar, and honestly being small it is entirely possible. With a small operation though going legal is very minimal, and the costs would be very low. The thing is you need to stay the size you intend to because there is a pretty large jump to the level of contractor from retired lawn service. A few guys have talked about hiring help as needed. Right there alone you have opened up yourself and your business to major liability issues. Workers comp is a big issues in most states. It does not take much to crush a finger, damage a foot, or much worse. Realistically you could probably run a legal very small operation for somewhere around 3-5% more than the same operation under the table. Not worth losing your house over such a small amount.

With any business you will have a road ahead of you. Likely even with intended revenue figures your first season at least you will make very little profit. You will have a lot of startup and recovery costs that first season so your tax return will likely show a loss, but that is not necessarily a bad thing.

A wise man told me once. If you want to be profitable in the lawn business you need to be either very small and lean or very large and lean. The key here is to avoid mid sized operations. These guys running around with 3 crews may be making some money, but the hours they require and the headaches they have are far worse than a solo guy grossing 50K or a leading outfit grossing 10 million.
Reply With Quote
 
Page generated in 0.03974 seconds with 7 queries