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  #1  
Old 11-06-2012, 11:36 AM
ag2112 ag2112 is offline
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Join Date: Mar 2012
Location: St. Louis MO
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First Year in Business - How did I do/help me with some ?s moving forward

Hey Guys!

Love reading all the advice on here - I have a few questions about my business and I know there are a lot of guys on here that have been around a while so obviously you're doing it right and I would like some advice.

This was my first year in business and I managed to get a total of 28 res. customers. Most of them are awesome, I have them on a schedule and have made good strides so looking forward to some WOM advertising! About 20 of them are that way, then I have 8 who are kind of a pain, they get upset if I come weekly, they call at random times, I was wondering If I should dump them or keep them, to me money as money his year. Overall I grossed approx 13,000 as a part time solo op.

Equipment: Toro Time 30' cut, Billy Goat 34', Husky BT150 BP Blower, Stihl FS90.

How did I do?

For next year I have a few larger contracts coming, one is a 8 acre area bid at 9K for the season and the other is a little larger about 15 acres bid at 15k for the season. They are both easy flat land, mow blow go and I have my eyes on a 60' ztr to take care of them. I work with my brother so it would be a two man crew on these.

Here are my questions:
Upgrading my small trailer and equipment - I am going to sell my mowers and get a 60' ztr and a WB, probably 36-48 inch - have some gates so prob get one to fit through those. Trailer wise would you guys suggest a 10', 12' or 14'? Which trailer would hold the ZTR, a WB and a 21"?

In terms of the larger accounts I bid based on time and acreage, I figured 3 acres/hour on the ZTR and my overhead costs, which are bascally nothing except for the trailer and ztr I will be buying. Everything else is the same as this past season, would there be anything else to take into consideration that I'm missing?

I know that there will be guys that say I'm overreaching, but I don't think I am. I have the time to put forward, and in my opinion I need to start getting more income if I really want to start expanding, which is why I don't really care if I'm not making a ton this next season, as long as I am getting my name out there and bringing in more funds to keep upgrading, this is not going to be a full time en devour yet, although I would like to build up to it.

Next question is should I st up as an LLC, currently a SP DBA?

Final question is should I set up a payroll for my brother and myself? How exactly does one pay themselves? I am worried I will be double taxed, can someone help me with that? I'll be meeting with my CPA but wondering if anyone here has some insight.

Thanks!
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  #2  
Old 11-06-2012, 01:50 PM
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LandFakers LandFakers is online now
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At 13k you did pretty good. My first year I did 12k at 20 accts. 14ft trailer would be ideal, always go bigger than you currently need. You definitely need to upgrade your equipment, especially if you have 2 big accounts at 8 and 15 acres, you would be crawling with 2 30" mowers. You should be able to do 3 acres an hour with a 60, so you bid correctly there. With a 60" and a smaller WB that will be run by your worker(brother) you should be able to do both those big properties in one day. It would be a 10 hour day but it's possible, so I don't think you would be over-reached as long as you have that amount of time. Sounds like you got it mostly figured out. Good luck
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Old 11-06-2012, 02:07 PM
larryinalabama larryinalabama is offline
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Are you fellers accounts small?
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Old 11-06-2012, 02:30 PM
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I know mine are, if you were even talking to me. Haha
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  #5  
Old 11-06-2012, 02:37 PM
larryinalabama larryinalabama is offline
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Quote:
Originally Posted by LandFakers View Post
I know mine are, if you were even talking to me. Haha
I saw 20 accounts and thought you fellers were kicking butt, I have 16, but they are all big.

Keep up the good work, its likley you will double in accounts next year.
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  #6  
Old 11-06-2012, 05:12 PM
ag2112 ag2112 is offline
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Quote:
Originally Posted by larryinalabama View Post
Are you fellers accounts small?
I am in a suburban area so all of my accounts are pretty much 1/4 acre. My biggest account right now is almost 1/2 acre but for the most part I'm just keeping up with the competition at 30-35/lawn. That's fine by me since it takes myself alone <30mins and when I'm with my brother probably 20 max.
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  #7  
Old 11-06-2012, 05:28 PM
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jrs.landscaping jrs.landscaping is online now
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If you are a DBA you cannot collect a check, the net profits are considered your "earnings" and the amount you are taxed on. If your brother is a partner and not an employee the same applies. If you do become an LLC and wish to recieve a check, just know that you will be taxed twice on the same money. On a side note if your brother is your partner you should consider working on your own, partnerships and working with family are two things that rarely work out. When you mix the two, chances are even greater for arguments IMHO.
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Old 11-06-2012, 05:35 PM
ag2112 ag2112 is offline
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Quote:
Originally Posted by jrs.landscaping View Post
If you are a DBA you cannot collect a check, the net profits are considered your "earnings" and the amount you are taxed on. If your brother is a partner and not an employee the same applies. If you do become an LLC and wish to recieve a check, just know that you will be taxed twice on the same money. On a side note if your brother is your partner you should consider working on your own, partnerships and working with family are two things that rarely work out. When you mix the two, chances are even greater for arguments IMHO.
Thanks for the info/opinion! So far it's been ok but I can see where you would say that...

If you were a LLC is there anyway around getting double taxed? How could you pay yourself without a paycheck?
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Old 11-06-2012, 05:54 PM
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jrs.landscaping jrs.landscaping is online now
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The company will have a tax burden on you and your brother as "employees." You will have Unemployment, W/C, and a host of other things for the business to pay into. So if you figure a wage of $10 for yourself, tack on another $3-4 in company payments on top of your check. Just for an example the company match for our foreman is close to what you gross a year, and he doesn't make 6 figures. Start small, get insurance, roll money into the business. Like I said if your brother is an employee you should be paying taxes on his check, I would talk to the CPA before making any major choices and see what he has to say about them.
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  #10  
Old 11-06-2012, 06:12 PM
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jsslawncare jsslawncare is offline
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Hire an accountant in your town.
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All equipment is wore out. <- Never mind. All equipment has been repainted and with new decals. It's like I have new mower's again!
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