Approximate yearly income?

Discussion in 'Starting a Lawn Care Business' started by DirtRider, Oct 10, 2005.

  1. DirtRider

    DirtRider LawnSite Member
    Posts: 42

    I have some experience working in the field with a company many years ago. I also do a very small amount of side work now. Is there a formula that will give me a rough estimate of what I can expect to earn by, say, each account?Then I can then just multiply by the amount of accounts I would need to make what I require? I understand this would be a VERY rough estimate.

    I am checking into an insurance estimate right now. I have a truck and trailer, a 21, backpack, and a weed eater. I know this would get me started, but I will need much more equipment down the road. My plan would be to buy as much of the equipment now with my current job before I made the plunge. I am thinking about starting this on the side until I had a substantial amount of business and then dropping my day job.

    I am growing very tired of corporate America :angry: I know this venture would be anything but easy, but I can handle the manual work, but need to get out of what I am currently doing for a living. I would like to hear from some Cali guys to get an apples to apples idea but there does not appear to be many on this board?? Thanks in advance guys! I will have more questions down the road.
     
  2. GreenUtah

    GreenUtah LawnSite Senior Member
    from SLC, UT
    Posts: 866

    Dirt,
    There is no possible way to peg any set price to any number of lawns to make even a ballpark estimate on final #'s. Every single lawn is different and how much you make per lawn will depend on how far it was from your last stop, the time it takes with a variety of environmental factors and the equipment you have available when you do the job, your or your employees speed and skill, trash and about a hundred other variables, for each property. You can have a profit goal that sets your pricing, but that's about as close as you're going to get.
     
  3. PMLAWN

    PMLAWN LawnSite Gold Member
    Posts: 3,535

    "I am growing very tired of corporate America"

    Yes as Green said it is very hard to say.
    What do you need to live on. What do you do now and what do you not like about corp. America
    Live as an LOC has as many hassles as any other job.
    Not trying to be mean but if you have to ask how much you can make you are going backwards.
    First how much do you need to live.
    Next how much will it cost to run you business.
    Things to think about-
    Direct costs- Labor, labor tax, materials, gas, oil, tires, repairs, equipment.
    Indirect costs- depreciation, insurance, trucks, auto insurance, truck repairs, truck registration, shop tools,
    Administrative costs that most don't think about.- accounting, advertising, time to sell and cost out jobs, computers, dues, education, interest, office supplies, rent or storage space, utilities.
    How much do you pay yourself. And last but most important is how much profit does you business want. Add it all up and you will know how many hours of work you need to sell to make the right amount of money.

    You will hear this a lot on this site--"I can charge less because my stuff is paid for" or "I work out of the house so I don't have to worry about rent or storage"
    Most of the people making any money in this are Incorporated so, so much for leaving corp. America
    This is a business and the business must pay for all things used in it and all time spent to run it. Trying to do it any other way will put you out or make it hard to make anything to live on.
    You only have a 21" mower, so you will spend a lot of your first money on equipment. Don't plan on making any money till you got equipment to work with. And than plan on making little for a few years till you get a good customer base.
    You can work like a dog for 80+ hours a week like many here do and still make less than 40K a year or you can start the business right- with a business plan - and plan to use workers. Grow a real business with labor and systems and than multiply it over and over to make real money.
    Not sure what you do now but if you have little or no business training, go to school and take a few business classes.
    Good luck
     
  4. Az Gardener

    Az Gardener LawnSite Gold Member
    Posts: 3,899

    Well said PMLawn. What did you do in your previous life? How is business after 2 years? What would you do differently?
     
  5. Varsity L&G

    Varsity L&G LawnSite Senior Member
    Posts: 418

    This is the best POST I think I have read on this site. Sums it all up better then all the others put together.
     
  6. PMLAWN

    PMLAWN LawnSite Gold Member
    Posts: 3,535

    "previous life" Ahh- not past or future or even present , BUT one.
    Always look at the big picture. Never stop one thing just to start another but look to grow each and use resources of all to create a life of fun and excitement. And always stay in school!!! Never stop learning!!

    I was born in Chicago (jump ahead) At age 13 I took dads 21" mower and tied it to the back of my bike, (with the handle tied tight under the seat so it rode on the back tires only) put a broom on the mower and started to cut grass with a friend. The profit margins were great till Dad said I had to buy my own gas. Than they were just really-really good.
    Anyway, out of high school (during which time I had the mandatory job at a fast food restaurant) went to body and fender school and started to paint cars. next year went to community collage for business and marketing.
    Than to Denver to go to school for auto and truck repair.
    Worked as a mechanic for 2 years and left a job-Had a brand new truck with 48 payments- Sitting at a red light thinking that I needed to make money to pay for this thing. Looked at a home improvement store and they had a help wanted sign so I stooped in. "Yes I can do sales"
    For 15 years I worked with this company doing Sales, project management, ran the service dept.,and we started a factory to build doors and storm shutters. Many hours of sales training and business courses.
    The owner, which is now a very close friend) had a friend that was involved in Real Estate. Got a license and started to sell that also. This was pre 86, (tax laws changed big time in 86 for you young guys) and we were doing apt. buyouts and condo conversions. This all worked well together as Home improvement and real estate runs side by side.
    Wife has her CPA and was in accounting. When she got her MBA it was with a real estate basis. This put her into a Facilities Management company. (more on that later) One of her jobs was to look into new computer programs for contact management. During that year long process she found she liked the computer field and made the jump
    Lotus was a big part of her work and they have a huge conference down in Disney each winter. We would drive down in the motorhome and stay in the campground while she went to the conference and play with Micky at night. 80* temps compared to 0* in Chicago. Why go back. Well my Uncle lives in Charlotte on Lake Norman and we stopped on the way home one year and never left. Now live in Mooresville NC. This was in 96. My wife was doing a lot of travel and the kids were 5 and 6 so I started to play mister mom. Did side jobs and some handyman work to fill the time. Closed the corp. in Chicago and sold some real estate and started over down here. Got the RE license in NC and started to find homes to rent and flip.
    They have a great Community Collage close by and started to do the contractors course. Also joined a Real estate Investors Association that has a wealth of training available.
    Got a little side tract ed when a Nascar Busch team asked if I could pull a showcar. The owner of the team know that I had sales experience and wanted someone that knew cars and could tow and could sell the team.
    Talk about dream job. Drive around the country with a race car. Go to tool shows as the car was sponsored by Channel Lock. Talk to people about tools , cars and racing, and get PAID too. Did that for about 2 years till the sponsor went elsewhere.
    Anyways- we had a few rentals, still doing side jobs, had built my deck and pond around our house and there was little left to do at home when my wife lost her job, Company just decided to not do that type of work anymore.
    She went out on her own and really started to make good money (pre 9-11)
    The schools around here were in bad shape because of the growth and we wanted to do some travel so we pulled the kids out and rented out the house, jumped into the motor home and drove around the country for two years. Great fun and learned a lot. I homeschooled the kids as we traveled and my wife worked as a consultant from "home" or on site (which we could follow her to). This worked till the computer and tech stuff crashed and the money was no longer any good. At this time we were in Texas in a State Park, working as Campground Hosts. Worked at restoring some historic buildings and built a few displays for a Nature Center. Also put time in helping with grounds maintenance. This is when the landscape maintenance light was re lit. Money was getting tight so we went home and when the tenant moved out we moved back in. The kids were now older so I had a lot more time to work. I started to advertise what I did a little more and bought a mower to add some other service to the plate. Worked a lot with Real Estate agents to help with listings both in building service and landscape.For about 2 years did it myself and with a helper. 3rd year i got 2 more trucks and started crews out just doing maintenance. As a side note since we moved to NC I have been working part time as a sales rep for a company that sells printing equipment.
    The time pressure was getting heavy. My wife went back to Facilities Management and had to work out side of the home. I started to run thin on time and I believe that I started to put off some of the business day to day stuff.
    If I had to do it over again I would grow much slower and get the right people in place to run day to day opers. I had to drop a route and retool a little but will be fine in the end.
    But each business that I own has to pay its own way. Each house has got to stand on its own as far a profits. And your business has got to do the same. Tools are only payed for by the business. All time put into the business has got to be bought by the business.
    No rob Peter to pay Paul.
    The other lesson ( if there is one) is to #1 communicate. My wifes new job is in direct result of keeping in touch with the old one and its people. The job also gives my company resources and leads, (I can not get any direct business because of conflict of interest but I stay abreast of thinks going on in commercial real estate)

    #2 is to network as the more people you know and the more people that know you and what you do the better life will be.

    #3 is to keep learning at all times Always move forward in know age and increase what it is you can do. People make investments in stocks and real estate for the future but will never go back to school. Learning is an investment in your mind.
    Buy business books and sales tapes and read and listen.
    Never defend what your doing now as the only right way or best way but always be open to learning new ways

    Build you business to run on auto pilot so it will make you money and you can go on to something else and grow.Why??
    The main corp. that we have has 3 DBAs
    One is of course the landscape and building thing and it makes money
    Another is a consulting business that my wife still does for the computer stuff. It can bring in a few thousand for a weekends worth of work and the people that she worked for will still call for updates and training.
    The 3rd is one that deals with our travels and writing about them. While this is very little income it is a stream and can be grown.
    Always look at the big picture and where to go next.

    Sorry for the Very long post but it is raining again so you will have to suffer with me. Hope this helps to chart your course.
     
  7. DirtRider

    DirtRider LawnSite Member
    Posts: 42

    Wow!! Great stuff PM!! You sound like a very educated well balanced man. I am sure I will look for more info from you in the future.

    First of all, I am not sure that this is the route that I want to take. But, whenever I grow tired of what I do, this is the first thing I think of because of the experience that I have in the field and I enjoy doing it. I do realize that in order for it to be successful, I will need to work hard, probably long hours, and it will be a company. You know what though, it will be MY company. That is the difference! I am tired of working my ass off, deadlines, reports, managing people every day just to make someone else's company grow larger and more profitable. What do I get out of it; just a stinking paycheck and a lousy $500 bonus at the end of the year. Now I am not trying to play the oh poor me card here, I am sure there are many people that have it far worse than I do, it is just that I am tired of what I do and would like a change. I am a middle management employee making $40,000 a year. The only thing I will miss are my 4 weeks of vacation.

    I am looking at options. "If" I were to start a business in this field, my intention would not be to be a solo operator. I would plan on having a crew working for me. I know the headaches of managing people, but like I said, if it is my company it will be far more rewarding than doing it for "corporate America". I will reap the benefits or the losses.

    I have a long way to go before I reach a decision. I need to understand how to structure a contract, devise a business plan, learn a lot more about fert., aeration, pruning, design, and many other aspects of the job. Bottom line is I am just starting to do my homework. I think this site will be an invaluable resource. I need to learn more about the business end of this as well as the horticulture end of it. I may end up taking some courses at the community college first. If I chose to go this route I would guess that I am a year or two away from making the plunge.

    PS, I have lurked on here on and off for a little while and I though I read about a rough formula for figuring income. Maybe it was something else. I though it sounded rough, but of course, with a wife and a mortgage, income is my first priority and concern. I need to make close to what I make now. I realize that is probably not going to happen in the first couple of years, but if it took me two years I could probably handle that.

    Thank you for your help and bear with me on my endeavor, as I am sure to have many questions.
     
  8. GreenUtah

    GreenUtah LawnSite Senior Member
    from SLC, UT
    Posts: 866

    Making what you do now is not farfetched. It's dependent on your market conditions there in Chico vs. the investment you want to put in, coupled with your efficiency and sales skills. Some companies make 40% profits, some make 10%, what determines where you will fall, is those things mentioned above. I would say that the business studies with a heavy lean toward the marketing side, would be a very wise use of your time. I think many people can learn the hort side as they go more effectively, since there are so many variations and you always have time to go find an answer. The business side, you better know the answer first or be ready to throw money at problems to make them go away. Best of luck.
     
  9. DirtRider

    DirtRider LawnSite Member
    Posts: 42

    Thanks, Green. I appreciate the input.

    One thing that is bothering me is how to start out. Keep my day job and work my ass off after work 5 or 6 days a week accruing all of the accounts I can until I am close to my income now, then quiting my day job? Or, by out someones accounts and quit my day job? Speaking of which, when you buy out someones accounts, how do you know they will stay with you? Do you have them all sign a new contract with you before the deal is done?
     
  10. GreenUtah

    GreenUtah LawnSite Senior Member
    from SLC, UT
    Posts: 866

    ahhh..now you're opening a whole new can of worms, existing cos buyout. There are many factors you would need to consider when buying out someone else's biz, in fact, too many to list here, but when thinking of buying someone elses biz, the first thing you need to consider is if you are buying a problematic, unprofitable business or if there is value and potential there. The only way I think you'd be able to truly determine that is if you already knew the business and your market. There are a slew of ways to start up, doing everything yourself is just one. Perhaps you're strong at sales and marketing, you could sell accounts and sub them all until you are ready to take the jump. Franchises are out there as well, although they rarely come with a customer load built in. Maybe you start off with gardeing services, very popular in most parts of CA, hire a knowledgeable leader and begin with pulling weeds, planting flowers and trimming shrubs, a minimal outlay for equipment and an underserved market in most cases. There are hundreds of ways to begin, it's mostly a matter of your situation and timing.
     

Share This Page