Are My Estimates Correct?

Discussion in 'Lawn Mowing' started by precisionlawn, Jan 8, 2003.

  1. precisionlawn

    precisionlawn LawnSite Senior Member
    Posts: 254

    Im starting in the business this year. Ive done landscaping for the past two seasons for another company, and ive been reading up and studying it ever since, so I have a basic knowledge of it....I think?
    I want to start with 50 accounts (give or take). But lets figure 50.
    Doing just a basic mow, trim, edge, and blow business.
    In my area the least amount charged for this service is $25.
    So I figured $25x50 accounts = $1250 gross profit/week.
    Minus expenses, which I figured about to be about 25%, because i will operating this business myself. Which I think is possible, right? So 25% of the $1250 leaves me with $937.50/net profit/week.
    Are my calculations correct and do you agree that 50 accounts can be handled by one person per week (10 accounts/day, small to medium sized yards)?
    Also any other input would be greatly appreciated.
    Thank You
     
  2. bubble boy

    bubble boy LawnSite Bronze Member
    Posts: 1,020

    run your numbers with at least 40% as the expense amount. then add 10% for fudging.
     
  3. FrankenScagMachines

    FrankenScagMachines LawnSite Platinum Member
    from IN
    Posts: 4,739

    I'm kinda wondering the same thing myself. I want to grow this spring with about 15 hours of work a week, and I know I can do 7,000 sq. ft. lawn mowed, trimmed and blowed in just under 15 minutes by myself, and if I plan the travel time just right, that is maybe 3 per hour, at $25/each, that will be $75/hr. That means 45/week at 7,000 sq. ft. each, $25 each, 15 minutes each, that is $1125/week. I'm thinking $15-20/hr should cover costs pretty well? That seems like alot of accounts, and it is, but when you add up the time involved it sounds ok to me. I know at times I will need to plan for alot more time, like for spring growth and leaf season. I will possibly have help for the leaves though, and I might just do around 10 hrs a week and leave the other 5 hrs open to one timers and an account I have that is just during the spring, but takes an hour. Oh yea, I'm a sophomore (HS) so this is just a part time gig after school and Saturdays if need be.
    Comments???? something you see wrong with this?
    Thanks,
    Eric
     
  4. bubble boy

    bubble boy LawnSite Bronze Member
    Posts: 1,020

    Bush, are you planning on the exmark? will be tough to make payments with only a couple days worth of work. unless you are buying outright.

    maybe for a couple days a 21"will be more suitable.

    youre young, you can make a LB work.
     
  5. grassworks

    grassworks LawnSite Member
    Posts: 134

    don't forget to take out about %30 from that net profit for uncle Sam. -- and unless your route is real tight (unlikely for first year) you can expect to need 55 or more hours to sevice those 50 customers per week.(doesnt allow much for rain or equipment servicing ) ......scale it back to 40
     
  6. Acorn

    Acorn LawnSite Member
    Posts: 110

    you guys starting out remind me of me when I started. Y(ou want it to work out so bad that you choose to ignore costs that are either planned and unexpected. A lot of start up costs that you won't get back for a while. Also what happens if you need a new transmission or have some other unexpected major breakdown. Do you already have the 50 accounts because if you don't... don't expect them to fall in you lap the first year unless you are undercutting everyone. Don't forget about advertizing costs. If you do that in this competitive low margin business, you won't last very long. The people who have made it around here started out small (1 used old truck, 1 mower, 1 trimmer) and a spouse that makes all the money at a real job. It's that way until the business is off the ground after 5+ years and possibly the spouse can quit the job that supported the family.

    This isn't really a problem if mam and dad are still paying all the bills and you don't have a mortgage and 3 kids to feed.
     
  7. turfman59

    turfman59 LawnSite Senior Member
    Posts: 801

    what are you calculating for your overhead recovery cost's? all that equipment has to be replaced someday, first you must know what your cost of doing business is. The phone on the wall isnt free and if your legitimate insurances, licenses, ect,ect, then develop a price for mowing
     
  8. bubble boy

    bubble boy LawnSite Bronze Member
    Posts: 1,020

    did you do a breakdown of your costs or is 25% a guesstimate?

    as others have said it adds up quick. the expenses portion of any LCO's income st. would be a real eye opener to one not in the know...
     
  9. Garth Sweet

    Garth Sweet LawnSite Member
    Posts: 16

    All above are good points to remember. Looking back there are a few accounts that I should have walked away from. If they need you right now or after you finish this next job, I have always gotten burned by these situations. Don't come down on your prices. The first time you do they will always expect it. Dont give anything away for no charge. Every thing you do has some value to it. Keep your equipment looking in top shape. And finally get good uniforms, we use golf shirts that are embroidered. They make a great impression.
    Good luck
     
  10. greenman

    greenman LawnSite Addict
    Posts: 1,405

    Dont expect it to happen in the second or possibly third year either. Not the regular, good keeper accounts.
     

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