Budgeting 2006 + Changing from past methods

Discussion in 'Lawn Mowing' started by BSDeality, Jan 18, 2006.

  1. BSDeality

    BSDeality LawnSite Silver Member
    Posts: 2,850

    Previously I ran my business by the seat of my pants (mostly). This season I sat down to budget. I opened up Excel and started putting in my expenses, parts, supplies, etc. I must say the end result was a little bit of a shock.

    I expect the older/experienced LCO's on here have a budget, how many of the guys with less than 3 years experience have never really written one out?

    Things I plan to do different this year:
    *Every maintenance item will be purchased by 03/15/06 (typical season kick-off is 4/1). I used to only purchase supplies on an as-needed basis, however this costs more when you buy less at once, plus increases truck + down time.
    *All oil/filters/plugs/grease will be purchased in bulk. The oil will be purchased in 1gallon/5gallon jugs. Again, unnecessary increased costs because I didn't plan in advance.
    *Blades: again, purchasing pre-season to avoid unecessary $. I'm a small setup, 12 blades will be plenty for me, and just enough to qualify for some $avings.
    *2-stroke oil: buying in 5gal mixers saves big $ + time.

    I also budgeted diesel fuel@ $2.759, equipment fuel@$2.499. I really hope diesel takes a big dive, as its the second largest item on the budget right now based on my 20K miles I drive.

    What else can I do to save some cash? What other planning can save me time in the long run?
  2. Jpocket

    Jpocket LawnSite Silver Member
    Posts: 2,278

    Very good idea, something I need to do, but haven't gotten that far in my business yet
  3. MysticLandscape

    MysticLandscape LawnSite Bronze Member
    Posts: 1,020

    Thats a good idea, how about getting a commerial account at a local nursery, ive got one and i save a few $$ on every purchase compared to what someone who walks of the street pays.
  4. lawnprosteveo

    lawnprosteveo LawnSite Bronze Member
    from Tulsa
    Posts: 1,930

    I did this last winter. Budgeted everything. Came in pretty close to real expenses. It has helped me make certain decisions on stuff...like whether to buy certain equipment, hire people...used to I would just haul-off and buy whatever I thought I needed..which changed all the time.
    Planning and looking back on what all your costs are is the only way to go.
    Try looking at the total cost of any employees you have. Wages, payroll taxes, workers comp, meals/drinks if you provide them...then compare how many yards they contribute. In other words, how many yard or gross income do I get because of these workers. Then compare that gross income figure to what they cost you.
    I did this and decided to go solo.....payup
  5. redoak77

    redoak77 LawnSite Senior Member
    Posts: 291

    i know this has been disscussed on here before, but you cant get a tax break on ur as if you are just using it for ur mowerspayup
  6. MacLawnCo

    MacLawnCo LawnSite Bronze Member
    Posts: 1,847

    without a budget, how do you know your costs and ultimately realize a profit? You cant. Congrats BS, you are taking a very important first step.
  7. MysticLandscape

    MysticLandscape LawnSite Bronze Member
    Posts: 1,020

    I just took an accounting class the year in highschool to keep accounting records for a small business (mine). I now plan on keeping a detailed record of my expenses and sales this year and using it to make adjustments to increase income and minimize my expenses.
  8. AL Inc

    AL Inc LawnSite Bronze Member
    Posts: 1,218

    That's a good start, BSD. Another good idea was what lawnprosteve said about knowing the true costs of your employees. That is something I still have to work on. I'm sure you added up everything else, like insurance, telephone, mailbox, etc?
    I usually do a big parts order over the winter, things I know I will use, just like you did. I have a steel storage cabinet in my storage container that is packed with just maintenance parts, grease, and two cycle. My guys know where to grab things when they need them.
    Things change completely when you have employees, then it becomes a constant challenge to cut labor $...A few things that I did were have one man come in early to do the maintenance on the machines. I bought him a cordless impact gun with a 15/16" socket so he can change blades easily. He was happy with the extra hours in his check, and it saved me quite a few man hours. They were out on the road faster in the morning.
    Good thread, would like to hear what other ideas you guys have.
  9. BSDeality

    BSDeality LawnSite Silver Member
    Posts: 2,850

    I am employee-less at the moment. I am thinking of possibly hiring PT this season to take care of some stuff for me, it all depends if i can find the right person to trust on their own.

    I included phones, rent, insurance (truck, health, liability).

    Some things i just thought of, stamps, memberships (professional, Chamber of Commerce, networking group)
  10. tiedeman

    tiedeman LawnSite Fanatic
    from earth
    Posts: 8,745

    I agree, when I first started out I didn't have a budget and basically I just ran by the seat of my pants. It was a while before I realized that I really needed to budget to see what I could and should afford during the year

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