Business question?

Discussion in 'Business Operations' started by RHK, Nov 15, 2006.

  1. RHK

    RHK LawnSite Member
    Posts: 10

    Good-evening, are there any ramifications if I buy the equipment first before the business license, business name and everything else I need to do? The local shop is having an open house in Dec, and the sales rep said that the equipment manufacturers will be on hand. Maybe a good deal or deals might be had at this time, who knows. Or should I wait till after the first of the year to purchase the equipment and get my business in the right order? Any help or suggestions would be great! (I will be paying cash for equipment) maybe that will help?
  2. mattfromNY

    mattfromNY LawnSite Bronze Member
    Posts: 1,581

    I was told before I started (May '06) that the equipment I already had could still be written off, etc. because I am a sole proprietor. In other words, what's mine is the companies, and what belongs to the company belongs to me, good bad or indifferent. It may be different for a LLC, Corp., etc.
  3. Fantasy Lawns

    Fantasy Lawns LawnSite Bronze Member
    Posts: 1,913

    There is no need to hurry .... these open house happen every 3-4 months thru out the dealers ...good deals are too be found thou ...just went to one month ago n got 20 gal of 2 cycle under $200 ... edger blades we're at 50 for $25 500 blades at 1/2 price ... couple weed eaters at like 30% off

    As far as mowers go advice if you are just starting is to buy a used mower & trailer good shape of coarse but save some $$ to figure if this is really what you wish to do ... can it be done n even then you'll get a better feel of what your 1st mower purchase should be

    Either way ..... I wish you the best of luck .... lots of work over in T town ... but more than likely you won't really get any monthly work tell March/April

    But push clean ups, trimming n mulch n try to turn them into cutting accounts next spring

    Oh n as far as business or tax related issues consult your CPA ...n if you don't have one this should be one of your first ==>" MUST DO'S"
  4. topsites

    topsites LawnSite Fanatic
    Posts: 21,653

    I agree with buying the mower used because there are many different models and deck sizes and controls, I bought 3 used ones before I found one I really liked, then when I bought the new one I got the same model as the last used one (which I really liked LOL), so the research paid off but also:

    Experience can only be gained by operating the machines. Unfortunately, mowers will land in the concrete ditch and hit steel pipes and roots and crap a lot more during the first 1-2 years than later: I found it calmed my nerves to have 4 years under my belt when I bought my first new mower, for I had the experience to avoid many of the pitfall-style accidents that plagued me when I was new, nevermind the initial cost really helped to have the money than be bothered with payments. Last but not least, I wasn't nearly as burdened financially in my 4th year so the new mower came easier, I think that expense could've busted my business in the 1st year.

    On the note of the trailer IF you can find a good used one at a decent price then by all means, but around here it is hard to do that. While mowers come and go trailers don't, and the price stays high if only for that reason.

    Either way, best of luck.
    ohhhh, and no I don't think it really matters whether you buy equip / get license in any specific order.

    SDNCLAWNCARE LawnSite Member
    Posts: 232

    I bought a used 36" WB and a beater of a truck to start next year. Plan on saving some money to upgrade. I plan on starting slow at first.
  6. rodfather

    rodfather LawnSite Fanatic
    Posts: 9,501

    how do you know what equipment you need?
  7. RHK

    RHK LawnSite Member
    Posts: 10

    Everybody thanks for the comments and suggestions! The money I have, has been saved so the payments are not an issue. I'm also starting this business a year out from me retiring so it will be a learning curve before going full time. I know there are good deals for used mowers but I just can't get past possibly getting someone else's problems or issue's, that's why I going to buy new (warranties). Knowing which mower to buy I have talked to alot of LCO's about there mowers and have gone to shop's to actually look and test drive their products, so I think I have a good idea what I need. Thanks again for the comments!

    SDNCLAWNCARE LawnSite Member
    Posts: 232

    Buy Used Equipment and let the business pay for your new equipment down the road. Good Luck
  9. Josh.S

    Josh.S LawnSite Bronze Member
    Posts: 1,085

    Even if you have the cash, I would STRONGLY suggest buying used equipment, most of the time it in the business world (not limited to lawncare, but every business) the owner will take at least 18-36 months before he can draw salary, and I think that is probably accurate for lawncare also.. assuming you are going to start a business right with good equipment...

    Ok look, there is a guy on this forum selling a stander for $4500, it cost OVER $6000 new, it has around 50 hours on it... that means for every hour that machine is on it has lost $30 in depreciation (1500/50).... that is a hell of a lot of money to lose... so you can SAVE $30 for every hour that mower was on if you were going to buy it, or you can BLOW that money and buy a new mower....

    That same guy I bought a used dixie chopper of off.... with 650 hours on it, to make numbers even say it cost $10,000 (which its around there) and I bought it for $6200, that means that machine lost $3800 in depreciation, which is close to $6 in depreciation for every hour that machine is on....

    Even if you have the money, I would still suggest buying used equipment.. in good condition.... it would be the most ideal to get a well cared for commercial mower with low hours, owned by a homeowner, and I think you can save a TON of money without sacrificing the dependability of that machine....

    As for warrenty's go, as long as you take care of your equipment, I would worry about it, because in the first 2 years of your business you won't probably put enough hours on it to cause any serious breakdowns anyhow...

    also you can write of equipment that you have owned before the business started...

    Well sorry for the ramble... there my $.03....

  10. VO Landscape Design

    VO Landscape Design LawnSite Senior Member
    Posts: 358

    If I heard my Accountant right for Sole Prop. if you have assets-computer, office furniture-equipment-- you start the depreciation of the items on the day you start the business but you need the receipt so you can show the cost. Don't quote me. Check with your Accountant first.

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