Bussiness Plan

Discussion in 'Starting a Lawn Care Business' started by burntcookie, Oct 13, 2006.

  1. burntcookie

    burntcookie LawnSite Member
    Posts: 15

    Hi there, I am wanting to get a mini excavator in the spring, and I was wondering if I could get some help with a business plan to take to the bank. I have spent countless hours searching for a plan suited for this "adventure" for a model. I have some general ideas on how to proceed, but I was hoping that someone might have one they would be willing to share so I might get a better idea. My first year goal is to get a mini, a 1 ton 4x4 and a snow plow and a trailer, 2-3 year - a skid steer and maybe an employee or two. Retirement in 5!! (joking). Any help would help out alot, and greatly appreciated(?). Thanks - Jason:canadaflag:
     
  2. topsites

    topsites LawnSite Fanatic
    Posts: 21,654

    There are several things I can tell you from my own research into the subject, as I recently also got excited about the future acquisition of a small loader / backhoe and possibly some other things.

    Much like yourself, I may upgrade in the future but plan to start small, and am finding it would be best to get a decent but used piece of equipment until such time I have the customer base to justify the purchase of a larger or newer machine.

    Fact is, I will still be grass cutting big time, the loader will be used mainly for the odd brush clearing job and also some excavating, possibly spreading topsoil.

    The problem is weight vs. horsepower vs. lift capacity: The smaller the machine, the less it can do... And if it's powerful enough, now it weighs so much that it is incapable of doing a 'fine' job without tearing up the yard considerably. With more and more high class customers (not saying they are rich, just they want their yard looking nice), it is imperative to first do a good job and second do it with the least amount of rebuilding involved, as this reduces their cost while I can still make a decent profit.
    After looking and using a dingo, I am convinced this 800 lb. bucket is not only too small, but not powerful enough at all, it does get stuck trying to lift or push even smaller piles and by that time it consumes so much fuel and time, it's just not worth it. Furthermore, the bucket hardly holds a wheelbarrow's worth of stuff, and with its slow crawling speed, I can literally work faster with a pitchfork and wheelbarrow than by using the dingo, nevermind the cost difference.

    Thus, I then checked into compact tractors, and found the brands of Hinomoto, Yanmar, and Shibaura to be highly interesting. For one, the weight of the machine is just light enough to still fit on my single axle trailer, while the power of a 22-25hp motor brings the lift capacity up to 1,300 pounds, at least 50% more than the dingo, and the bucket is larger and it can go pretty fast as well.

    Alas, the next problem begins with the attachments... A nice, used compact tractor runs around 6 thousand dollars, but each attachment (such as a bucket) can run another thousand (plus installation), thus the trick now lies in finding a used compact tractor that already has the attachment(s) I need.

    As for a business plan, the best I can tell you is approach it the way I went about buying the Ztr:
    First, save the money you need to buy it outright.
    That is what I will be working on for the next however long it takes, likely 2-3 years, maybe less, maybe longer, I don't know.
    Then, go to the dealer who has your machine of choice, and apply for a 0% interest loan, either you get it, or you don't. If you don't get it, I would consider it unwise to spend all of the saved money, but would advise saving more until you have at least what the machine costs PLUS next winter's money saved, then you are ready to buy it any which way you want.

    That's how I do it.
     
  3. djsp24

    djsp24 LawnSite Member
    Posts: 34

    I too am starting an lco this coming spring and I can tell you a business plan is the BEST starting point. I read/write business plans everyday and they are extremely indepth. The SBA has a great link to writing a business plan at www.sba.gov also you can check out wwww.bplans.com I do have a template i could email you (its kind of like a fill in the blank I made for my customers) also, If you need assistance or want someone to critque your bplan, feel free to contact me and I can assist you. I would NOT reccomend getting a sba backed loan to start with, an LCO just isnt borrowing enough money to justify, but the govt does have some great local loans from pref lenders in all 50 states and I can help you find these! Also, did you know uncle sam has grant programs and subsidies for new business owners? The key to success in forming any business is have good debt, and that can be achieved by writing a successful business plan and acquire the financing that way. Also, I would NOT reccomend buying business plan pro or any other software like that, the banks spot it a mile away and do NOT approve of that format, so you'll only be wasting your money. To qualify for loans, grants and subsidies, all lenders are looking for your business plan to have 7 sections AND in a specific order.... see below

    1) Executive Summary
    2) Products & Services
    3) Market
    4) Facility & Location
    5) Sales Strategy
    6) Management Summary
    7) financial projection 3 years min.

    hope this helps, I kinda disagree with Topsites just a little bit, why save the money first and then try to finance it? That doesn't make sense to me, but if it works. Go for it. I would find out all my cost and over head and then establish my procong and then figure out what I would need to do to afford what I wanted and figure out the break even point first and then see if its doable. Your business plan will TELL YOU if you can afford to buy a ztr your first year or not! Hope this helps!
     
  4. ed2hess

    ed2hess LawnSite Fanatic
    Posts: 13,140

    I see people renting equipment in our area......that way you can get the correct machine for each job...big/little as needed. I wouldn't tie up money until the business is large enough to support purchase. How many hours would you anticipate using the machine a week?
     
  5. PMLAWN

    PMLAWN LawnSite Gold Member
    Posts: 3,535

    Nobody can "GIVE" you a plan.
    A plan needs input from your area, The # of customers that need your service. The current providers of that service and proof of the need of more providers. The total cost of running your business, including overhead, equipment, your income and eventual profit
    And proof that you will run the business, have the customers, and make the money to be able to pay them back.
    Any finance person will want to see a goal of customers, income, profits, and does not want to hear about goals of "getting" a lot of equipment
    Plan for money, when the money is there, than you can shop for tools.
    That is what a plan will PROVE.
    Easy way to get money is to prove you do not need it:laugh:
     
  6. burntcookie

    burntcookie LawnSite Member
    Posts: 15

    Thank you for the input so far. I wasn't looking for someone to "give" me a plan, I have in my head what I need. I just need an idea to help me get it on paper (a safer medium, lol, not to mention easier to understand).
     
  7. LindblomRJ

    LindblomRJ LawnSite Silver Member
    Posts: 2,570

    Write down your thoughts then organize them.

    The business plan will tell what, why, and how. Those are the main areas that need to be addressed. Then you need to be able to support these points.
     

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