Help me understand.

Discussion in 'Starting a Lawn Care Business' started by coolluv, Jan 17, 2011.

  1. coolluv

    coolluv LawnSite Gold Member
    from Atlanta
    Posts: 3,528

    Lets say you had a regular job and were plugging along and all of a sudden you get the pink slip so you decide to start a landscaping business like the million or so around my area. Now before you started this business while you were still employed you owned a truck and a mower(say a lawn tractor) and a trimmer and edger, you know to take care of your own property.

    Well you go out and buy a trailer, a small one and you start throwing baggies with rocks in them and a business card inside and you pick up a few lawns. Lets say over the period of 1 month you pick up 10 $35 lawns. 5 of those are bi weekly and the other 5 are weekly. So for 5 of the weekly lawns you make $175 a week and the other bi weekly lawns you make $87.50 for a total of $262.50 a week.

    Now since you already owned all of the equipment except for the trailer, lets say you picked up a used 10ft trailer for $500. So you have $500 invested in a trailer and say $100 in business cards and plastic baggies, so you have $600 total invested right?

    So at $262.50 a week you already paid for everything and your off making money. $262.50 x 4 = $1050.00 Not bad right? Your already $450 ahead of the game right?

    If your in this situation or a similar situation you have no overhead and are on the road to financial success right?

    Just thought I would throw this out there for opinions. Is my math and figuring correct?

    Dave...
     
  2. RodneyK

    RodneyK LawnSite Senior Member
    Posts: 749

    If $1,000 a week is considered success then I guess so. What are you missing? Well insurance for one thing...and don't forget uncle sam will want his cut. Those are two things out of many. Hopefully others will chim in...
     
  3. Lefet

    Lefet LawnSite Bronze Member
    Posts: 1,887

    There are alot of things that aren't mentioned here to give an honest opinion. Age for instance. How long do you see yourself doing this? Where do you live? Home with mom & dad or do you have a mortgage? Family? Children? Insurance like Rodney said, not only for the business but what about you? Retirement?
    Wayyyyyyyyyy too many variables.

    And did you take gas and maintenance out of your weekly alotment
     
  4. White Gardens

    White Gardens LawnSite Fanatic
    Posts: 6,776

    That's the trappings of this biz. You can start up will little or no input costs.

    It's when you start to grow after a couple of years that you over-head starts to rise to meet the demands.

    But like stated above, you need to consider insurance, taxes, fuel costs, repair costs, maintenance costs, etc...
     
  5. gasracer

    gasracer LawnSite Bronze Member
    Posts: 1,049

    First thing you will replace is the lawn tractor,then a bigger trailer and more(better) equipment. Insurance,overhead,You can't get by with just handing out business cards.The list goes on.
    Used ZTR $4,000
    New weedeater $300
    New blower $300
    New trailer $1,200
    Insurance $800 a year.
    gas,blades,oil,filters $400 a month
     
  6. coolluv

    coolluv LawnSite Gold Member
    from Atlanta
    Posts: 3,528

    Well since I owned everything except the trailer, do I count the other stuff as business expenses? The truck is worth around $25 grand and the mower I paid $1800 for about 5 years ago and the trimmer and edger I paid about $500 for a few years ago.

    Does that stuff count as overhead costs or do I not even add those costs since I already had those?

    Dave...
     
  7. White Gardens

    White Gardens LawnSite Fanatic
    Posts: 6,776

    No, because you already own them. The only way you could ride it off as an expense now is if you formed a corporation of sorts and then sold them to the corporation.

    With the truck and trailer you can ride off the expenses either in mileage or maintenance costs. Or you can do a corporation and lease/sell them to the corporation.

    Really though, you should talk to an accountant to get everything in order so you are taking full and correct advantage of your situation.
     
  8. gasracer

    gasracer LawnSite Bronze Member
    Posts: 1,049

    Just a guess here but if you already owned it then you can't count it as a business expense now. You can sale it to yourself but they gets complicated.If you use the truck for personal use you can only count mileage. That's where having a CPA comes in. They cost you about $50-$80 a hour.
     
  9. coolluv

    coolluv LawnSite Gold Member
    from Atlanta
    Posts: 3,528

    I use the truck for 75% business and 25% personal same with the mower and trimmers and stuff.

    Dave...
     
  10. Lefet

    Lefet LawnSite Bronze Member
    Posts: 1,887

    Can you loan me one of those? Going rate around here is $150.00/hr
     

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