How to fail in the lawn business by someone who did it.

Discussion in 'Lawn Mowing' started by PROCUT1, Feb 18, 2009.

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  1. capnsac

    capnsac LawnSite Senior Member
    Posts: 702

    To be real honest I haven't had personal insurance for a while. I would use that as a business expense of course. So at $150/month, plus truck payment, gas, liabaility insurance, truck insurance, cell. That's it since I am solo, my equipment is paid for. Expenses for 30 lawns would be around $1150a month. Plus I pay myself a set amount each month, so I'd be taking around $3000 a month and putting it right back into the business. So for 7.5 months I'd have 22,500 in the bank, less taxes, about $17,800.

    I don't really want to put anything away quite yet for retirement being I am only 24. Once I get a little later in my 20's I will start thinking about it.
     
  2. mngrassguy

    mngrassguy LawnSite Silver Member
    Posts: 2,167

    Guys, I keep hearing this over and over, My equipment is paid for, so I don't have any equipment expense." WRONG. Do you really think your equipment is going to last forever? Every hour you put on that mower, it's worth less. Someday, you WILL have to replace it.

    Now, if your saying you don't have to pay any interest on your equipment, good for you. Your on the right track.

    BTW, Great thread Procut
     
  3. BSDeality

    BSDeality LawnSite Silver Member
    Posts: 2,850

    I have had a retirement account since I was 15 and working at the local golf course 10 years ago. Retirement accounts ONLY work if you contribute a steady amount, each year/month. The interest compounds over time. $100 today is worth $1000 in your retirement at your age.
     
  4. jlawnman

    jlawnman LawnSite Member
    from NC
    Posts: 171

    That only works if that thousand bucks at retirement is worth more than the 100 you put in today... :hammerhead:
     
  5. ALC-GregH

    ALC-GregH LawnSite Fanatic
    from PA
    Posts: 7,053

    I would rent in this case. If you buy, your now adding a debt that will need to be paid when the equipment is just sitting. Are you paying attention here? If you have work already lined up and you profits will make enough to pay for the equipment, then yes buy it, it will be paid for and you can rest easy knowing that you don't have that payment to worry about. If you buy it and only made 5K, where is the other 7K coming from? Your now having to cut that much more lawns to cover that debt. Your profit is out the window and you don't even realize it.
     
  6. BSDeality

    BSDeality LawnSite Silver Member
    Posts: 2,850

    you really think the economy isn't going to turn around in 40 years? :rolleyes: (the guy posting is 24 + 40 = 64 ~ retirement age.
     
  7. ALC-GregH

    ALC-GregH LawnSite Fanatic
    from PA
    Posts: 7,053

    WOW, I made it to the end of the thread. This should be permanently posted at the top of the forum. I'll be thinking twice about spending and I'll be reviewing my business plan again and crunch the numbers. Thanks Procut1 for your great words of wisdom.
     
  8. Trevors Lawn Care

    Trevors Lawn Care LawnSite Bronze Member
    Posts: 1,180

    He means inflation.
     
  9. capnsac

    capnsac LawnSite Senior Member
    Posts: 702

    That is part of my every day expenses so I am paying for it, just not in the exacerbated amount you are proclaiming it to be. For every hour my machines run they MAKE $50, gas labor and wear and tear included in that figure. So in essence, a $10,000 machine will pay for itself in 200 hours. The other costs are minor in comparison to the initial purchase.

    I hang on to my equipment till around 1,000 hours and then sell it for a good amount because it is still a very good piece of equipment. The machines will hold out for that long without any major repairs either, so cost to own and upkeep is minimal at best. I might lose a depreciated amount on that machine, but no where in there is the cost to run those machines even close to the cost of buying one. Also, I use that money from the previous purchase to buy another machine, so it is a domino effect once you buy one. Then, once it is paid off, I am saying it doesn't cost me anything for a good reason.
     
    Last edited: Feb 24, 2009
  10. mngrassguy

    mngrassguy LawnSite Silver Member
    Posts: 2,167

    Wow, $50/hour after expenses? I bet most guys on here only wish they could see that much PROFIT.

    You sell your equipment for (almost) what you pay for new? I wish I could do that good. Going rate for used stuff around here is like 25% these days and that's only if it's well taken care of.
     
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