Just Starting Out

Discussion in 'General Industry Discussions' started by DoornbosOutdoorServices, Jan 30, 2011.

  1. DoornbosOutdoorServices

    DoornbosOutdoorServices LawnSite Member
    Posts: 32

    I have some questions regarding my business plan. I am just starting out in Northern Michigan (Traverse City area) and I want to start out the right way so I am writing a business plan. I see on most plans that there are projections for the upcoming months / years as far as cost / profit. I don’t have any numbers to go off as most of my past jobs have been for family and friends and I didn’t keep track (wish I would have now) When you guys wrote your first plan how did you do it? Any thoughts or suggestions would be greatly appreciated.
     
  2. BrunoT

    BrunoT LawnSite Senior Member
    Posts: 741

    Business Plan...

    1. Step one: Move out of Michigan. There are probably more lawn guys there than lawns with occupants still in the homes. :laugh:
     
  3. Roger

    Roger LawnSite Fanatic
    Posts: 5,916

    This is a major problem for people just starting out. I've seen so many posts on LS responding to questions of new owners about pricing, "... know your costs, and build in profit when you set your pricing." That does not work for a new owner because there is no history on expenses.

    Now, to be sure, one can make estimates. Those of us who have been in the business for 15 years have some good history. Those just starting out have zero history.

    My suggestion is to work out a plan, and find a mentor, somebody who can be trusted, somebody who is not a competitor, and somebody who can be objective. No, they are not going to know what your costs will be, but may give you some guidance on things to consider, costs associated with some expense line items, etc.

    Financial management is the biggest reason why a business fails early, including lawn services business. From so many posts on LS, it is clear that many folks in their early stages have not yet addressed their financial management issues (e.g. how do you make an invoice -- a sign that most likely expenses and income is not being tracked). Far too many people start out their lawn service business as an equipment operator, not as a business owner. They are more interested in straight stripes than knowing the financial well-being of their company.

    Just my $0.02 (speaking of finances)...
     
  4. Tyner Lawn Service

    Tyner Lawn Service LawnSite Senior Member
    Posts: 328

    LOL Step two: Don't move to Nebraska. There are the same amount of lawn guys here already.:laugh:
     
  5. Tyner Lawn Service

    Tyner Lawn Service LawnSite Senior Member
    Posts: 328

    By the way do you ever go to the enduro snowmobile races in Traverse City? Would like to make it up to the Soo 500 someday.
     
  6. SouthernRoots_Lawn&Garden

    SouthernRoots_Lawn&Garden LawnSite Member
    Posts: 92

    i had the same problem as you and i figured mine out half decent, price all your equipment (i.e. truck,trailer,handhelds,mower, etc...) then determine how long you plan on keeping it. so lets say for the sake of even numbers you have 24k in equipment and decide to keep it for 2 years thats 1k a month in expenses. so basically this is how it would appear

    1st year- 12k expenses, 10k grossed= -2k (in the whole)
    2nd year- 14k expenses, 30k grossed= +16k (profit)
    3rd year- (new equipment) 15k, 40k grossed= +25k (profit)

    you more or less want to show what you anticipate for expenses and realistically what you think you'll take in each year and how you plan to expand. anyone feel free to correct me but thats how i went about it.
     
  7. XLS

    XLS LawnSite Silver Member
    Posts: 2,038

    with a small LCO its easy to set it up for a 1 year pay off base your cost at 550hours on your mowers hour meter ,when you work enough to log 550 hours its paid for . if its alot of debt 1000 hours will lower you ecpected per hour rate . Equipment will last 1000-1200 hours if based on your mower time. So at 1000 hours a $ 6,000.00 mower and $ 800.00 in 2 cycle equipment would be $6.80 per hour cost ,6.80 replacement . so $13.60 an hour for 1 setup would be recovered in 500 hours of mower opperation. Add labor, transportation cost(truck ,trailer) and office cost( morgage,utilities ) and profit and your get the idea of a minimum cost.
     
  8. DoornbosOutdoorServices

    DoornbosOutdoorServices LawnSite Member
    Posts: 32

    Thanks for all of the info guys, it has been a big help. Tyner Lawn Service the races here are pritty cool, the I 500 in the soo is pritty amazing it is a must see. The guys that race up there are nuts its fast and loud and a good party when the race is over:drinkup:
     
  9. rhyan6

    rhyan6 LawnSite Member
    Posts: 90

    you need to pick what sets you aside from the competition in your area and market that there is plenty of work out there. Dont be the lowballer but everybody has there profit margins its why we all shop around with everything we buy so why shouldn't are customers do the same. You are a one man show so you can be more competitive than a bigger guy. Just dont way underbid looks bad. Quality work and word of mouth with carry you far. good luck
     
  10. Brothersllc

    Brothersllc LawnSite Member
    Posts: 17

    All i can say man is stick with it i ben in buisness going on two years now and the first year was realy bad we had a few good weeks during the summer but other than that definantly no profite we guna keep faith and hope for better this year like every one says though the first year is the hardest so i think if you can get past that first year you guna get it a big problem were having is getting apartment contracts and such there a big part of a lawn care buisness you need big contracts they help so far though i have no luck just a bunch of residents good luck man
     

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