Looking for some answers!

Discussion in 'Starting a Lawn Care Business' started by velocicaur, Jul 31, 2005.

  1. velocicaur

    velocicaur LawnSite Member
    Posts: 38

    Hey Guys,

    I have not purchased any equipment or anything yet, just in the brainstorm process. I'm currently looking for employment (wrong time of year) in order to get some quality experience before I really put some time into this. However, everytime I run some numbers, I'm pretty depressed in what I come out with, maybe I'm missing something.

    Example, say after a few years I am able to do 55 mowing jobs per week at an average of 30/cut (Off of 25/yard, but some larger). This leaves me with 1650 gross per week. Working that out on a 30 week basis, due to the winter months, that leaves me with 49500 for the year.

    Expenses:
    Business Insurance - Looks to be approx. 700/year from some of the other threads
    Gas - 10 miles/job - 55 *10 * 30 = 16500 miles / 12 mpg = 1375 gallons @ 2.5 = 3437.50 gas for the truck. Estimating 4500 with the extra machines.
    Advertisement - 300/year (estimate)
    Truck Insurance - 1500/year (I'm 20, insurance isn't cheap)
    Maintenance - 1000/yr
    ETC - 1000/yr
    Total - 9000

    That leaves me with about 40000 and that's assuming I have everything paid for when I start. A descent 3/4 ton truck + mower + etc (after a few years) is going to be about an extra 5500/yr (450/mo), which leaves me with 35000.
    I still need health insurance etc.

    Now, I realize that I can, and will, plow during the winter and I still need to figure out how much exactly I get for that, but we get approximately 75 inches/year.

    Is this basic plan reasonable considering I just whipped this up, calculator in hand? I'm not exactly sure on how taxes work and how the deductions work for small businesses, which should work in my favor.

    :help:

    Thanks,
    Matt
     
  2. out4now

    out4now LawnSite Bronze Member
    from AZ
    Posts: 1,796

    What size jobs are they? Your price seems low. Are you going off the dollar min. formula?
     
  3. velocicaur

    velocicaur LawnSite Member
    Posts: 38

    Well, I seen 25-30 dollars come up more than any other number, so thats what I used to be conservative.

    Average 25 - 41250
    Average 30 - 49500
    Average 35 - 57750
    Average 40 - 66000

    All based on 55 lawns for 30 weeks. Obviously, the extra 5 dollars ends up being about 8000 dollars, which helps out quite a bit. I just wasn't sure which would be an accurate number to use.

    Thanks again,
    Matt
     
  4. Tn Lawn Man

    Tn Lawn Man LawnSite Senior Member
    Posts: 479

    Well, your numbers are fairly accurate for someone who has never been in the business. Now you see why so many complain about scrubs and lowballers.

    Here is where I may see your flaw:

    1. 55 ($30) lawns seems too few for a solo for one week. A $30 lawn should take about 30 minutes of mow time. If that is the case then you are only mowing for 5 1/2 hours a day (11 lawns). I realize there is drive time to consider but you should be more in the neighborhood of 15 lawns a day. That will put you at 7 1/2 hours of actual mow time, and then add another hour or so for drive time.

    So this should put your gross more in the area of $67,500

    2. You should be able to upsell many of your accounts. There is shrub pruning, mulching, seeding, aeration etc... You should be able to count on at least an extra $300 for at least 1/4 of your accounts. Based on 75 accounts that would be an addition $5000 to $6000 pushing your total yearly income over $70k.

    Does this sound a little better?
     
  5. GarPA

    GarPA LawnSite Silver Member
    from PA
    Posts: 2,585

    For being only 20, and never having been in this business, you already have an advantage over most of the other start-ups. WHY? Because you understand the importance of NUMBERS and to some degree you are developing a business plan which is critical for any new business startup....since we sell man-hours, knowing your NUMBERS is an absolute necessity if you want to survive long term.
    The Lawn Man above gave you some good advice...particulary the part about about selling other "light landscaping" jobs to your mowing customers. This is where the better profit margins are. From day one, my revenue was split 50/50 between property maintenance and landscaping and every month I thank my lucky stars for not being too heavy in mowing.(just ask those who mow allot who right now are going thru a brutal drought in the midwest.) Brown crunchy grass will not generate revenue, but landscaping work will regardless of the weather

    Regardless of how good your mowing is, you will always be up against low-ballers and guys working under the table hence downward pressure on mowing prices.

    If you want to make it in this business you can...but the first couple of years will not be easy. Good luck and finish that business plan.
     
  6. velocicaur

    velocicaur LawnSite Member
    Posts: 38

    I think you are right about the landscaping jobs and that is something I didn't consider earlier. I haven't done some of those things, but I guess I'll be required to learn how to do them.

    Thanks again,
    Matt
     
  7. Thirdpete

    Thirdpete LawnSite Member
    from Chicago
    Posts: 236

    YOu're in Michigan, are you sure you're looking at 30 cuts a year?

    Also, how are you going to get those 55 accounts? We put out 3300 fliers this year in targeted areas and recieved 8 new weekly accounts. We put an ad in DollarWise (distribution of 35k/week) for 8 weeks, with no new accounts, two price shoppers looking and possible landscaping. If the area is saturated (which it is here) then you may have a problem getting that many accounts.
     
  8. Runner

    Runner LawnSite Fanatic
    Posts: 13,494

    I can tell you right now, that as a solo, 15 lawns a day isn't even practicle. If you do 10 to 12 a day, you are bustin' your rearend. Your avaerage draw may come in around 35 per mowing. the reason being is that that is what most of the other morons out there in the "grass cuttin'" business are getting. It's hard to compete with a bunch of guys with trailers and Z's that don't pay insurance and don't pay taxes. the main thing is, is that you have to have a plan. This includes taking baby steps. Plan ahead of where you're gonna start, steps yo will take in a forward direction, and work up to what you are thinking now. you're on the right track, though.
     
  9. velocicaur

    velocicaur LawnSite Member
    Posts: 38

    There are quite a few businesses in my area. I figured, and hopefully, I could do 15-20 yards my first year, maybe more. Second year, 30 +/-, enough to cover gas, insurance, etc. Getting my name out in circulation is the main goal of the first couple of years. The third year I would like to be at 50 +/-, depending on what kind of jobs I come across. Hopefully I can expand from there, but we'll see when the time comes.

    I'll have to start an excel spreadsheet later today, maybe I'll have an okay base later this week and you guys can take a look at it if you choose.

    Thanks again,
    Matt
     

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