principles of business

Discussion in 'Lawn Mowing' started by A+ Lawncare, Apr 27, 2005.

  1. A+ Lawncare

    A+ Lawncare LawnSite Senior Member
    Posts: 503

    i've listed the principles of my business and would like to see other ppl comment on it all.....

    21'' toro (solo operation)

    3.0 mph @ 100% efficiency= .64 acre an hr
    3.0 mph @ 80% efficiency= .51 acre an hr

    38%---- bagging

    100% efficiency-38%= 62% efficiency (bagging)
    80% efficiency- 38%= 42% efficiency (bagging)

    3.0 mph @ 100% efficiency= .64 acre an hr- 38% (bagging)= .24 acre an hr= 10,454.4 sq. feet
    3.0 mph @ 80% efficiency= .51 acre an hr- 38% (bagging)= .19 acre an hr= 8,276.4 sq. feet

    Size Chart-

    1/8 acre= 5,445 square feet
    ΒΌ acre= 10,890 square feet

    1/8 acre: $20*X 38%= $20+$7.6(bagging charge)= $27.6= $30 total charge
    1/4 acre: $25* X 38%= $25+$9.5(bagging charge)= $34.5= $35 total charge

    1/8 acre / 60mins = 90.75 sq. feet a min.
    1/4 acre / 60mins= 181.5 sq. feet a min.

    35 customer (1/8 acre) X $30= $1,050
    30 customer (1/4 acre) X $35= $1,050

    $1k a week / $35 (1/4 acre)= 28.5 lawns a week= 32hrs/4days

    10,890 square feet (1/4 acre) X 28.5 lawns= 310,365 square feet / 43,560 (acre)= 7.12 acres total
    310,365 square feet / 32hrs= 9,698.90 square feet an hour
    9,698.90 square feet an hour/ 60mins= 161.65 sq. feet a minute
    $1k a week / $30 (1/8 acre)= 33.3 lawns a week= 32hrs/4days

    5,445 square feet (1/8 acre) X 33.3 lawns a week= 181,318.5 square feet/ 43,560 (acre)= 4.16 acres total
    181,318.5 square feet/ 32hrs= 5,666.20 square feet an hour
    5,666.20 square feet/ 60mins= 94.44 sq. feet a minute
    34 MILES / 17MPG= 2GALLONS X 2= 4GALLONS (68MILES).........
    4GALLONS X $2.25= $9
    17MPG (1GALLON)= $2.25

    $9+$2.25= $11.25 (A DAY/ GAS)

    3 GALLONS X $2.25= $6.75 (A DAY/ EXPENSE OF GAS= 21'' MOWER)

    $11.25 + $6.75 = $18 GAS EXPENSE /8HRS= $2.25 GAS EXPENSE/AN HR.

    32HRS X $2.25= $72 A WEEK (GAS EXPENSE)
    $1,050- $72= $978 a week after expenses..... $978/32hrs= $30.56 an hr.

    35 customer (1/8 acre) X $30= $1,050- $72= $978/ 35 lawns= $27.94 an lawn (after expenses)
    30 customer (1/4 acre) X $35= $1,050- $72= $978/ 30 lawns= $32.6 an lawn (after expenses)
  2. woodycrest

    woodycrest LawnSite Senior Member
    Posts: 435

    between theory and reality there is a tremendous difference.
  3. A+ Lawncare

    A+ Lawncare LawnSite Senior Member
    Posts: 503

    this is all brainstorming/ specualating... these aren't set # of customers or anything, just me running some math in my head.... basically what i want my business to consist of this season, the reason there are 2 types of size of lawns, is due to i don't have all the customers rite now, and i have a set figure of what i wanna make a week, and i was just playing around w/how many customers i need of which size....

    I've got some questions on insurance, what coverage do i need for the above type of customers, only mowing, nothing else...... a few mulch jobs a season....

    $300,000 worth of Liabilty coverage, annual premium is $625
    $500,000 worth of liabity, annual premium is $730
    should i just go with the $300,000 worth of Liabilty coverage and save my money?

    Also, what else should i figure in as an expense, i'm currently hunting for a pickup, but this will be paid for so it won't be an expense..... and i won't need a trailer, so thats no cost to be figured in.... i need to know all of fees of setting & running this business of what i've provided above
  4. pagefault

    pagefault LawnSite Senior Member
    Posts: 492

    I have 2 million and sometimes I wish it was more. Of course, my father is a claims VP for a huge insurance company so I know every horror story there is...
  5. DennisF

    DennisF LawnSite Bronze Member
    from Florida
    Posts: 1,381

    A paid for asset is still an expense. It will have to be replaced eventually so you have to consider the cost of replacing it.

    Other expenses: blades, oil, filters, trimmer line, repair parts (carburetors, recoils, wheels, tires etc.), maintenance on the truck, advertising.

    There are other expenses that will pop up so make allowances for them.
  6. tstrong

    tstrong LawnSite Member
    Posts: 87

    Two things. First, I live on one acre that is mostly flat and open and it takes considerably more than one hour to cut it with a 21". Second,you have your variable costs detailed, but made no mention of your fixed costs. You still have to subtract the costs of your truck, mowers, trimmers, insurance, cell phone, ect... from your bottom line.

    There is a saying in the Army: "The best battle plan does not survive first contact with the enemy". Start small, change ,overcome, adapt and you will become a First-rate businessman. Good luck !
  7. pagefault

    pagefault LawnSite Senior Member
    Posts: 492

    Just my opinion, but it is possible that he always had a cell phone and a truck and that he always plans to, business or no business, an therefore has them figured into his personal fixed costs and covers them with his salary.

    I know this is not the "right" way to do things, but before I left my job, I figured out what all of my personal expenses were. This included replacing the truck when needed, gas, insurance for the truck, utilities, etc. Some of these expenses have gone up, because I use more gas, need more maintenance, etc, but I still had them listed on the personal side because I would need to have these things no matter what I was doing for a living. Plus, it kept things simple. On the business side, I listed new expenses that were a function of that business.

    For me, this made it easier to compare this business to other business ideas and to just going out and getting a job. These sort of comparisons were very important during initial planning. In the end, I knew that the income from the business needed to cover all of my business and personal expenses.

    Now, I have all of that listed as business expenses. I'm just saying that just because he does not list these things as business expenses, does not mean he does not plan to pay for them. If he has always had a truck and a cell phone and he has always paid for them out of a $25k salary, it is reasonable for him to assume that he could continue to pay for them out of the same salary from his business. There is a big difference between ignoring expenses and just accounting for them the "wrong" way.
  8. greywynd

    greywynd LawnSite Member
    Posts: 132

    I didn't see anything other than your mowing/bagging times and speeds. You don't trim? You don't allow a couple minutes to answer a question from the customer when they're home? Never refill the mower or or have to refill the trimmer line, or change blades mid-day? Let alone have a mower problem, truck problem, or get stuck/delayed in traffic. Just some more 'factors' to throw into your calculations.
  9. CuttingEdgeLandscaping

    CuttingEdgeLandscaping LawnSite Member
    Posts: 14

    just my opinion, but i think it is going to take longer on the lawns then you think. i know a 1/4 with a 44" takes me 35-40 minutes to trim, edge, blow. i am sure i move a little slower than most on this site, but it takes a little while.
  10. MMLawn

    MMLawn LawnSite Gold Member
    Posts: 3,569

    First of all as I told you before in one of your other post in the total average you will NOT perform at even 80% EFF kid, not ever. Even at your very young age since you will be using a small 21" mower by the end of the day you'll be lucky to be performing at 25% EFF, esp if you bag also.

    Next if you think that you will CLEAR $27.94 on a $30 lawn you have lost your mind! Again even at you young age still living home with mom and dad you have left off many of your cost to do business as there is A WHOLE LOT MORE COST INVOLVED THAN JUST GAS! You left of the average cost per lawn of your REQUIRED Business License, Business Insurance, Truck Insurance, Dump fees for your clippings if you bag, Blades and Blade sharpening, Oil, Trimmer Oil, Trimmer Line, spark plus, equipment maintenance, clothes (or uniforms) that you will go through, business cards, phone(s), advertising, etc, etc, etc. On a $30 lawn you'll be be doing OUTSTANDING to clear $15.

    Do you even have any clients yet? Talking about having 35 on paper and actually getting 35 is a big difference as you will see. Also last week you were talking about buying a 48" walk behind and now you are going to use a 21" Toro (Homeowner too I bet which used daily as your main mower WILL NOT hold up) which is a huge difference so I suspect you are already on a shoestring budget, which will make getting customers even harder esp this late in the new season. Putting something down on paper and actually doing it is two completely different things. Once you ever start you will see that first hand.

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