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Profit After First Season

Discussion in 'Lawn Mowing' started by Ground Rules, Nov 15, 2000.

  1. Ground Rules

    Ground Rules LawnSite Member
    Posts: 27

    How many of you actually showed a profit after your very fisrt season in business?

    I started late this season, late May, and have just finished preliminary numbers through October. I am also PT and a one man show due to being able to meet existing family, home, benefits, etc. obligations.

    My numbers for Sales vs. Expenses are glaring obvious to me so I know what I need to do to. I'm just wondering if my initial expectations, which were to at least show a marginal profit, are unrealistic. I realize there are many factors but I was just wondering when you completed your very first season either as PT or FT whether or not you showed a profit.

    I was also curious how you handle your travel time. In other words if it takes you an hour to travel to and from a job how do you "book" that time. I am looking at it as a labor expense for myself as this is "down time" and also time I am not generating income.

    I can go into more detail with respect to start up and sales numbers but wanted to post this out here for some initial feedback.

    [Edited by Ground Rules on 11-15-2000 at 01:29 PM]
  2. TLS

    TLS LawnSite Fanatic
    Posts: 7,940

    For a lot of years I was showing a loss. Everything I bought was a business expense and I was still living at home. I had all the good equipment and trucks, but wasn't showing a profit. I have PT income from another job, so thats what I lived off of. There is so much that you can write off as a business that it seems silly to report MAJOR incomes. Get a good accountant. There are a lot of legal loopholes and tricks that can save you from paying it to Uncle Sam. It did hinder me when I was applying for my mortgage. Ouch..

  3. MWHC

    MWHC LawnSite Member
    from Wyoming
    Posts: 202

    Yes, IMHO it's real hard to generate a profit your first few years in business, especially if you are new to the game.
    If you are like most you incured quite a hefty start-up cost. I have seen more than one person lay a lot of cash down and think they are going to take over the market. It doesn't happen that way. They almost always fail.

    Don't be afraid to do it as a part timer until you build up the client base to support you and your family doing this full time. You will learn a lot over this period of time.
    Lawn mowing is selling time. If you ever want to make big money, you have to sell lots of time, possibly diversify. Mowing is not the most profitable aspect of this industry.

    You asked how people figure time in the truck if it takes an hour to drive from one location to another. Imagine yourself sitting at home. Set a garbage can in front of you. For each minute you drive you need to throw a quarter and a dime in the can. Then take it outside and throw it away. If you have employees, you may need fifty cent pieces or dollars. Nuf said, the accounts need to be close together; measured in minutes. Driving in the truck is an expense. Maybe it's worth $.35/min it if you are doing laps around the playboy mansion. Just depends if you have a window seat and it's trampoline day.

    The last post made a good point. Get a good accountant, they get paid to use loopholes and keep you out of jail.
  4. dhicks

    dhicks Member
    Posts: 771

    Like you, I started part-time in May. In reviewing all accounts receivable v. new equipment expenses it will be next June, or July before I have recouped my outlay of cash for equipment, insurance, parts, gas, etc. At this point and for the foreseeable future, I will only measure income v. expenses. I guess that if I attempted a "cost of doing business" analysis, the income per minute/hour would look rather pitiful. At this point, I can predict a profit for next year. If I buy that new D.C. and a Turbo Tuff next year as planned, it will be 2002 before I put some cash into my pocket. No matter how many hours I work for myself, it beats the hell out of punching a time card and making somebody else rich.
  5. Skookum

    Skookum LawnSite Senior Member
    Posts: 675

    I have always rolled a profit from day one. But, I did not jump in with all the lastest greatest equipment. Everyone has a different way or idea to run a business. I started with what I had from my own personal arsenal. As I made money, then I bought bigger newer equipment. My first commercial walk behind, I bought after I had a signed deal for four KFC's where I knew the mower was paid for in the first two months.

    Now, I have everything I need (but, not all I want) so costs are lower to maintain the equipment I have. I try to purchase a few new items every year. If I must replace a mower, they were staggerd by years when I purchased them, so they should not need replaced at the same time, I hope.

    In last few years there have been several start here in town that acted like they won the lotto. $35,000 truck, $7,000 trailer, $5,000 graphics, two $8,000 ztr's, two $5,000 midsize WB's, two $900 small WB's, two $3,000 aerators, you get the picture! I really envy those guys to have the gonads to hang themselves out like that to startup. They must be really confident, I guess. I am more of a sure thing type person.

    But, I believe if you have the drive, you can make as much as you want in this industry.
  6. CCLC

    CCLC LawnSite Senior Member
    Posts: 261

    I too wonder how some guys really buy the best of everything to start a business and survive more than a couple of years. I started out with a beat up truck, trailer, and a walkbehind. We have grown steady every year until this year. We decided to cut back labor and become more efficient in areas that were killing us. I have always made a profit but the longer that I am in the business the more I expect to make.

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