Profit

Discussion in 'Starting a Lawn Care Business' started by Greensmith33547, Dec 30, 2012.

  1. Duekster

    Duekster LawnSite Fanatic
    from DFW, TX
    Posts: 7,961

    I am pretty sure it is regulations and poor tax accounting that put most new businesses out of business. Doing the work is the easy part for most entrepreneurs. Add an employee and that is a ton of other paper work that willl get you in hot water if not managed. :cry:

    CPA's and accountant have no guts or glory. You have to learn this yourself because the IRS and other agencies are looking at you and your business.
     
  2. Duekster

    Duekster LawnSite Fanatic
    from DFW, TX
    Posts: 7,961

    I hope you are using that as a phrase and not an accounting term. COGS applies to manufacturing not services with pass through purchases.

    Most of us and for sure start ups are qualified small businesses that use cash accounting and do not maintain inventories.
     
  3. larryinalabama

    larryinalabama LawnSite Fanatic
    Posts: 16,250

    I do plan on slowing down quite alot this year, I dont care that much anymore eighter:drinkup:
     
  4. larryinalabama

    larryinalabama LawnSite Fanatic
    Posts: 16,250

    The town I service is 10 miles from the ranch, I thought about buying a home in town but the extra personal expense wouldnt be worth it. Plus I haul alot of debris as well as grass clippings and I couldnt dispose of them in town.
     
  5. Duekster

    Duekster LawnSite Fanatic
    from DFW, TX
    Posts: 7,961

    You made it sound like 40 miles round trip for one lawn.
     
  6. CL&T

    CL&T LawnSite Senior Member
    Posts: 493

    Let me see if I can put this in simple terms. You accountant is giving you a very basic explanation of how a business works. You take the amount of money you get from your customers, subtract from that whatever it costs you to run the business. That is your net profit that you will be paying income tax on. He is saying that you can figure (roughly) 25% out of that will go to the IRS and state but you should know what you are already paying along with your wife. So, what's left after taxes is what you put in your pocket.

    Your cost of business is the money you spend on gas, oil,cell phone, advertising- any money that you lay out for your business. But be careful. Your truck payment (and larger equipment) is most likly a depreciable item meaning you can only claim those payments for a limited time. Your accountant will explain this to you.

    Once you know what your expenses are it's a simple matter to figure how much you have to charge to pay for them. You will want to make more than that in order to put money in your pocket.
     
  7. larryinalabama

    larryinalabama LawnSite Fanatic
    Posts: 16,250

    I thought I said 40 miles per "Day"
    I generally only do 2 to 3 homes per day, and sometimes dont move the truck.

    There is a small market for a 21" mower and a small Pickup, would that make life sweet??
     
  8. Smallaxe

    Smallaxe LawnSite Fanatic
    Posts: 10,081

    Sounds like there is a lot of pie in the sky thinking going on here... stay out of debt and keep your expenses as low as possible and earn as much as you can...
    At the end of the month, decide which expenses are deductible and set aside at least 15% to cover FICA tax on the remainder...
    From there you can begin to see what the figures might be on your year end 1040 Form...

    Estimating before your first client is kind of delusional and will only give you a false understanding of how business works,,, or doesn't work...
     

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