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seeking wise counsel

8K views 39 replies 11 participants last post by  Duekster 
#1 ·
Gentlemen and ladies: I have made the decision to start a small lawn care business. I am retired, have a very good pension (39 k annual) but still need to net about $13,500 annually to supplement the pension to pay the bills. The additional 13.5 K will keep us at about the same standard of living as when I was employed. I'm still in pretty good health/shape and don't mind hard work and good Lord willing will be ready to go at it in 2013. My lovely bride has a good job, kids are out of the house with 1 still in college.

Goal is to primarily offer mowing service but leave the door open to other services (mulch, edging, installation, clean ups) as long as the other services/projects are small as I do not intend to hire/work with anyone-I am going solo. I would be happy doing nothing but mowing-but would be willing to look at other work.

I have saved enough to pay for all of the equipment I need (and already have most of the equipment). Overhead will be kept low. The plan is to stay lean.

I have no customers, but, I have not hit the pavement yet to get my name out. I intend to start advertising and networking soon and will continue to do so throughout the winter right up to mowing season/2013. The thought of no customers lined up is a significant concern. But, I have saved enough money to get through year 2013 in case the $13,500 net doesn't happen.

Does it sound like I am on the right track? Is $13,500 net doable just starting out? Any advice would be welcome. Thank you in advance and God bless.
 
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#2 ·
Sounds pretty good to me. However, I think you should resign yourself to the fact that cleanups are part of mowing. How can you mow a lawn that's covered in debris? Most lawns will need a spring cleanup. Sometimes it's just a matter of picking up some sticks and putting a bagger on the mower. Other times it's a matter of doing the fall cleanup that never got done. In the fall when the grass is still growing how are you going to mow it when it's covered with leaves?

Just keep in mind that any time you decline to provide a service that the customer requests you open the door for someone else to not only provide that service, but the services you are offering as well.

As far as the $13.5K that more than achievable.
 
#3 ·
Sounds like you're on the right track. When it comes to advertising, even if you're not planning on having a web site, create Google/Yahoo/Bing local pages for your business as soon as possible and that will help market to those who sit in offices all day searching for services on their boss' dime. lol Well thought out Craig's List ads (read: not all caps, not a string of exclamation points, and a professional image portrayed) can also be very effective.
 
#4 ·
Gentlemen and ladies: I have made the decision to start a small lawn care business. I am retired, have a very good pension (39 k annual) but still need to net about $13,500 annually to supplement the pension to pay the bills. The additional 13.5 K will keep us at about the same standard of living as when I was employed. I'm still in pretty good health/shape and don't mind hard work and good Lord willing will be ready to go at it in 2013. My lovely bride has a good job, kids are out of the house with 1 still in college.

Goal is to primarily offer mowing service but leave the door open to other services (mulch, edging, installation, clean ups) as long as the other services/projects are small as I do not intend to hire/work with anyone-I am going solo. I would be happy doing nothing but mowing-but would be willing to look at other work.

I have saved enough to pay for all of the equipment I need (and already have most of the equipment). Overhead will be kept low. The plan is to stay lean.

I have no customers, but, I have not hit the pavement yet to get my name out. I intend to start advertising and networking soon and will continue to do so throughout the winter right up to mowing season/2013. The thought of no customers lined up is a significant concern. But, I have saved enough money to get through year 2013 in case the $13,500 net doesn't happen.

Does it sound like I am on the right track? Is $13,500 net doable just starting out? Any advice would be welcome. Thank you in advance and God bless.
RScapes,

Have you already gone out and purchased equipment specifically for this business? If not, I would take the next few months to evaluate whether you are making a good decision or not.

This business can easily net you $13,500 per year working part-time, but it will take a lot of work to get there.

Here are some questions I think you should consider before you jump into this head first:

1. If you currently need $13,500 to maintain the same standard of living, what will the plan be for the future as prices continue to rise (inflation) and your body breaks down as you age? I'm guessing you are in your 50's, so SS and Medicare will kick in once you reach 65 (there are a myriad of other factors, but 65 for simplicity). In my opinion, it is risky to bank on your body holding up into your middle to upper 60's chasing a mower around all day.

2. What other skills and abilities have you acquired over your lifetime? Is there another part-time business that would be available for you to start with similar start up costs? There is nothing wrong with mowing lawns, but the barrier to entry is so low that competition is fierce all across the country. That doesn't mean that you can't be successful, but in a heavily competitive market, econ 101 tells us that it is a race to the bottom for profit.

3. If you only need $13,500 a year, have you considered part time work doing something you enjoy as opposed to starting a business? By my calculations, if you could find a job working 20 hours a week at $15/hour, you should be able to meet your yearly need of $13,500. You need to do a self-assessment and decide whether you want to own a business, be self-employed (you own the job of mowing people's lawns), or work for someone else. All three have pro's and con's, but you should decide which of the three fit your desires and personality best.

4. Have you considered reducing expenses instead of trying to increase income? If you are not required to work, most folks are able to significantly decrease what they spend per month. Things like clothing, fuel, auto repair, eating out should all decrease as you no longer are required to do those things to work. Maybe a combination of both? You could try to reduce expenses by $6,500/year while increasing income by $7,000/year. Then you would have less pressure to work or start a business.

These were just a few of the thoughts I had after reading your initial post.

Good luck!
 
#5 ·
If you are paying cash for all your equipment and have a nest egg to cover the first year, I'd think you should be fine. 13K a year is easily doable the 1st year.

I assume you like doing lawn care. You need to. This kind of work is easy, but it's harder when you're doing it for other people for pay. Based on my averages, if you cut 2 lawns a day (or 40 a month), you'll gross a little over $14K. That's only 10 - 20 customers depending if you cut weekly or bi-weekly. Keep in mind these figures don't include any overhead like gas, maintenence, etc.

How much production you'll get will depend on your equipment as well as your health. I'm 60 years old, have had a spinal injury that makes me about 85% from the waist down, so I can only do 3 lawns at the most if I have to walk behind the mower. I have a riding mower, so I can do more than that.

Looks good to me. just don't kill yourself doing it. Start off slow and let your body get used to the work. It's harder on you than you think.

Good luck.
 
#6 ·
RScapes,

Have you already gone out and purchased equipment specifically for this business? If not, I would take the next few months to evaluate whether you are making a good decision or not.

This business can easily net you $13,500 per year working part-time, but it will take a lot of work to get there.

Here are some questions I think you should consider before you jump into this head first:

1. If you currently need $13,500 to maintain the same standard of living, what will the plan be for the future as prices continue to rise (inflation) and your body breaks down as you age? I'm guessing you are in your 50's, so SS and Medicare will kick in once you reach 65 (there are a myriad of other factors, but 65 for simplicity). In my opinion, it is risky to bank on your body holding up into your middle to upper 60's chasing a mower around all day.

2. What other skills and abilities have you acquired over your lifetime? Is there another part-time business that would be available for you to start with similar start up costs? There is nothing wrong with mowing lawns, but the barrier to entry is so low that competition is fierce all across the country. That doesn't mean that you can't be successful, but in a heavily competitive market, econ 101 tells us that it is a race to the bottom for profit.

3. If you only need $13,500 a year, have you considered part time work doing something you enjoy as opposed to starting a business? By my calculations, if you could find a job working 20 hours a week at $15/hour, you should be able to meet your yearly need of $13,500. You need to do a self-assessment and decide whether you want to own a business, be self-employed (you own the job of mowing people's lawns), or work for someone else. All three have pro's and con's, but you should decide which of the three fit your desires and personality best.

4. Have you considered reducing expenses instead of trying to increase income? If you are not required to work, most folks are able to significantly decrease what they spend per month. Things like clothing, fuel, auto repair, eating out should all decrease as you no longer are required to do those things to work. Maybe a combination of both? You could try to reduce expenses by $6,500/year while increasing income by $7,000/year. Then you would have less pressure to work or start a business.

These were just a few of the thoughts I had after reading your initial post.

Good luck!
Some valid points but I am sure the kid in college is an expense that will go away.

If the wife is still working the OP likely wants something to do and generate some income.

My advice is to set up the old home office and get all the tax deductions that would come with it.

I also recommend that he keep prices up! even with low expenses there are many consideration.

IE think of the mower equipment as an investment. Now break down the cost of the mower, hand held and truck over 10,000 hours. That is your cost recovery period, then think about the interest rate you want to make on an investment.... this should beat the stock market. Say 10% a year is good.

So you want 10% a year on your initial investment plus the principle recovery over 10,000 hours.

Now add all your expenses insurance, fuel and maintenance. Allow some money to buy small tools, say 200 month. Break this down into an hourly rate.

so now we have two components of your hourly rate.

You want 16K per year so you need to make around 20K or $10.00 an hour but then again you are not going to work a full time job so triple it to 30.

I suspect when you do all the math you will be at or about 50 to 60 an hour minimum.
 
#7 ·
To the OP, if you haven't already, feel free to seek advice here on equipment choices. It's best to avoid homeowner-quality equipment unless it's something you already have for personal use. It's important to have a contingency plan if one of your main pieces of equipment goes down too. You want any problems you have to be invisible to your customers and to remain dependable at all times.
 
#8 ·
I just retired again from my part time lawn business after doing what you want to do for 7 years. Here's what worked for me. I was 59 years old but age is a plus in certain customer demographics as it implies experience and knowledge in those first impression sales calls. I combined that with a professional image of uniform, written estimates, lettered trailer and promptness. Decided early on not to chase low ball clients by setting $35 minimum mowing fee. Charged hourly on cleanups (learned this one the hard way). Used post card mailers to generate sales leads in only the neighborhoods I wanted to work in. Decided anything else (yellow pages, etc.) was too expensive and non-specific as to location. You can't make money pulling a trailer across town to mow a couple of $35 lawns. After 2 years, only marketing was phone# on trailer and your customer's neighbors will start calling you. I only worked 4 days a week about 5 hours a day and averaged $45/hr gross after a couple of years. You get better and faster while the price stays the same. Best part time job I ever had.

JD
 
#9 ·
What everyone else said.

I retired 7 years ago and I'm starting my 6th. year in the business. I'm running two crews and spend most of my time bidding and in operations.

Here's my addition to the excellent aforementioned advice;

1) Avoid all consumer debt related to the business if at all possible.

2) Your first customer will be the hardest.

3) Be careful while bidding one-off jobs. Clean ups always take longer then you think.

4) Cultivate relationships with other trades. Especially arborists.

5) Keep your prices professional. You're doing ok if you're catching 50% of the bids.

6) Learn the signs of a possible PITA and avoid them at all costs. They're time consumers.

7) Do not be afraid to fire a client...preferably after they pay you. Be civil, diplomatic, and firm but if your gut is telling you that you're dealing with a potential problem, then walk away.

8) This is better then joining a gym.....have fun!!!!
 
#10 ·
No one has mentioned that he needs to net 13K as the owner not have sales revenue of 13K. By the time uncle sam is done, fuel is bought, repairs are made, fees are covered, etc. he will need revenue of around $30,000 on a very lean and conservative side. Not sure the area but lets say 30 weeks for spring cleaning, mowing, and fall cleaning. $1000 a week. $250 a day for 4 days. Solo and not working at a young mans pace with likely not top of the line equipment is going to lead to 6-7hr days. Likely about 30 hours a week. or low $30's per hour gross which is actually pretty decent if it amounts to that. There are guys all over here that are pulling revenue of several hundred thousand and if they did the end math likely are making $20-25 per hour. There are a few old timers doing this type of gig around, but they are not breaking their backs. Likely they are golfing buddies or whatever and they are not taking the type of client that most full service landscapers would be be interested in. More so they are good for super cheap commercial clients, hands on and mow only clients, and the type of client that generally needs work done, but has no interest is hiring "contractors". It can be done, but like any business it is not all roses.
 
#11 ·
I chose to skim over most of the responses as everyone has a different opinion. $13,500 is more than enough to start a business assuming you have a truck to with. Buy a new commercial grade weedwacker, backpack blower, and hedge trimmer. Buy a used or new trailer 5x10 to a 6.5x12, it all depends on what size mowers you need.

Your biggest decision is what size mowers to buy, do the properties in your zip code have small gates that only a 22" can fit in? can only a 36" fit? and so on.

Most people already have a 22" mower so just use that as long as the cut is acceptable. If you can fit a 48" mower through most gates in your zip code then get a 48" mower, if not you NEED a 36" mower or you will waste time with the 22". If you have wide open property in most of your zip code you can get a 52" or 60" mower.

Look on craigslist and eBay for deals on used equipment in your area, get commercial equipment with under 1200 hrs because it should last you at least 3 seasons before hydros need to be replaced or other expensive components.

22" to 36" mower should be a walk-behind, i prefer belt driven 36" over hydro
48" to 52" can be walk-behinds, but I prefer stand-on mowers. Once again if you are in wide-open areas then ztr's would be fine as well.
60" and up is when you should be a ztr

Everything is different for your application.

THERE HAVE BEEN 4 THREADS IN THE PAST WEEK ON EXACT MOWER SIZE AND COST TO BUY. Look them up in the search bar.

Look professional and plan on spending $500-$2000 in advertising, I advise postcards.

-Michael

(For a trailer, echo/stihl weedwacker, blower, hedge trimmer, 22" mower, and 36" mower you will be in the $3500-$6000 brand new. Look into World Lawn Mowers for a cheap new walk behind, I have heard good reviews and my local shop just started selling them this year.)
 
#12 ·
Sounds pretty good to me. However, I think you should resign yourself to the fact that cleanups are part of mowing. How can you mow a lawn that's covered in debris? Most lawns will need a spring cleanup. Sometimes it's just a matter of picking up some sticks and putting a bagger on the mower. Other times it's a matter of doing the fall cleanup that never got done. In the fall when the grass is still growing how are you going to mow it when it's covered with leaves?

Just keep in mind that any time you decline to provide a service that the customer requests you open the door for someone else to not only provide that service, but the services you are offering as well.

As far as the $13.5K that more than achievable.
Thank you Darryl-appreciate the advise.
 
#14 ·
Tonygreek-thanks for the advertising advice.

Britsteroni-Yes, a part-time job is plan B if this doesn't work out. Or part time work (for someone else) and Part time Lawn care. And yes, there is always room to reduce $ going out. Thank you!

Billpiper-Always good to hear from another retired guy! Thank you sir.
 
#15 ·
Thanks Duekster


JoDon and Hamatsa-You guys and Bill Piper bring the total up to 3 retired guys providing excellent responses and sound advice. I am glad I am not alone. And it sounds like the three of you view this endeavor favorably (after retiring). That is encouraging.

I must admit, starting out, I have already been tempted to price low just to get a few customers. I will do my best to resist.
 
#17 ·
What may also help is you get some sort of side stream, whether it be firewood or stump grinding, brush hauling, annual/seasonal color. Some guys do dump runs and sometimes get some really sweet salvage. You have to have a place to get rid of it all and store the salvaged items though. Of course there's snow removal for those of us in the colder climates. You can make pretty good money sitting in a nice warm (because it's over heating so the heat is blasting) truck eating donuts and drinking coffee.
 
#18 ·
Thanks Shovelracer for opening my eyes. 30k revenue is more than I calculated/anticipated.


CowboysLawnCare-Michael:

$13,500 is what I net to put in my pocket/net after all expenses. The equipment (for the most part) is already taken care of.

The equipment consists of an old 44" Toro walk behind that will back up a newer 52" Toro walk behind (both belt driven). Still need to pick up the trailer , blower, line trimmer (have the $ already earmarked for that).

There are not many gates in my area. Lots are larger, ranging from 1 to 3 or even 4 acres at most residential/commercial properties in the areas that I have my eyes on. Thanks

Excellent advice from everyone, much appreciated. Any more retired out there?
 
#19 ·
Im almost 50 and still go at it pretty hard.

The biggest key to doing this business is build a route close to home. Fliers are cheap, put them in the neighboorhoods that you want to service, once a month if necessary.
Do not do homes on hillsides it will wear you down. Small yards are likely more profitable if your part time.

You will have to find the right "nich" for yourself, if your unsure at this time what that will be it will come to you.

Do not work cheap PERIOD. 10 small weekly yards done for 6 months at 50$ each will eaisly achieve your goal of around 15k in your pocket.

Oh and also have fun, while its hard work, it is enjoyable.
 
#20 ·
Im almost 50 and still go at it pretty hard.

The biggest key to doing this business is build a route close to home. Fliers are cheap, put them in the neighboorhoods that you want to service, once a month if necessary.
Do not do homes on hillsides it will wear you down. Small yards are likely more profitable if your part time.

You will have to find the right "nich" for yourself, if your unsure at this time what that will be it will come to you.

Do not work cheap PERIOD. 10 small weekly yards done for 6 months at 50$ each will eaisly achieve your goal of around 15k in your pocket.

Oh and also have fun, while its hard work, it is enjoyable.
Larry-- Many years ago I had a small lawn care operation that I did on the side (in addition to the full time job). Got out of the part time lawn care as the full time job and family required my full attention. The full time career, at times, was stressful. Now retired from that, I look forward to getting back outdoors. I like your attitude "have fun, hard work, it's enjoyable" Thanks Larry!
 
#21 ·
Tonygreek-thanks for the advertising advice.
When you have a service area decided on, shoot me a message and I'll gladly pass on any leads. I often have people ask for recommendations in the New Albany/Gahanna and Upper Arlington/Dublin/Hilliard areas.
 
#22 ·
Thanks Shovelracer for opening my eyes. 30k revenue is more than I calculated/anticipated.
There are always things to consider.

For a lot of guys equipment recovery is one. A lot of small or under the radar guys will say, well I paid cash and all my equipment is paid for so I can charge less. The way I see it they have tied up valuable operating cash and not charging for recovery is foolish because in 5 years the replacement will have to come from somewhere.

Another is all the other items you fail to think about at first. With no business you can be driving around getting 35 MPG in a Civic. Now you need a truck, even if it is a 4 cylinder compact. All of a sudden you are down to 10-15 MPG, are replacing brakes, tires, balljoints, etc every 2 years. Your vehicle expense winds up being several thousand a year when likely you just planned on fuel and oil. This is just an example.

I'm talking about running a legit business. Now a lot of guys will think they will just fly under the radar, and honestly being small it is entirely possible. With a small operation though going legal is very minimal, and the costs would be very low. The thing is you need to stay the size you intend to because there is a pretty large jump to the level of contractor from retired lawn service. A few guys have talked about hiring help as needed. Right there alone you have opened up yourself and your business to major liability issues. Workers comp is a big issues in most states. It does not take much to crush a finger, damage a foot, or much worse. Realistically you could probably run a legal very small operation for somewhere around 3-5% more than the same operation under the table. Not worth losing your house over such a small amount.

With any business you will have a road ahead of you. Likely even with intended revenue figures your first season at least you will make very little profit. You will have a lot of startup and recovery costs that first season so your tax return will likely show a loss, but that is not necessarily a bad thing.

A wise man told me once. If you want to be profitable in the lawn business you need to be either very small and lean or very large and lean. The key here is to avoid mid sized operations. These guys running around with 3 crews may be making some money, but the hours they require and the headaches they have are far worse than a solo guy grossing 50K or a leading outfit grossing 10 million.
 
#23 ·
When I started out I was kind of retired myself, even though I was only 39. I lost my job as a project manager in the environmental consulting and engineering field and had already built up a fairly healthy financial cushion. My mother was dying of Lou Gehrigs Disease, my dad had been gone for 3 years so she was in my care, I had two young sons (ages 3 and 6) who hardly knew who I was, my wife and I had gotten somewhat distant because I was pretty much consumed with work all of my waking hours...I brought work home every night...reports to review/edit and non-billable work to keep my billability rate up high to get my company profit share rating high. I got a pretty good severance package from my company and was collecting unemployment until I started the business.

I invested 10K as start-up cash and bought a new walk behind mower, trimmer and blower and had a trailer made by a local trailer shop. I already had a truck and landscape tractor for my own use. I cashed out an annuity I had taking monthly payments for 10 years. That allowed me to take it easy at first and put most of what I made back into the business for the first couple of years. My wife hadn't worked since our second kid was born so we got to spend a lot of time together and with our kids. We spent a lot of time recreating on our back acreage and in the river and going to the local attractions. Bascially I semi-retired while I was able to enjoy it with my kids. My wife took a total of 12 years off and is back to work now part time and I'm full time on the business with some seasonal help from the kids. It was really nice to be a young family with me only having to work part time on the business. We didn't get to travel out of state much or do vacations, but we had a lot of fun.

My biggest problem was that my 1985 truck went down on me twice the first season, once for a week to have the top of the motor replaced. I had a tow hitch put on our van to use as a backup. It was a 2002 VW and actually has a 3/4 ton chasis, extra load tires and handled the trailer well as long as I balanced it properly...didn't end up using it but it was available if needed. I mentioned it earlier, but you need to have a spare for just about everything or at least something you can substitute on a short-term basis. Some dealers will have loaner mowers they will let you use. You can get a short-term rental truck from Home Depot or some other source...just don't mention you want to use it as a landscaping vehicle...you're moving furniture ;) You don't want to be in a situation like I was trying to service your lawns out of a Taurus station wagon with a push mower for a week.
 
#24 ·
As stated above it is very cheap to become a legitimate business compared to starting the rest of the business. I had around $140 in business documentation fees and my insurance covered:
$1 million general liability
$5000 marine policy(cover equipment)
one or two other things as well
One year of insurance cost me $560 for lawn and landscaping(not hardscaping).

If you only wanted lawn coverage it would have only cost $150 for me. Get quotes from a few local agents. I know Progressive won't accept first year companies and their are others that won't either.

-Michael
 
#25 ·
There are always things to consider.

For a lot of guys equipment recovery is one. A lot of small or under the radar guys will say, well I paid cash and all my equipment is paid for so I can charge less. The way I see it they have tied up valuable operating cash and not charging for recovery is foolish because in 5 years the replacement will have to come from somewhere.

Another is all the other items you fail to think about at first. With no business you can be driving around getting 35 MPG in a Civic. Now you need a truck, even if it is a 4 cylinder compact. All of a sudden you are down to 10-15 MPG, are replacing brakes, tires, balljoints, etc every 2 years. Your vehicle expense winds up being several thousand a year when likely you just planned on fuel and oil. This is just an example.

I'm talking about running a legit business. Now a lot of guys will think they will just fly under the radar, and honestly being small it is entirely possible. With a small operation though going legal is very minimal, and the costs would be very low. The thing is you need to stay the size you intend to because there is a pretty large jump to the level of contractor from retired lawn service. A few guys have talked about hiring help as needed. Right there alone you have opened up yourself and your business to major liability issues. Workers comp is a big issues in most states. It does not take much to crush a finger, damage a foot, or much worse. Realistically you could probably run a legal very small operation for somewhere around 3-5% more than the same operation under the table. Not worth losing your house over such a small amount.

With any business you will have a road ahead of you. Likely even with intended revenue figures your first season at least you will make very little profit. You will have a lot of startup and recovery costs that first season so your tax return will likely show a loss, but that is not necessarily a bad thing.

A wise man told me once. If you want to be profitable in the lawn business you need to be either very small and lean or very large and lean. The key here is to avoid mid sized operations. These guys running around with 3 crews may be making some money, but the hours they require and the headaches they have are far worse than a solo guy grossing 50K or a leading outfit grossing 10 million.
Shovelracer: You are correct. I was not considering equipment recovery and replacement down the road. Most of this equipment I will still need, lawn care business or no lawn care business as I have some acreage to take care of here at home. I also didn't look too close at the increased frequency of breakdowns and part replacements on the truck. I appreciate you candid insight on the costs involved. Often times that part of the equation gets overlooked and glossed over--thinking only of the positives (working outside, independently without a bunch of employees to worry about). I think it's important to look at all issues, positive and not so positive in order to make a calculated decision. Having said all of that, I have made the decision and intend to to move forward knowing that this will not be easy. I do have a great deal of comfort knowing my God is with me. I do have some peace of mind knowing I have a cash reserve to supplement the pension to get through next year. If it doesn't work, I work for someone else part time.

The plan is to stay legal and small. I will follow the old man's advice of small and lean. I have retired from a situation where I supervised a large number of people and don't want to go back. Too many headaches. The only one I will supervise is myself.

Thanks again shovelracer and keep the good advice coming!
 
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