Should I or Shouldn't I

Discussion in 'Lawn Mowing' started by Ramsey's Lawn Care, Apr 23, 2002.

  1. Ramsey's Lawn Care

    Ramsey's Lawn Care LawnSite Member
    from Ky
    Posts: 9

    I am a firefighter and on my day's off I mow yards. I have 11 accounts totaling a little more than $500 a week. I have a Snapper hydro pro 48inch cut. A guy I work with a the fire dept. has had an offer to by a 61 inch hydro z turn for $6500 and take on approx 55 accounts totaling approx. $900 a week. He want's me to go in with him.

    I have never had a partner in mowing. So my ? is how does it work with paying each other and taxes. What should I do? The money sounds good but is it worth it by spliting the money?
     
  2. Scraper

    Scraper LawnSite Bronze Member
    Posts: 1,656

  3. KirbysLawn

    KirbysLawn Millenium Member
    Posts: 3,486

    55 accounts for $900 ($16.36 per lawn) and you are making $500 ($45.45 per lawn) for 11 accounts? Any wonder why the other guy is selling?
     
  4. proline32

    proline32 LawnSite Senior Member
    from 98383
    Posts: 278

    Well, one thing that can ruin friendships is becoming partners in business, If you decide to do this you may want to set yourselves up as an s-corporation, basicly you both own shares of the corporation and you pay yourselves at the end of the year after you figure out what your net profit is after all of your taxes and expenses are paid. If you can't wait till the end of the year then what you can do is take a monthly draw against what you expect your profits to be, but you must be careful to budget so that you don't sell your self short of cash flow. Being a firefighter, you at least have an other income so if you can hold off paying yourself a dividend till years end. You will want to see an accountant, and if you decide to partner up, you will want to delegate duties between the two of you, from my experience..... Most partnerships never work out great, truthfully I would rather not split my earnings with someone else, and 55 accounts totaling 900 a week? must be some small yards.... you're doing a lot better with your 11 accounts bringing in 500 a week. so your better off making more money with less work.
     
  5. SLS

    SLS LawnSite Bronze Member
    from Mars
    Posts: 1,540

    Yeah, Ray...I was asking myself that same question.

    It seem's our fried Ramsey could pick up about 8 to 10 more accounts and do just as well (money-wise) with only half the headaches....and no partner to deal with (a BIG plus!)

    20 customers @ $900 or 55 customers @ $900.........gimmie the 20 PLEASE! :D

    With these figures I can see why the guy with the ZTR would want to team up with with Ramsey...he's the "money maker" of the two.

    Less IS more! :)
     
  6. LawnLad

    LawnLad LawnSite Senior Member
    Posts: 738

    Do partnerships work? As a law, you can't say no because there are some that work. I dont' know what the statistic is of broken partnerships... but there are many. When you ultimately split, which you will, it's like a divorce. So when you go into a partnership have your "pre nump" in place listing all assets transferred into your new corporation, etc. Make sure you have a solid buy/sell agreement in place with options to get out at any time and a plan for how you'll "divorce". DO THIS UPFRONT, as it will save you tons of heart ache, attorney's fees and general discomfort down the road.

    All that being said, I'd rather hire your friend as a employee of your company - pay 'em well, buy his accounts, buy him equipment, etc. I would not partner up. Keep your friendship in tact.
     
  7. Quality Lawn Care

    Quality Lawn Care LawnSite Member
    Posts: 45

    I'm also a Full Time Fire Fighter, the hours are great for doing lawn care on the side. I have 12 accts. that total $600.00 a week. I have a fellow Fire Fighter that helps me and we can do most of them in one day ( I pay him 13.00 per hour cash ). He wants to become a partner and get more accts., I have serious resevations about this, I have known many partnerships that have ruined friendships. Most of the time the work load is not 50/50 and that's usully the start of hard feelings. I would stay away from this partnership your thinking about. Why don't you just have him work for you?
     
  8. LawnLad

    LawnLad LawnSite Senior Member
    Posts: 738

    I'll add this.... a 50/50 partnership does not work. The term partnership is misleading. Partners seems to imply equality. Qlty Lawn Care said, many 50/50's don't work because there is an unequal input from the partners. If you do decide to co own, there must be an unequal ownership interest so the final decision rests with someone. Give someone 30% ownership interest so they have profit motivation - but they do no have the ability to dead lock the company by wanting to go another direction or worse yet, making no decision. Ever try to work with some that just wants to veto your ideas? Part ownership can work, just make sure you get the legal stuff set up.
     
  9. Soupy

    Soupy LawnSite Gold Member
    Posts: 3,125

    Well Ramsey, You are makeing $500 now doing 11 lawns by yourself. If you team up with this guy you will be doing 66 lawns with another person for $700 each. Now lets just break it down to 33 lawns a peice. you will be doing 22 more lawns for only $200.

    Sounds like this guy selling didn't know what he was doing and wants to dump his mistakes. I would stay away form this venture.

    Soupy
     
  10. Scraper

    Scraper LawnSite Bronze Member
    Posts: 1,656


    Good point that I do not recall having really been discussed before.
     

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