Some numbers

Discussion in 'Starting a Lawn Care Business' started by velocicaur, Nov 16, 2005.

  1. velocicaur

    velocicaur LawnSite Member
    Posts: 38

    Some brief numbers I came up with. Anyone seen anything that sticks out as bizarre or impossible? Hopefully mistakes are at a minimum.

    Acounts Price Times Totals
    85 29 29 71485 Mowing
    50 90 1 4500 Mulch
    35 280 1 9800 Plowing
    70 175 1 12250 Leaves
    75 140 1 10500 Fertilizer
    108535

    Expenses
    Wage 20000
    Wage 16000 Truck 5500
    Mower 2500
    Trailer 700
    Plow 1000
    Insurance 2500
    Bus Insu 800
    Mainten 2500
    Legal 500
    Misc 500
    Gas 11250
    Total 63750
    Gross 108535
    Expenses 63750
    Net 44785

    Net 89570 170 Mowing Accounts
    Owner 70000 100 Mulch
    Profit 19570 70 Plowing
    140 Leaves
    150 Fertilizer


    Two Crews, Two trucks, 4 Employees Total. Its a direct copy from excel so its kind of messed up. The gross/expenses categories were doubled to get the values at the bottom. In general, figuring 108535 gross per truck and 63750 expenses per truck. --- Owner is NOT doing any work ---

    For fertilizer, I priced that as 230 for 5 times, but just gave that as the gross number after the expenses. Just kind of took a stab in the dark at the cost of fertilizer, about 80 dollars for 5 applications per house? :help: Same with mulch, that 90 dollars is profit from it. Figuring 30/yard and 3 yards average per household. Also, the profits would have to get taxed, and I'd have to get healthcare for myself, so the 70000 isn't all it seems to be. The difference in employee prices is due to the one plows, the other is "seasonal." Figuring about 37 weeks for the 16000/yr one - approx 430 gross/week.

    The trucks at 5500 each would be leased vehicles or purchased vehicles and replaced as needed, same with the mower, just switch them out every couple of years (3), so that is an on-going replacement so the fees are always there. Gas may seem ridiculously priced, and I thought it was too until I did the math. 85 Accounts per week, figure 38 weeks with leaves/plowing, 8 miles per to be safe. This is 25840 miles per truck. Dividing by 12 for the miles per gallon, leaves me with 2153 gallons. Multiply that by 1.5 for equipment and what not, gives med 3230. Gas at 3.25 gallon to be safe, 10497. Okay, so its a little high. But it is something that really needs to be considered and is probably often overlooked.

    Since this is for two crews, I'd try, or would hope to get 4 crews, 4 trucks, 8 employees. More headaches, but this should double everything in the gross/profit section, and then after taxes and healthcare, my wage would be where I want it to be. Good Wage, no work. Get to enjoy the other things in life! payup :cool2:

    Thoughts or comments? :help: :)
     
  2. velocicaur

    velocicaur LawnSite Member
    Posts: 38

    By not doing any work, I mean physical work. Obviously, still have *alot* of work to do.
     
  3. PTP

    PTP LawnSite Bronze Member
    from Tulsa
    Posts: 1,383

    You forgot advertising. $100 per customer is a good #

    Start up will be more than you think. Here are some misc. things

    $1200 - handheld equipment
    $100 - bench grinder
    $1500 - computer and software
    $500 - new blower once the employee siezes one up
    $300 - new window for customer - rock
    $1000 - accountant fees
    $600 - new phone line
    $X - workmans comp/social security

    Having both of your employees quit on the same day - PRICELESS


    Also, you will not have 85 accounts right at the start. You might get there but it will take a couple of months. Some people will want you to start mowing late and finish early.

    Yeah, there are a lot of things that you missed but the overall plan is workable once you get things going.
     
  4. olderthandirt

    olderthandirt LawnSite Platinum Member
    from here
    Posts: 4,900

    Looks like you have a good start to a business plan, How many yrs are you figuring to implement the whole plan ? And have you figured in a churn ratio?
     
  5. velocicaur

    velocicaur LawnSite Member
    Posts: 38

    Right PTP, this is assuming once everything is up and rolling - going smoothly at that. Initially it would be solo op, then trying to follow that path.

    I'd hope to be maxed out solo after 2 years then get a help immediately. Let him do the work and I would stay in the office as you cannot grow effectively when you are doing the work yourself. Living would be at a bare minimum, but I think it has to be done. As the accounts build up, I'd slowly take them on/help out. Then get another helper/truck and he would do them solo. By this time I'd have 2 trucks/2 workers, not the most cost effective, but I believe if I reach this point, I can really focus on growing and promotion -actively answer phone calls, etc. Any more accounts can be added to the current, getting another employee in there when needed. If I were to start in the spring, I would hope for 4-6 years to reach the first premise. Then slowly or rapidly go on from there, depending how things work.
     
  6. tiedeman

    tiedeman LawnSite Fanatic
    from earth
    Posts: 8,745

    that is too much too read :)

    I perfer spreadsheets :)
     
  7. PMLAWN

    PMLAWN LawnSite Gold Member
    Posts: 3,535


    Yes, That is a big one.

    Question about fertilizer. Is that just fert 5 times or total lawn care. and where is the cost of product. What about spreaders,

    Are withholding taxes figured in the pay for guys.
    Your unemployment tax will be at the highest rate because you will fire most of the guys you hire.

    Figure about 5K of little extras per rig to get them set up.
    (racks straps holders tools spares gastanks handtools)

    Your mower cost seems way low. I would figure about $15.000 of mowers per truck with about a 3 year life so around 5K per truck per year.

    Your employees will,AND I SAY WILL, destroy about 5K a year of stuff per truck, (lost, broke, way faster wear and tear than you using them.)

    You are off to a great start with the numbers but I believe you will come out closer to 20K per rig.
    So with 4 rigs you will bring in about 80K a year
    Take away your rent for the place to run the business and all the utilities and you should still be above 60k

    Health care will probably leave you with about 50K

    For this, plan on cutting yourself once or twice a week on average as some days guys will be sick or quit and you will have to fill in.
    You will be the main sales rep so plan spending a lot of time setting up jobs and even more putting out the fires. Maintenance of an operation like this will be more than 25 hours a week so are you doing that or hire.
    You will need your own truck (about 5K) to do all the running around that it takes to put out the fires and pick up parts and supplies.
    Also add about 10 hours a week to do administration work

    Yes you can make OK money at just maintenance but plan on "not working" about 60 hours a week and even more in the spring

    Oh, I forgot another expense, about $10.00 a day in your favorite stress reliever

    Set up another 2-4 crews and hire a few to work the business and now you will be able to sit back, (a little)
     
  8. velocicaur

    velocicaur LawnSite Member
    Posts: 38

    Yeah, the cost of the fertilizer is planned in as stated above. I also figured with 2 guys, one would mow and the other would do the other things, therefore I'd only need one mower. So I could get by with an 8000 dollar Z, 2500 for 2 years, then sell it to a homeowner for 2500-3000. Not sure if that is feasible or not though. :dizzy: But you are right, it probably should be higher along with other things.

    I am not sure how unemployment work so I didn't figure that in. I will have to look at that. And for healthcare, I was only figuring 10k for myself/family. The surrounding companies do not advertise that they give benefits when they look to hire, so I figured that they do not offer it to employees. But if I get large enough, I would be able to absorb the costs.

    Slowly my operation is going to need 10 trucks to make it work. :cry: :p

    Thanks again for the input.
     

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