Sorry to interrupt the normal discussions, but I have a few questions...

Discussion in 'Lawn Mowing' started by rawx2, Mar 20, 2005.

  1. rawx2

    rawx2 LawnSite Member
    Posts: 14

    Czesc! I'm new to both this forum and the business. From previous experience on forums I know I'll get blasted for being a newbie, but hopefully some of you serious guys can help me out. Here's my questions and some information to explain my situation... Also, please forgive me if these questions have already been addressed in other posts...

    COMPETITION
    The county that I reside in and plan to start doing business - as a mowing company, not landscaping, not this year at least - has approximately 41,000 citizens with an estimated 'buying income' of around $1.4B. There are a lot of nursery businesses here, and as a result of that there are a lot of landscaping companies. I've talked to a few of the owners of the landscaping businesses and a majority of them said they prefer big jobs rather than just 'mowing jobs', obviously because the cost for their time, equipment, labor, etc. is substantial enough for them to have more of a need for higher paying jobs. Now, there are currently only five (5) 'mowing', 'lawn care', or 'lawn maintenance' businesses that advertise here.

    FINANCES
    I recently received a $6,000 inheritance and plan to spend $5,000 of that to get a business started. The other $1k went toward debt relief :|. I've looked into equipment purchases (ie mower, weed-eaters, air tank, trailer, etc.) and it seems that obviously, I can't afford anything that would be considered 'top tier' when it comes to equipment. I've set aside a small about for advertising, gas expenses, business licenses (already purchased for both city and county), the 'tax lady' salary, as well as a new pair of work boots :).

    ADVERTISING
    As I mentioned before, there are only five businesses that are advertising locally (in my county). The advertising rates are fairly cheap here compared to the other cities I've lived in. About $20 a week for a business card sized ad. I've also talked to a few companies here that do 12"x18" and 18"x24" yard signs, as well as truck magnets or the 'car top' signs (like the ones the pizza companies and/or taxi cabs use) and found one company that says they will beat anyone's price by 10%. This company seems the best option, not only because of the price, but the quality of the signs were a lot better than I expected. I've also purchased a box (1,000) of business cards and printed off a bundle of flier ads.

    COST
    To start, it will most likely be a 'solo' job. Once I become overwhelmed with the amount of customers, which I know could take anywhere from a month to a year, my brother has volunteered his services, but hopefully it will only be a few weeks :D *crosses fingers*. So, with that being said, I don't have the big of an overhead to worry about other than the gas cost, cell phone bill, and maybe the credit payments on the equipment depending one which direction I end up taking as far as actual purchases go. I have made my deposit to open up a business account at the local bank, and a PO Box for the business and contacted a lawyer to create a legal contract. I've looked into liability insurance in case something were to happen as far as debris damaging someone's property or anything like that and have a few candidates.

    SALES & BIDDING
    With my costs being lower than the bigger companies here my overhead will obviously be lower than theirs. I have previous experience in the business as an employee, so I sort of know the ropes. I'm not planning on going around low-balling all of the other guys around here, but it'll probably seem that way to most since my cost is lower than theirs and I'll be able to offer the same service at a much lower cost. I'm not getting into this to make friends, obviously, but to make money. I have three people waiting with fliers in hand - metaphorically speaking - to go out and try to land jobs for the company. I've spoken with around twenty others that are taking 'silent bids' on or around April 1st - 8th.

    EXPERIENCE
    When I first graduated I worked for a local mowing company for about two and a half years (I know, my 'break' from school lasted longer than I had thought, hehe). At one point I was basically running the company for this man because he had other things to do most of the time, so I learned the basics on route-planning, expenses, and most importantly, providing a quality service and appearance for the customer.

    EQUIPMENT
    It seems that the only options I have in this area as far as 'zero turn mowers' is concerned are the following:

    John Deere
    Cub Cadet
    Dixie Chopper

    With Cub Cadet being the cheapest I've found with a 50" triple blade cutting deck. The rest are either too expensive for me to even consider this year, or I'm not going to be able to acquire credit with the company because I've been told I "have no credit" on my credit report, which really has confused me, but that's a whole different story, and different forum for that matter ;).

    QUESTIONS
    Now to the questions. I'll try to make them as short and to the point as possible:

    1) With the limited options for equipment, would it be unwise to purchase a mower like the Cub Cadet RTZ? Keep in mind this is going to be brand knew under warranty, and basically only used for one year and then next year I will have the funds available to purchase some upgrades (meaning new 'top tier' equipment, if needed) and sell the one used this year.

    2) I've been looking at a trailer that would handle two mowers and still have enough room for an equipment/accessory rack for a fairly reasonable price, but, I'll only be using one riding mower this year, and will be hauling a push mower along for the areas I can't get to with a riding mower. Is the gas expense for hauling a heavier trailer going to be a big enough difference to discourage 'looking ahead'?

    3) For those that advertise on a weekly basis throughout the year, do you usually gain enough new contracts to compensate for the advertising expense?

    4) What should I expect as far as 'per dollar' percentage for worker's compensation and medical coverages? I know the rates will vary, especially considering the demographics, but what do the majority of you pay?

    5) What is the best way to 'estimate' a possible contract? Do you more experienced guys simply eyeball it and figure in the rest? Or is there a more scientific approach that one should take? One man I've spoken with said that he charges around $120 per hour, and considers his business account as an 'employee' that gets an equal share.

    6) What is the most 'customer-friendly' approach to billing? Do you guys bill by the month but take weekly payments? or is it all per month, by the end of the month?

    7) Final Question. Have any of you went 'door to door'? If so, was the success rate as far as turnaround sufficient? Or not enough to warrant advising someone to do this? I've read in a few places that advertising in the paper and placing business cards, fliers, and yard signs (at a customer's property) was the best way to go, mainly just 'run the ad and let them come to you'.

    (I omitted a few other questions and left my notebook with the other's somewhere else, sorry if the above 7 seem like a waste of time)

    Thanks in advance,

    I appreciate it.
     

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