True cost to own my LCO...

Discussion in 'Starting a Lawn Care Business' started by Willofalltrades, Jan 4, 2007.

  1. heather lawn sp

    heather lawn sp LawnSite Senior Member
    Posts: 681


    Just a side bar about the philosophy of the business plan for plowing:

    Don't bank on plowing to be an profit generator
    If you make money at it that's great
    For the most part its a break even proposition at best. There are vehicle exp fuel salt repairs extra equipment.

    In short plan on a mowing season to make your year profit and salary. If you make money on snow, great, if not you'll survive without it.
     
  2. grassnazi1

    grassnazi1 LawnSite Member
    Posts: 73

    here's my 2 cents with all of the posts..... first, I read and write business plans for current living, the average plan for any business should be about 30-40 pages in length and should cover numerous topics in this order....
    1) Executive Summary (this is done last and just a summary of the other 6 parts of the plan simple 2-3 pages of paragraphs)

    2) Product/Services section- this is a break down of your services in a "menu" type formhighlighting what you do, how you do and what you are using to do it. this is also were you place your NAICS code if you need bank funding, go to www.naics.com to get your number for free)

    3) Marketing- (this is where you break down your market and see who you SHOULD be targeting in your area. break down your primary market-total market-target market and competition in this section)

    4) facilities/operations- (this is a break down of your capital equipment and/or start up equipment expenses and should be done at the LOWEST price to get you started with the business, I.E. equipment, office supplis, vehicles etc etc)

    5) sales & Marketing- (this is where you decide on a pricing structure AND STICK TO IT and include how you will advertise, where and what the cost will be.

    6) Management-(this section is like a resume, include your current experience, education, ANYTHING you have to show you are qualified to run this business, its difficult to get money to open a restaurant if you've been a Chevy mechanic for the past 15 years.)

    7) Financials- (this section needs to have these key elements. 3 year projected profit and loss, 3 year projected balance sheet, 3 year projected break even anaylsis, a cash flow summary and key business ratios. If you dont know what these things mean then you need to find an accountant you can afford to crunch the numbers. seek out SCORE from the small business development centers in your area, they'll do this for free and critize the crap out of you for wanting your own lawn business. its jsut what they do but gives you some good Devils advocate way to look at things.

    finally...... oncew your business plan is developed you will see exactly how much you can expect to see from your business for the first 3 years and I can guarantee you this, if you buy all new equipment, a new truck, your gonna be in the poor house. did you know the average first year income fo a solo lawn care biz is only 6-8k for the first year? thats full time. Think about that and do some google searches on the economy and see what the first thing 90% of home owners cut out when money is tight!

    So am i saying "dont open your own business" NO..... I am saying be smart about it and dont put more money into it then you project to make the first year. meaning, I wouldnt be spending more then your projected earnings and DONT BUY ANYTHING until you've worked on your business plan. go to the library and read a book on how to put a plan together, or better yet, pay me 1500 bucks and I will write it for you.

    sorry for the long post, but someone needed to explain what the "first step" is and that is a BUSINESS PLAN remember if you "fail to plan......then you plan to fail" those are VERY true wordsand will either keep you in business or keep you looking for ways to get another job to pay off your debt. So my new guy tip is for you to start with a business plan.

    Things to do......FIRST!
    -start your business plan like yesterday.
    -cut all your current monthly expenses by as much as possible.
    -try not to finance anything, buy it out right with cash/savings.
    -advertise, advertise, advertise..... without it, your done!
    -form a legal business structure with INSURANCE.
    -buy equipment you NEED for your current customers and grow slowly
    -start being professional, change your mindset now, it will be harder later.
    -stay positive, opening a business is DEPRESSING, so prepare yourself!
    -focus personal time and business time. there is a time and place for both.
    -contain your excitement, on your first day...nothing is going to go right!
    -most importantly, learn how to listen.... show your customers that and you'll be in business longer then anyone else here on this site with more work then you can handle.

    and as a side note.... things to keep in your truck from the first day.....

    -list of emergency contact info in a binder, what if you faint from the sun and no one knows who you are?
    -bee spray, you'll thank me later.
    -first aid kit with burn spray.
    -misc hand tools in a tool box for easy/quick repair stuff.
    -can of fix a flat or tire plug kit.
    -road flares, not for you but the car accidnets around you.
    -folder holding all insurance documents and things.
    -a clean work shirt, new customers will always call or want you to come over when your done with the current job.
    -sun tan lotion, bug spray, whatever you need in your area.
    -cooler with bottles of water or gatordae in it.
    -a digital camera or polarod to take pictures of homw owner damage if they arent home and they think you did it!
    -extra spools for trimmer/trimmer line. blades...etc
    -extra contracts, service agreements, business cards, whatever you use.

    again....sorry for the long post but i felt these things will be beneficial for all of us to make sure we have for a healthy business start.
     
  3. SCAG POWER

    SCAG POWER LawnSite Senior Member
    Posts: 343

    If you realy want to get busy. check out the low cab forward trucks with the 16 ft landscape bodies. I would not waste that kind of money on a ford by the time you get too the secound year way to many miles on it too do any thing with.

    With low cab forward , you elimiante the need for a trailer, mess to drage around with you. crew cab makes it easy fro all to get in and out . Mpg from what i have seen from other oweners , is better that you could get with F350

    The last time i priced one they wanted $ 38,000. for the truck with the body on it then it would be extra for the racks and the tool boxes to be mounted on it. Maintance is ever 10k miles or so, it very open when tilted so the shope can get to it fast.You meven can use it too haul trash, it just does not dump.

    Check out these befor you get in too deep.I hope to put one on the street mid season this year.:waving:
     
  4. fiveoboy01

    fiveoboy01 LawnSite Silver Member
    Posts: 2,988

    I like it a lot. Pulls my trailer really well. Mileage seems to hover around 9.5-10.5 pulling the trailer, and 11-13 unloaded. Yeah it's a gas hog, but it's a big truck.

    For comparisons sake, the other truck I used was a '97 F150, 4.6 2wd. It did the job but not as well. I think that motor was rated around 60hp less than what I have now.

    The best difference? Stopping ability is WAY improved with the 250. 4 wheel disc brakes and the trailer brakes hardly have to work to stop the rig:)
     
  5. Willofalltrades

    Willofalltrades LawnSite Bronze Member
    Posts: 1,000

    I appreciated every word of it. As of now I am going over my business plan. Thats going to be my project for the next week. Also, thanks for the list of things to keep in the truck. I'm copying your post and saving it in Word as a referance. And I've said it plenty of times, I've been in business. I made my $6000 this year. I'm just posting this in the Newbie section because I have not executed a plan like this to GROW (not start) before.
     
  6. Willofalltrades

    Willofalltrades LawnSite Bronze Member
    Posts: 1,000

    I wouldn't even think twice about it, if I didn't live in the snow belt.
     
  7. Willofalltrades

    Willofalltrades LawnSite Bronze Member
    Posts: 1,000

    One dumb thing of me was I didn't include mulch jobs, fertilization, spring/fall clean-ups. Personally I believe I can gross close to $10,000 a month. I have worked out my rates for various services (except fert., I gotta figure those out). They are fair yet, not over or under the norm. I will pay my self by the hour and then what ever is left goes into an account for the business. So $10,000 - $3200 (expenses)- $2000 (myself) = $4800 a month in my business account. That should hold me good over the winter. Even If I gross $8,000, thats still $2800 in my business account.

    If I don't think I can make enough money plowing for my self I have a Larger company I can get a route from. Yes the salt and garbage are hard on the truck (I know where I can get the underside of the truck coated in oil to prevent rust, yea its messy, but it works). Yet I don't or rarely have to worry about down time and constantly breaking stuff. I know guys that plow with their 1998 Dodge rams and 1995 ford Bronco's. Nothing but down time and head aches on their end. Plus, I will have had the vehicle from the beging so I know some yahoo didn't constantly beat the truck.
     
  8. Willofalltrades

    Willofalltrades LawnSite Bronze Member
    Posts: 1,000

    I also forgot aeriation, overseeding, Firewood delivery, trimming hedges. Im not just mowing for 3 days a week. I plan to be working for 6 days a week.
     
  9. PSO058

    PSO058 LawnSite Member
    Posts: 62


    Where did you get your truck from?
    I am considering upgrading and always looking for a good deal. You got the truck I am looking for.
    Thanks
     
  10. tjsquickcuts

    tjsquickcuts LawnSite Senior Member
    from Atlanta
    Posts: 943

    Please dont keep your hopes up on those numbers....Because you forgot about so many other things that will eat into that $4800 a month in your business account. What are you true cost of goods??? Whats your Total General and Administrative Expenses??? I am not saying you cant do 10k a month, but it takes a lot of planning....I have about 15k to 18k in total expense monthly.....That covers everything....cost of good, payroll x 6, repair and maintenance, loans, Mortgage on office and yard, advertising, etc.....My business Nets about 8k to 10k monthly, depending on how many install we are able to do....My Salary is $2500 monthly, and if anything else needs to be purchased either for my home or business, I just purchased it through My business so that I can write it off at the end of the year.....My first year, What I had on paper looked so good, but I was no where near what I was expecting to net.....Good luck on 2007!
     

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