3rd year business expansion

Discussion in 'Business Operations' started by Chvysb350, Apr 16, 2019.

  1. Chvysb350

    Chvysb350 LawnSite Member
    Messages: 79

    I have reached my third year of mowing and I feel like I want to hire my first helper. Does anyone out there know about how much in terms of percentage, that an employee costs above their agreed upon, hourly rate.
    An example...here in Austin, I am seeing lawn service, groundskeeper positions are paying $16 or $17 an hour plus benefits...what do the benefits cost me? There has been a recent surge in the pay scale here. I had been doing a part time deal with people at $15 an hour, but I cant get anyone dependable like that.
    I am also trying to find ways to drop my operating cost. I hate my Scag mower after seeing year ones cost per hour of operation. That thing is killing me @ $ 22.95 an hour. To be fair, a quarter of that is blade cost. But dang, that is an expensive mower to run. I am wondering if I would be better off running a heavy duty homeowner mower and just replace the bearings every 100 hours. The only advantage I really see with the Scag is that it discharges like a champ. It weighs too much, drinks a gallon per hour, parts are expensive, and it has broke down 4 times in its first year. (3 PTO switches and a hydraulic leak by 300 hours)
    Has anyone out there run less expensive equipment with good success? I could have bought 2 homeowner units and had money left over, for what I paid for this Scag.
    Any thoughts tied to employees or more efficient equipment are welcomed. Thanks
     
    Cam15 likes this.
  2. Oxmow

    Oxmow LawnSite Bronze Member
    Messages: 1,017

    You aren't the first I've heard of with the Scag PTO problem. Even to getting a bad one out of the box.

    I have Hustlers. They are expensive too. I've run them for 25 years. Had some Toro's in there too. Obviously you want something maintenance free but they all have their quirks. I replaced an engine on one last year, because one of the valves just gave up, broke the head off and floated into the cylinder and destroyed the engine. No lack of oil or anything like that.

    No matter what you buy parts will always be expensive. 200+ for a starter, 450+ for a blade clutch...and try getting tires or replacing a wheel.
     
    sjessen likes this.
  3. TPendagast

    TPendagast LawnSite Fanatic
    Male
    Messages: 16,008

    Employees are roughly 20% more than their wage

    So 15 = 18

    Figure 17 as the wage and 22 as the cost
    Gives you room for raises.

    The mower shouldn’t cost you $22 an hour
    It’s more like 8
    You have to figure the costs over the life expectancy of the ownership of the mower

    That’s either the length of the lease, the payments or however long it takes you to dwindle the yearly deductions.
    So for example if you took all 100% deduction in one year (some years the tax law let you do that) then that time frame would be the hours that one year used.

    If the machine costs 10k
    And you run payments for three years
    And you run 600 hours a year
    That’s 1800 hours, that’s $5.55 an hour
    Fuel at $3 an hour
    Consumables like blades and belts don’t mount to much

    Repairs are covered (generally) under warranty the first year.

    After three years you don’t pay on the loan anymore, but larger repair costs pick up so you still figure your costs between 8-10.

    With an employee at 22 and a mower at 10 throw in insurance, taxes
    You can see why there’s no sense to people saying they can “make money” at $35/hr
    They’re cheating somewhere
    Paying cash, not paying taxes
    No insurance..
    Somewhere
     
    Mumblingboutmowers and Cam15 like this.
  4. OP
    OP
    Chvysb350

    Chvysb350 LawnSite Member
    Messages: 79

    I bought a Hustler first. It didn't make enough suction to get these spindly weeds cut. It also lost all 3 deck bearings and one pulley bearing at 80 hours. To be fair to Hustler, it was a homeowner model. I did try out a commercial unit before I bought the Scag and was unimpressed. The Scag rep brought me a unit to try out, it cut like a champ. He was all about service. Sold. I paid $10,000 for my Scag. The dealer never has time to fix it, so I have been making repairs out of my pocket. Year one ended on 300 hours. First set of belts was already toasted. I am excellent about keeping my stuff maintained, but the Kawasaki engine has already started burning a bit of oil. That is super frustrating. It makes me want to build my own mower. I was a mechanic for 12 years, there is no excuse for these mowers costing so much and having so many issues. It frustrates me to no end...but that is the business. Lol
     
  5. Cam15

    Cam15 LawnSite Silver Member
    Messages: 2,079

    Sounds like you may of just gotten a lemon, If you wanna save on fuel try a walk behind.
     
  6. OP
    OP
    Chvysb350

    Chvysb350 LawnSite Member
    Messages: 79

    I need to post my actual figures for the first 300 hours on this mower. Everything is covered under warranty, but who has time to drive an hour to drop it off, wait 2 days and drive back another hour to pick it up. I have paid for the repairs out of my pocket. Blades are killing me because we grow rocks here. It will drive you nuts picking up rocks over and over. I bought 15 sets of blades last year and yes I sharpen them.
    As to the hours. I only ran the machine for 300 last year. I get what your are saying about the long term. But as for right now, I am taking what I actually paid for the mower, air filters, oil filters, hydraulic filters, oil, fuel, a set of belts, parts and blades and divided it by 300 hours. I was floored by the outcome.
    As I get better properties and the machine gets more hours, the cost of the machine will go down, until I have to start replacing big items.
    Nope,no way for people to make money @ 35 an hour. My health insurance cost $500 a month, business liability is $160 a month and my truck guzzles fuel. Just those 3 expenses eat up a good amount of profit.
     
  7. OP
    OP
    Chvysb350

    Chvysb350 LawnSite Member
    Messages: 79

    I am tempted to go with a walk behind. I have a belt drive Gravely, but it seems to require 2 passes to get anything cut. I am also looking at the new electric ZTR but cant get any real pricing.
     
    Cam15 likes this.
  8. OP
    OP
    Chvysb350

    Chvysb350 LawnSite Member
    Messages: 79

    I should also mention that I dont really cut grass here. It is more weeds. The Scag cuts really well but I have to slow it way down to get it done in one pass. I can clean cut 3/4 acre per hour. If I speed it up I can double pass it but it actually takes longer and of course, uses more fuel. The Gravely wont cut clean in a single pass, even on 1st gear.
     
  9. Mumblingboutmowers

    Mumblingboutmowers LawnSite Senior Member
    Messages: 564

    If it's taking you an hour to cut 3/4 of an acre something is seriously wrong. Are your blades sharp and spinning fast enough?
     
    Mow-Daddy.com likes this.
  10. OP
    OP
    Chvysb350

    Chvysb350 LawnSite Member
    Messages: 79

    You have to keep in mind that where I am at, a lawn usually consists of weeds not lush grass. If it were St. Augustine I could probably cut over an acre an hour without leaving "stragglers", but most of it is various weeds, mixed with blue stem and occasionally some bermuda. One other thing that kills the clean cut is the height of the mow. Most of my yards have plenty of rocks. 3" is as low as I dare go, and even then I am catching rocks.
     
    Cam15 likes this.

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