First Year Overview:

Discussion in 'Starting a Lawn Care Business' started by Zach's Lawn and Landscape, Sep 7, 2011.

  1. Zach's Lawn and Landscape

    Zach's Lawn and Landscape LawnSite Member
    Messages: 2


    I started my business this past spring of 2011 and have really enjoyed this business from the start. I started with the intent on only using a push mower and had 5 lawn contracts lined up before the start of the season, none of which were very large in which i would be forced to use to a rider. I also offer mulch spreading & delivery, edging, weeding etc.. I have also recently dabbled in selling and installing landscaping lighting.

    However, as the season started and my name started getting around I quickly grew to 17 weekly lawn contracts and around 5 lawn contracts that I provide lawn maintenance only when asked (vacation lawns essentially). So I bought a cub cadet rzt 50 inch zero turn and invested in a stihl fs 110 4 cycle mix string trimmer and even employed around two people on landscaping jobs, I spread close to 50 yard of mulch thus far and did numerous edging and flower bed cleanup.

    So it sounds all great and dandy but I am looking for some advice. I charge $25 dollars per hour to mow lawns and $10 additional dollars for string trimmers. Around 14 of my weekly contracts are lawns that take only an hour, thus I am only getting around between $25 dollars and $40 for a majority of my lawn and much of my contracts are not spread out the houses are near each other so I can just run my mower from house to house.

    As for landscaping I charge $12.00 per hour if I am working alone and $10 additional dollars an hour per person I have working for me, which I pay my employees $8 an hour for landscaping jobs because they lack the experience.

    So in a nutshell, I am looking for advice on what I should charge for next year. I am only 21 years old, a full time college student and also work a part time job, so my schedule is always a mad house, but I enjoy the pace of it. So any advice or criticism would be great. I spent a lot of money on equipment this year between my mower, trailer, trimmers, and blowers just around $5,000, but I have made it back. Next year I am expecting to have around 30 weekly lawn contracts and many more mulch jobs. So once again I would like some advice and criticism so I can better myself for next year and be more profitable.

    Zach's Lawn and Landscape
  2. Stillwater

    Stillwater LawnSite Platinum Member
    Messages: 4,889

    1) check in with your town hall or office and get registered to do business in town this is sometimes called a DBA

    2) call your auto insurance company to see if they offer liability insurance if they don't offer it they will tell you who does and where to go

    3 significantly raise your labor rates

    4) stop charging hr rates for mowing and set flat rates that include the trimming

    5) charge higher rates for the will call accounts

    6) write a business plan

    7) save 15 or 20% of all invoicing

    8) be honest polite, and forthright with every one you deal with regardless of the situation

    9) just a guess hear but prepare to loose at least 10% of your current customers after your rate increase.

    The actual labor rates you need to charge is contingent upon your needs lifestyle and current obligations and whats written in your business plan and what your market will tolerate, this could take time.

    I don't understand the physics of you being a full time student, working a part time job then taking care of your current 17 accounts how is this possible?
  3. ReddensLawnCare

    ReddensLawnCare LawnSite Bronze Member
    Messages: 1,651

    LEARN YOUR COSTS...If you are charging 25/hr to mow, I can promise you that you are not really making 25/hr, or even 12/hr for landscaping. Think about taxes, depreciation, wear and tear, phone bills and other utilitites if ur paying them. Hope that helps. And if those are your rates, that might be part of the reason you are getting so much work, but it could also be you have great quality. How much do you charge per cubic yard of say...double ground hardwood?
  4. calvinslawnservices

    calvinslawnservices LawnSite Senior Member
    Messages: 836

    I would also charge by the yard for mulch and know how long it takes to spread it. Because I can usually spread 1.5/2 yards an hour by myself depending on distance, plantings, and even weather. I charge $20/yard/person for just labor.
  5. Dr.NewEarth

    Dr.NewEarth LawnSite Bronze Member
    Messages: 1,476

    If I pay $10.00 per hour here, I also need to add 21% for basic government deductions
    like Canada pension plan, federal and provincial tax, and workers compensation.
    If the employee has medical dental these deductions increase to I always add 27% to my $10.00's per hour anyways.

    Then the overhead includes a percentage of your house rent, because you have to have office space if you run a business, also storage and a repair area....overhead includes the same percentage of your electricity, phone, gas etc, plus all of your cell phone, advertising, work truck costs and trailer, gas and insurance, liability insurance ($800 per year for my liability insurance)
    new equipment costs, repairs, parts...what else?

    Check with others in your area for percentage amounts for the above, as they can differ from state to state and province to province.

    You have to add up what your entire costs for doing business will probably be for the entire year. Calculate how many hours you work in a year, and then divide the overhead into the amount of work hours and then divide that percentage into your hourly pay, including yourself and how many employees you have.

    If you have more employees on payroll, then the companies overhead costs are spread out more. This is how larger companies can some-times bid less and still make a profit.

    so, $10.00 per hour + 27% plus my overhead this year is $6.53 per hour of labour

    Without making a profit or making a return on my investment on equipment,
    I need to collect at least $19.23 each hour to pay one employee $10.00 an hour.

    So, for example paying myself $25.00 per hour, I would need to bill the client
    $25 plus (27%) is $6.75 plus my established hourly overhead of $6.53

    To pay $25.00 I need to collect at least 38.28 per man hour

    There are many other posts that you can search for here, on this very subject.
  6. Zach's Lawn and Landscape

    Zach's Lawn and Landscape LawnSite Member
    Messages: 2

    Well thank you all for the great advice. I usually low ball when looking at hopeful lawn contract which from what I understand is one of the biggest beginner mistakes, so I just picked up another weekly lawn contract until the rest of the season and gave her an estimate on the mowing the property by the job not an hourly rate and also included the string trimming in the price.

    And yes it is very hard to manage balancing my part time job, college, and the lawn business, very long nights at the library catching up with homework and my equipment and my trailer never leave my truck literally because I am constantly on the move.

    Where can I get door hangers, I would like to make them myself but am not sure if or where I can purchase the paper to do so. Or can anyone recommend a site to get them made at as well for business cards being made.

  7. Dr.NewEarth

    Dr.NewEarth LawnSite Bronze Member
    Messages: 1,476

    Any print shop will do it. Do you have a Staples? Their printing is reasonably priced.
    You could also look at Stapes for a heavier paper and print your own door hangers, although you might want to use painters masking tape instead of cutting a hole.

    Also, if you look up top of this site there are places that advertise door hangers and every-thing else we could need to run a successful business.

    Good Luck
  8. lifetree

    lifetree LawnSite Fanatic
    Messages: 5,369

    Good list of items for his consideration !!
  9. fivestarlandscapes

    fivestarlandscapes LawnSite Member
    Messages: 62

    Those rates are extrememly cheap. You would make more money working for someone else at those rates. Those rates explain the quick growth of accounts. Heck, when I was 21 (four years ago) I was making $15 mowing and landscaping for some one else and using all of their equipment. Your labor rate is 1/3 to 1/8 of what most other companys would charge. Mowing and trimming should be around $45-$80 a man hour depending on overhead, distance apart, etc.
  10. Wilbuckeye21

    Wilbuckeye21 LawnSite Member
    from Ohio
    Messages: 20

    The paper for Door hangers is called "card stock" it comes three hangers to a sheet. make the hanger put it on a zip drive and take it to kinkos, fed ex or whatever you have....BOOM!

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