My story...and questions about how to make it better!

Discussion in 'Starting a Lawn Care Business' started by Howie's Lawn Care, Dec 16, 2005.

  1. Howie's Lawn Care

    Howie's Lawn Care LawnSite Senior Member
    Messages: 512

    Hey guys,
    Last year was my first year doing lawn care seriously and I was still very unprofessional, but mainly because of my age and lack of experience. I never planned on getting a vehicle right away because I didn't do anything for a job. I had mowed 7 yards the year before and with no interest in going into the business. I waited until a month after my birthday to get my driving permit whereas I could have got it 6 months before my birthday. Because of this I didn't get my liscense until September 30th, 2005. That's practically thend of my mowing season. My mowing season ends right at the end of October. I lucked out and got 13 small condos right up the street from my mom's house and already had six lawns within a two block radius of my dad's house. I also mowed for a pasture who provided transportation. I also mowed my aunt's lawn.
    I bought four push mowers in the past fours years. I had a Farm and Fleet, Craftsman w/ Honda Engine, Snapper, and a Toro. This year, I took money out of a mutual fund I had started about 3 years ago, just enough to buy a Toro Personal Pace and a Toro a trimmer. Throughout the year I purchased another Toro Trimmer, Shindaiwa Edger and blower, Weed Eater blower and hedge trimmers. I also just purchased a new Shindaiwa trimmer and a Troy Bilt Snow Blower for $643.00 and have made a $295.00 return thus far. I have got my condo total up to 16 now. This is great because they are very close to eachother and many side-by-side. I have eliminated a few customers and now have a total of 21.
    My problem is that I charged horrible rates because of my lack of experience with money. My friends also thought it was good money. I ended up charging some condo residence $60.00 a month, $15.00 per cut, or $10.00 per cut. This is obviously bad business, but I couldn't change midstream. I am very good friends with all my clients and plan on charging $15.00 per cut or $64.95 a month, 4.33 times per cut price. I know that sounds cheap, but these are small lawns and I have two sets of four in a row and a three in a row and so on. Now that I have explained my situation, I have a few questions. I also plan on getting a new push mower and a 5' X 10' trailer. Trust me, the other push mowers have had their day or just plain suck.

    1. Should I finance a ZTR? I have two residentials where I could use it and a larger property in the country. I feel that a larger mower is a must. I could get a WB, but I think putting a bagging system on the back of a ZTR would pay for itself come leaf clean-up time.

    2. What is a good formula for developing a monthly price based on a percut price. I've been told 4.33 X Per cut price.

    3. How should I operate as a business. I have been a scrub this past year and would like to change that. I don't know if I can afford insurance until I know how much is going to be taken out in taxes. Which method would cost the least in taxes, claiming extra income as an individual or actually having a business setup where I am the owner and pay myself? How do the two compare? How much does it cost to have these things set-up?

    Also I make $152.16 payments on my Ford Ranger, a four year loan. The current payoff is around $6400.00. I just purchased it in September. I pay around $150.00 per month in insurance and about the same in gas. I plan on paying the truck off next year, no problem, unless my ruck needs some major repairs. I'm just trying to show you guys my situation so you can give me advice pertaining more to how I've been running the show. I know I've asked many stupid question in the past, but I am getting very serious about operating a lawn care buisiness. It beats the hell out of part-time ****. Also, just so you get an idea of our economy where I live, moat fast-food places pay $5.15-$6.05 and hour. I know the pay is alot better other places. I just wanted you to be able to relate more to my prices. Thanks for any advice and tips you guys can give me. I really appreciate your help, and have realized how correct your advice has been in the past.

    -Nick Howard
  2. South Florida Lawns

    South Florida Lawns LawnSite Platinum Member
    from usa
    Messages: 4,783

    No ZTR. I wouldn't.

    You said that a lot of your yards are small and compact, thats perfect for a walkbehind or Wright Stander. As for size 36''-48''. I would look for a used mower because as you already stated your not so good with money. If you do expand and figure out how to charge accordingly then get the Z, and use the wb for gated backyards. I never finance equipment, always pay in cash.
  3. dsmrolla06

    dsmrolla06 LawnSite Senior Member
    Messages: 305

    $15 does seem rather low, even if they are close together and on the small side.

    You probably have about the same season i have which will get your around 26-28 mowings for a residential account per year. Bill them over an 8 month period, and devide the number of expected mowings by 8.

    If you plan on being a business, insurance is a must in this industry. Its just as important as car insurance... Im assuming your under 18 so they wont even take as much tax as they would if you were. You can set yourself up as a sole proprieter and use your ss# as your tax id number.

    Also the fast food pay is irrelevant. Its the same here but you should still be able to charge more per yard. After all of your costs youll only be making a fast food wage if you keep them at those prices...
  4. Reliable Lawns

    Reliable Lawns LawnSite Member
    Messages: 95

    I agree with Florida, pay cash for your future machines. If you do not have the $ now, I personally would mow another year with what you have, replace/repair as needed and pay off that truck asap. By then you will have proved to yourself and creditors that you are responsible with $. I would build up some more larger accounts over the next year to justify a new ZTR or whatever you will need. And quite possibly have the cash next year to buy it. What Florida is saying is don't mow yourself into a hole.**** Get insured also..... a must..... Best of Luck
  5. bohiaa

    bohiaa LawnSite Fanatic
    Messages: 5,220

    if you raise your price's you can kind of jsutify it by saying to your self

    If these home owners went out and had to buy a mower, weed eater, hedge trimmers, fuel cans and keep fuel around there house. how much would it cost them....

    If you send out a nice letter saying something to the effect that fuel prices and inusrance are forcing you to raise prices 5.00 I think you will be jsut fine.

    Besides, you would be amazed at how many people would be willing to JUST help someone that's willing to try to help there selves. especially a young man like yourself.

    Good Luck
  6. Howie's Lawn Care

    Howie's Lawn Care LawnSite Senior Member
    Messages: 512

    How should I go about building up large accounts with a 21" mower. I wanted the ZTR so I could do just that. I planned on getting a 5' X 10' trailer, about the most I want to spend. I've been thinging about the 5' X 10' at TSC for $989.00. What should a 5' X 10' trailer w/ ramp cost? The pastor I mow for also had me mow his church, but they are now moving into a new building. It will have a nice yard and I would like to do it, but need insurance. I read that Erie was $500.00 per year. Is that price affected by age. If I could get the church's lawn, that would justify having the ZTR in my opinion. The church is on the way to the pastor's house. I could most likely pay my truck and ZTR off by the end of the year. Taxes will kill me. What percentage do you guys think will be taken out and how does it all work. Do you submit quarterly or yearly? Also, do I have to charge sales tax no matter how I operate? I just need to get set up as least expensive as possible. I can't really afford to deal with accountants and lawyers, but I want to be legal. I don't like being just another bum with a Ford Ranger even though mine is the loaded model. I'm kidding because my town is full of these people with no licensing, word of mouth only advertising, and a dixon ZTR (plus weed eater brand equipment which I actually have a little of if you read my signature). Can anyone tell me exactly how I can set-up my business. What are the steps I need to take? What fast food restaurant uses the best quality meat? Why do white people love Wayne Brady so much? Once again, thanks for all your advice.
  7. daveintoledo

    daveintoledo LawnSite Silver Member
    Messages: 2,587

    i sent you the link before with all the information to become a legal businesss in the state of ohio

    now get those prices up, your hurting the industry in your area by being so cheap...... those customers arent going to qant to pay any more to anyone else if you continue to do lawns at 10 or 15 dollers
  8. Doug Z.

    Doug Z. LawnSite Member
    Messages: 93

    to me, it sounds like you need to talk to an accountant. Talk to some people in your area and try to find a decent one. He may charge you 50 to 100 dollars for a consultation, or it may be free for new customers. but most of your questions are things that he should be able to answer pretty easily.

  9. bohiaa

    bohiaa LawnSite Fanatic
    Messages: 5,220

    And FOR Gods sakes take a pen and pad with you.......
  10. PMLAWN

    PMLAWN LawnSite Gold Member
    Messages: 3,534

    I do not think taxes will affect you at all. With all that you are buying and the money you will bring in, I don't think you will show any profit for a few years.

    This is your best move- Take some of the money from the mutual fund and go sit with an accountant for a few hours. He will help you add up all your costs and also tell you the best way to buy things and how to pay yourself.
    This will be the best return on money you will ever get

    It will cost you around $500 to $1000 to do this,
    It will cost 10's of thousands to not do this.

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