Please excuse my ignorance!

Discussion in 'Business Operations' started by clallen03, Feb 5, 2006.

  1. clallen03

    clallen03 LawnSite Senior Member
    Messages: 514

    I am just starting in the landscape business this season and I have been reading a lot of threads. One thing that has been constantly jumping out at me is "the cost of doing business". Now this sound self explainatory, but Im having trouble finding out what my cost of doing business is. Can some on help me please? I have nothing to hide so I'll lay it all on the table so you'll can tell me how to add it up.

    Cash transactions
    1993 F150XLT $2100
    6 x 12 trailer 1100
    36" Exmark metro 1200
    Stihl 550 Blower 400
    Total $4800

    Stihl FS100 trimmer $290
    Stihl FC85 edger 290
    Total $580

    I plan to also finance some hedge trimmers also.

    Im currently shoping around for insurance but dont expect to pay more then $400 a year (Im a solo operation, no workmans comp.).

    I know that you have to add gas in there somewhere but I dont know where. Im in need of some help before the growing season starts because I need to to know what I must charge in order to make a profit.

    Thanks in advance for you help.
  2. i_plant_art

    i_plant_art LawnSite Senior Member
    Messages: 558

    how much do you pay monthly on the equip. you have financed? what is your fuel expense? insurance for the truck? utilities @ the shop ( ie comp time, lights, phone etc etc) this could also be at your home. how much of it goes towards your business. howe much do you spend on supplies each year? how about repairs? office supplies? internet service? etc etc .... there are so many things that go into find out what you need to "break even" how many hours a week do you work or how many days? insurance is another. there are also many others that would fall in there as well.
  3. clallen03

    clallen03 LawnSite Senior Member
    Messages: 514

    The minimum payment on my financed equipment is about $30 (Im no sure because I havent got my first bill yet).

    I cant tell you my fuel expense because this is my first year in business and the growing season hasn't started. Im looking at around 20-30 accounts for this first season, can you'll help me with normal gas expense. Right now gas is $2.25.

    Im estimating $1000 a year, I haven't got my insurance on the truck yet because I wont be driving until the season kicks off.

    I haven't had any repairs yet and my shop is in my garage. Im not using any additional utilites.

    I plan to work about 25 hours a week.

    Im giving you everything I can just to get a ball park figure, so when the its time to rock and roll I will be prepared. I hope this help.

  4. YardPro

    YardPro LawnSite Gold Member
    Messages: 3,570

    add up all your expenses per year, and divide by the hours you think you will work... that is your overhead recovery number... then add what you need to make for you. that's your billibale rate...

    for equipment ( trucks, etc..) divide the purchase cost by the expected life in hours (most equipment is about 1500 hrs). We multiply that by 1.25 and that gives us the operation cost (figures in repairs etc).. that is our cost for using the machine
  5. scagwildcat

    scagwildcat LawnSite Senior Member
    from nw. ct.
    Messages: 507

    its not just your truck that needs id???
  6. Green-Pro

    Green-Pro LawnSite Bronze Member
    Messages: 1,420

    Cost of business should include everything you have to lay cash out for in order for your business to support itself and turn a profit. Think of all that you will need to do to start a business, the physical/material items are part of that and a good start. However you will need to take into account insurance (vehicle & commercial liability, health & work comp), licensing, registering fees, fuel costs, maintenance costs, materials to actually get the work done ( fert/pesticides, plants, mulch, border, wall block, whatever, etc.), wages, office supplies, advertising, electric bills for shop, maybe shop rental?, cell phone. Well I'll stop for now, but you should get the idea now. Think or make a list of all green industry services you wish to provide and all that you will need to be successful providing these services with. I would strongly recommend doing this and then researching all you will need to enter into business ownership to be legitimate.

    This is just a quick laundry list, in no way complete, and is as an example only, every business's cost will likely be varied from one another

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