Starting up my first business!

Discussion in 'Starting a Lawn Care Business' started by Jlin428, Feb 2, 2013.

  1. Darryl G

    Darryl G Inactive
    Messages: 9,500

    Yup, Kelly has it right. That's why I suggested doing stuff that doesn't require a season-long commitment or a lot of equipment. You could even get another job and supplement your income doing yard work. My son was only making $15 to $20 an hour but it adds up a lot faster than minimum wage work. Basically he was working as a domestic employee on an hourly basis rather than as a contractor.
  2. Set Apart Lawn Care

    Set Apart Lawn Care LawnSite Member
    Messages: 192

    Are you starting a business are trying to make some side cash? As these guys have been saying, building a business may be really hard to do and have a college schedule, the timing doesnt fit. However if you just want to make some extra cash mowing lawns can be a great way to do that. You can schedule your classes to be monday, wednesday, friday only, or be off by noon, or go to night classes, and still give yourself plenty of time to do this.

    Just mowing lawns all you need is a mower, string trimmer, blower, hedge clippers, and some basic tools (wheel barrow, shovel, rake, etc.) and you can make some good money.

    Even if you only work 2 or 3 days a week you will make more than your typical college job, atleast during the spring and summer.

    Some tips, only advertise to small yards. Dont fall into the trap of wanting that big money job when you dont have the equipment for it. Its a waste of time and you'll never compete with the price or quality of the bigger companies. They however will have a hard time competing with you on small yards that only sized for a push mower. They have much more overhead and less personal service.

    Do some research and find a good, affordable place to get door hangers. I used 3000 when I got started. Not the best quality, and the designs are generic, but I got good results for the money. I had 30 clients that first year off about 4000 door hangers, and lots of one time jobs.

    I wouldnt worry about all the legitimate stuff if you are just making some cash while in school, though lots of guys would disagree. I would to if you were starting your career with this thing. If you are starting a career business here that'd be good to know as it would change the nature of a lot of my advice. There are a lot of down the road things to consider, such as future overhead, pricing, taxes, insurance, branding, etc.
  3. Darryl G

    Darryl G Inactive
    Messages: 9,500

    Another point for the OP. A lot of guys do this stuff under the table for cash, thinking they'll make out better that way. Not only do you open yourself to legal liabilities and prosecution for tax evasion, but you lose the ability to write off your expenses. You can still operate a cash business and track your income and expenses and you only pay income tax on the difference between the two (net income). Your tax rate is going to be low and you many not even have to pay anything after expenses and deductions. In my state lawn care services are taxable and they will come down on you really hard for not paying the sales & use tax.
  4. Jlin428

    Jlin428 LawnSite Member
    Messages: 10

    Thumbs UpFirst off, I thank everyone for their input. It is going to help me alot! Thumbs Up

    I want to first establish that although I am a college student, I still live at home and commute to school. Some of you were concerned that commuting to college would put a damper on my flexibility for running a business, but this is not the case. I will be available year-round to develop this business. I might not be rich or have the finances according to some people's standards, but I am determined to make this happen. I am not taking classes this semester due to financial reasons, I plan on using that time to devote work towards starting up the lawn business, which brings me to my next point.

    I think that the term "lawn business" means a lot of different things to different people. I am not planning on starting out with high-grade commercial equipment, licensing, insurance, and all that other legal mumbo jumbo, but at the same time I am not starting out like a 13 year old kid trying to save up money for a video game. I am not expecting to start out at the top, I just want to make the best from what I have now and develop the business the best I can as it moves along. I plan on doing this in a professional manner, and by setting up budgets and keeping track of "the books" to organize my cashflow.

    That being said, I am going to start with some responses. I cut the quotes a little smaller to save room and not post a huge comment.

    ^Yes, I agree that there is alot of research that needs to be done. Thats kinda why I turned here, because Im not exactly sure where to start hahaha. I will definitely make purchasing a commercial push mower a priority, as well as a blower. I did not know that the difference between commercial and homeowner was so crucial. I will probably start off with mostly homeowner equipment, and then upgrade as time goes on.

    I just want to reinstate that my budget will be BETWEEN $700-$1,500, not $700 tops. The reality is that I'm a broke kid in college, and that I cant just come up with a couple extra thousand dollars, I am determined to make it happen with what I have. But I really do appreciate the realism, I didn't take it as discouraging at all. I want to be made aware of big issues like my start-up money before hand, instead of just finding out about them as I go along.

    ^This is something that I have little knowledge of and need to learn about but don't know where to start.

    Right not I don't know much about having licenses and legal documents or different types of insurances associated with a lawn business. To be honest, i don't think I can fully afford these things at the time. Down the road when I am somewhat stable with the amount of work I have and need to start hiring people, that is another story. If someone else gets hurt and decides to sue me I would be screwed basically. For now I think I am just going to take the chance and run it all under the table, though I know this is frowned upon.

    ^That is a good idea, but I honestly would rather not. One of the reasons why I am doing this is to be my own boss and do something on my own. But if it doesn't go as well as I hope, I think that I will take this advice and look for another job with another local company.
    But yes, I am young with no family or mortgage (thank god).

    ^Thank you for this, because this is exactly the course of action I am trying to take (but with a trailer and my own mower). I am fully aware that I will be working "at the bottom" of the food-chain as far as lawn businesses go, we all need to start somewhere. I plan on working from the bottom up so that I can learn as much about running a business as I can starting from the bottom levels.

    ^You hit the nail on the head, I am right on the same page as you with these statements.

    ^I agree to an extent that having insurance is a good idea, but being in my shoes I don't think I can afford it and don't think its worth it when its just me myself and I running it.

    Like I stated earlier in this comment, I am living at home and commuting so the college break time is irrelevant in terms of running the business.

    Working as a domestic-type employee wouldn't be a bad idea, but making money isn't my only concern. Of course I want to make as much as I can, but I honestly enjoy mowing lawns and its one of the main reasons why I am choosing to start a business in this field. I want the mowing to be the primary premise of my business, and the other stuff would be the "side work" stuff to make extra money doing.

    ^I appreciate your input, but like I stated earlier I am not required to leave my hometown. I will be here year-round and school won't affect the business much at all.

    I would like to hear your input on the low start-up budget and the steps that are demanded to be legitimately running a company though.

    ^The thing is, I am looking for something with a season long (or more) commitment. I already have a job which I use to support myself on now, I would like to replace hours there with income from the lawn business. Also, in summertime my job offers around $15 an hour, I would like to at least meet but hopefully exceed this number.

    ^Basically, I want to be doing a combination of setting up of both setting up a business and making some side cash due to my current budget. I want to go about it professionally, though I don't have the funds to purchase great-quality equipment, insurance, legal stuff, ect. Basically for now I am trying to do what you mentioned when you listed what I need for "Just mowing lawns".

    Over time, I would like to develope into a fully legit, professional business but for now I am going to work with what I got, but doing so in a way that I can eventually transform into the earlier mentioned legit business.

    ^The thing is that I would like to not have to do a under the table operation, but I think that it is the best choice for me now due to finances and lack of other workers. I hear of other people running their lawn business under the table, and its been recommended that I just do it that way for now by most of the people that I have talked to about it (including my mother, a professional accountant).

    If you wouldn't mind, could you elaborate and explain some tax stuff associated with running this type of business? I have almost no knowledge with that stuff. The terms "tracking income and expenses" "net income" "tax rate" "deductions" ect. are as good as chinese to me! hahaha. :dizzy:

    Again I would like to thank everyone for their input!
    It is all helping me out a lot. I do not have a background in this field, it is all new to me. I am willing to take the effort needed to teach myself everything that I can learn about running and operating a lawn care business, and I can already tell that this site will be a great resource and tool to help me along with the process!

    Also, sorry for the wall of text.

    :drinkup::drinkup::drinkup:Thanks again! :drinkup::drinkup::drinkup:
  5. jrs.landscaping

    jrs.landscaping LawnSite Silver Member
    from Maine
    Messages: 2,763

    I know you think insurance is too expensive. What happens if you severely injure someone while mowing? If you are broke now think of what will happen if you have to pay six figure medical bills for someone else.
  6. CreativeLawncareSolutions

    CreativeLawncareSolutions LawnSite Silver Member
    Messages: 2,017

    I pay $400 a year for a 2 mil policy. It's pretty darn cheap.
  7. Darryl G

    Darryl G Inactive
    Messages: 9,500

    I'm out...I don't help guys who don't want to run legitimate businesses. And if you're mom is a professional accountant, I'd ask her about that stuff. Best wishes though, and I really mean that.
  8. Jlin428

    Jlin428 LawnSite Member
    Messages: 10

    You have a good point, and I agree with it to a certain level. The way I look at it, since I will most likely be running it all by myself for now, I feel the likeliness of somebody getting hurt is reduced. There is always a risk with everything one does.

    When it gets to the point where I need to hire people to work for me, that is another story. You do have a point, I really shouldn't risk it especially when it comes to other people. Getting insurance sounds pretty serious from the feedback I have gotten so far. Like I said, it is something that I would like to have, but I am just not made of money (yet).

    Wow, that's really not that bad at all. If you don't mind me asking, how big is your business? It sounds like 2 mil of coverage is a pretty high number for a 1 man business. I will look into this with my current insurance company though. Thanks!

    Well thanks for your input, I really mean that as well. Just to let you know, its not that I don't want to run a legitimate business, its that I don't think I can afford to run a legitimate business. After I make a little bit more money, I would like to purchase insurance and all that stuff, but with where I am at now I need to utilize every dollar I have and basic equipment outweighs insurance to me. I understand where you are coming from, non-legitimate businesses are frowned upon and unfortunately I am going to have to deal with that negativity until I can afford it. Gotta do what ya gotta do man.

    Also, I do plan to ask my mom on tax stuff, I just figured that since you are in the industry you might be able to give me advise from a business point of view. No sweat though.
  9. perdonlandscaping

    perdonlandscaping LawnSite Member
    Messages: 1

    I am a college kid who started my business two years ago under the table with one customer, no insurance, no trailer, and little experience, but I did have a truck, and I bought a small push mower, a handheld blower, and residential string trimmer. The first summer I only had one customer and I was pretty bummed out about that, but looking back it really helped me to only have that one customer. With the residential tools and small lawn mower everything will take longer then you think, now i certainly would have like to have had five or ten customers that first summer and I probably would have been able to do that but my customer service and cut quality would have really suffered so don't be to quick to get out there and have forty customers right off the bat, because first of all that won't happen, its going to take a lot of time to grow your customer base, and second of all you won't be able to handle all of the time and work. I am saying that from experience as a new one person crew everything takes way longer to do. You have more time then I did if you are taking off for a semester so you can take on 15 or 20 customers by the end of the summer if you can get that many but don't be upset if you don't, but with being new, inexperienced, and having mediocre equipment, not having to many customers is the best learning/training experience you can have. In my second summer I got up to 15 customers and I saved up about $200 and did all the research on lawn site and google on how to become legal and i did it my self (if you read enough its not that hard) I pay sales and use taxes and now I'm filing my end of year tax return, my mother is also an accountant so that really helps for the filing of the taxes. I am also looking into getting insurance I found pretty cheap insurance on for a $1,000,000/2,000,000 policy. Being young it is harder to get insurance that is cheap but it is really necessary if you don't want to be paying for medical expenses from hitting someone in the head with a rock that flew out from under your mower, and trust me medical expenses rack up quickly and are very very expensive. Becoming a legitimate business and getting insurance were the two things that I wanted to get before I upgraded all of my equipment or anything, its a great feeling and it takes away the fear of having to pay hefty fines to the state or medical bills out of pocket, so I suggest saving up for those two things by the second year of business at the latest. I am now currently looking to buy a brand-new commercial mower if i reach my customer goal for this upcoming season and I am studying for my fertilizer license which i suggest getting once you become legitimate because those fines are stiff as well. Become a good salesman as well, google and youtube and read as much as you can about lawn care, even if you are not completely sure you will be able to BS a customer and empress them until you actually fully understand what you are talking about, that will close a lot of deals for you. DO NOT LOW BALL A BID TO GET THE JOB EITHER. If you do that you will not make it through the summer, come up with a price and stick to it, people will pay more then you think and if you go in high it gives you a little room to negotiate if the customer wants and it makes both of you happy when you agree on a price. So basically after that very long answer, do as much research, reading, googling, and youtubing as you can to learn about lawn care, set your priorities in terms of what you are going to invest in first after you get your business started, don't low ball, and remember everything will take you longer then you think. Oh and don't quit when it gets tough, I wanted to quit very often but I didn't and I'm doing pretty well now. I hope this helps and good luck
  10. Set Apart Lawn Care

    Set Apart Lawn Care LawnSite Member
    Messages: 192

    After reading your responses, I think you have a good outlook and it seems like some good common sense about starting. I guess a lot of guys on here started out completely legit, but I didnt/couldnt and I dont know many around here who did, and thats not just lawn care. I added insurances and what not over the course of the first couple years. I, like most guys I know, started out with an older pick up, some donated equipment, and I bought a 36" gear drive mower for $1000 on craigslist. It sucked, my trailer didnt have a ramp so I had 2x8x8 boards. My cheap homeowner trimmer was constantly breaking. I had 25 customers even though I started in late may, and they were terrible. They were all over town, and I didnt try to lowball, I was lowballing because I didnt understand the cost of running a legit business. So between driving all over town and not making much money I really chalk that entire summer up to "learning it the hard way" and got a job waiting tables all winter since I couldnt afford a back pack blower or truck loader. So here are some lessons I've learned that I swear will make this work for you.

    1. Start building credit
    I know you want an all cash business, we all do, and if you can stay that way thats great. But you might find when you want an $8,000 zero turn, and you have an above 700 credit score so you can get almost no interest for 2-4years, you may want to turn around and put that money into advertising. That is how you grow. Credit is a game that has to be played in life, or atleast it can be greatly beneficial to play. That is a seperate conversation that im not the best to give.

    2. Advertising
    Online leads in my opinion are terrible! Sites where you pay for leads leave you with mostly cheapies. Ive used several hundred dollars on them before I realized I was waisting my money. Even google ads I think spreads you around town to think. I like door hangers and every door direct mail. Door hangers are my favorite, they are the most cost effective, and yield the best results. We started doing mailers because we dont always have time anymore to pass out door hangers.

    The main reason I like door hangers is it allows you to market to a concentrated area. The smaller that area the better. I have one subdivision with 21 yards, in only 3 years. Thats my best one, but we make some serious cash on the day we do that one. Driving time is huge, especially when you have employees. You have to drive out and bid, drive out if there is a problem, drive out for regular service. Having yards in a smaller area makes your business much more manageable. Plus in terms of branding, the people in that area see your truck more often because you around there so much, which further increases your chances of getting them. It is a snowball effect.

    Do not put postcards on mailboxes or throw bags onto drive ways, guys around here do that, its both illegal and ineffective.

    3. Bidding
    You said you are starting out, which means you may not know how to bid. I didnt. I thought, man I cut this $40 yard in an hour, my last job I only made $16 an hour so I'm rockin. I wasnt that dumb, I knew I had overhead, but I really underestimated. At what I charged I would never be able to grow. No newer trucks, no newer or bigger mowers, no insurances.... no future. You may be starting small with paid for equipment and living at home. However if you want to succeed you need to look at 5 years down the road. By then you may want all the legit stuff, a website, a marketing budget, a truck with a note, a couple commercial zero turns, a couple employees that come with payrol tax, workers comp, etc. Youll need commercial auto and a bit set aside for things like theft, deductables, a good cpa, a payroll company, etc. At the beginning I may have been operating at a 60% or better profit margin, but I didnt make more than 30k. Now my margin is closer to 30% but I have much more stability and I make closer to 48k.

    My point, if you are really trying to make a go at this, bid as if you are the company you want to have in 5 years so that you can be that company in 5 years. That takes some thinking. You need to know what kind of lifestyle you want to have, how much money you'd need to make, and what type of business it would take to do that. I realize you may not know all those things yet or have the experience in this field to determine them. Atleast have them in your mind. If 5 years out is to far then think in 2 years.

    Understanding how much time things will take and how much you need to make for your time to live the lifestyle you want are invaluable in this business.

    Good luck, hope to see you on here in years to come!

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