Used equipment is one key to profits

2154 Views 17 Replies 16 Participants Last post by muddstopper, Aug 8, 2003

OwenS

Discussion Starter · Aug 6, 2003

When I was starting out in the mowing business, I made the mistake of thinking all my mowers had to be new. I no longer think this way.
If you can find a 20-50% discount on used equipment, you can either buy more equipment or make smaller payments to the bank. Either way, you will come out ahead. A mower with 25hrs generally does not cut significantly better than a mower with 500hrs.
Yes, there are more maintenance issues, but if you buy a good machine to begin with, even with some extra repair costs, used stuff in the paper or on e-bay is one key to more profits.
Who says I'm wrong?

Owen

1 - 18 of 18 Posts

Rob T

· #2 · Aug 6, 2003

I concur.

But...

1. Bank will give better rates on new equipt vs. old. If they will even let you finance used equipt.

2. Some equipt has so many new features or better engineering then it's 3 year old predecessor that it may cost you more in lost time over it's useful lifetime then you'll save at purchase.

3. You have to be careful buying used equipt. It may be abused, improperly maintained or worse. Downtime may cost you more than you save.

Sometimes used equipt is the way to go, sometimes it's not.

BSDeality

· #3 · Aug 6, 2003

i bought my first commercial WB 4 years ago this past spring, i bought it used for $900. i took a gamble cause it didn't have an hour meter, however after i closely inspected things and looked for wear i decided to go for it. It's still going strong this year and is just starting to show some age, it's blowing a little smoke at first start in the morning, i just installed a new transmission ($220) a few weeks ago. probably due to my (ab)use of the mower in the last couple years.

So, for $900, i have a mower that cuts good, and i paid for it in 3 months of mowing 4 yards that year. Ever since then its been a pure money maker with the exception of the transmission and regular maintenance.

I won't buy used 2 cycle stuff like trimmers, blowers or edgers unless i know the person that owned them. Too much risk in someone mis-mixing something and most 2cycl stuff only runs $200-500

Keith

· #4 · Aug 6, 2003

I bought my first commercial walk behind used. A 3 year old 54" Ransomes with a new shortblock for $1400 out the door. At the time I could not think of any better way of jumping in for a relatively small amount of money. Since then all of it has pretty much been new.

Here's something to remember though. A guy who buys his equipment new also recovers a decent portion of it's value when he sells it if is in good shape. So figure you are just sharing ownership, he takes half you take half...roughly. If he buys a new 48" Metro for $2600 and uses it for 3 years and sells it for $1300, what has he lost? Do you get more out of it for buying it used than he did for buying it new? I will bet there will be more maintenance issues in the next 3 years than there were in the first.

But it is a great way to get in without spending a fortune, and there are always deals out there that may make your part of the "shared ownership" worth more than you paid

LAWNGODFATHER

· #5 · Aug 6, 2003

Best way would be to lease. New mower every 2-3 years...

The key to profit is not skimping on your tools of the trade.

promower

· #6 · Aug 6, 2003

Considering an hour meter can be put on at anytime makes me always wonder, Does this machine have 500 hrs or 1200? Looks can be deceiving sometimes.

GLAN

· #7 · Aug 6, 2003

LGF and Keith are no doubt correct. I lease to own any major equipment purchase. A 32 and 36" scag I leased to own both at the same time. Gee think it was 6 or 7 years ago. Still have in perfect running condition.

I would be extremely hesitant buying used. I have a phylosophy that why should I buy anothers' headache when I can create my own.

Trucks I have always bought new. In June I just sold a 1989 F450 fine running condition. Tired of looking at it for 14 years and I knew that things were going to start going wrong. Same thing with a 1986 F350 when I bought a 2000 GMC W4500.

In this business you have to replace equipment when the time comes.

LAWNGODFATHER

· #8 · Aug 6, 2003

Some things used for the first one could not be a big deal. Like an aerator, or a power rake, something you don't have to use every day.

A belt dive mower could be a decent buy used, but you have to rely on it day in day out, why take the chance?

I have bought 2 mowers used, everything else has been new. I doubt I will buy used again, but I did know the owner of the 2 mowers, otherwise I wouldn't of bought them.

azturfpro

· #9 · Aug 6, 2003

I only buy new and sell it off after two years so it can become another companies problem .

fblandscape

· #10 · Aug 7, 2003

1 word. WARRANTY. If you are buying used, you have nothing to CYA when it goes down a couple days / weeks / months down the line.

Shuter

· #11 · Aug 7, 2003

Never bought a used mower, but I did buy a Stihl backpack blower (400) used 3 years ago for $100.00. Carb broke last month, dealer put parts on for a cost of $120. (also some other smaller parts). Blower is now 7 years old and runs like new and I have only 224. into it.

tiedeman

· #12 · Aug 7, 2003

Originally posted by LAWNGODFATHER
Best way would be to lease. New mower every 2-3 years...

The key to profit is not skimping on your tools of the trade.

I would have to agree

therainman

· #13 · Aug 7, 2003

where do you guys lease from esp LGF i am close enough to STL could use same co.

thanks shawn

Albemarle Lawn

· #14 · Aug 7, 2003

ffshuter, I tend to disagree on your blower scenario. I have spent less than you on BR400's but I got brand new ones, here's how I did it:

1)1998 2 Brand BR400's $399.00+ tax each.
2)Tax writeoff instant $850.00 ($399.00 x 2 + tax) section 179 deduction from 1998 tax return.
3)Used 5 seasons: 1998-2002
4)Sold on EBAY for $225 each, buyer paid shipping.
5)Put money toward 3 new Redmax EB7001's
6)3 new Redmax = $1500 section 179 deduction year 2002.

So the total cost of my BR400's were $399-225 each = $175 and I got them brand new. And I had a warranty. And a tax writeoff.

fsshuter I agree with everything you did up until you fixed the carb on that blower. Instead of plunking another $124 into the unit, you can sell it on EBAY non running for parts for $75+, thereby reducing your cost from to $25, or the $100 you paid for it minus the $75 you could have sold it for. THAT'S PRACTICALLY FREE!!!

The BR400's were well cared for and still in nice shape when I sold them, nice machines, but dinosaurs compared to the Redmax.
I sold them not because they were bad machines, but because the Redmax EB7001 is more productive and I'm paying my help up to $11/hour, so I need to make the most of my employees.

On the AGREE side, I recently bought a 2000 John Deere wide area mower for under $20,000 including transport and all new belts and fluids and blades. Compared to $53,000 + tax on a new one that was not bad. Its at 800 hours and functions as new.

Ken

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GeorgiaGrassMan

· #15 · Aug 7, 2003

If a used piece of equipment will be more profitable than a new one depends on many factors, like price, condition and tax implications. Sometimes it will be more profitable and sometimes it won't. What you have to look at is return on investment. In hind sight, you would take what you paid for the machine, subtract tax savings (which can vary widely from an sole proprietor LCO grossing 60K and a corp. LOC grossing 250K), add your fuel, maintenance, upgrade, interest and repair cost over the life of the machine and subtract what you sell the machine for when you're done with it. Then divide this cost by the number of hours you got out of it. As I said, this in hindsight. The trick is to be able to accurately estimate these figures on machines (new or used) that you are contemplating. Then you can compare alternatives. In a business of any kind, rules of thumb are no substitute for spending a little time with a calculator. That's why MBAs get the big bucks.

LAWNGODFATHER

· #16 · Aug 8, 2003

Originally posted by therainman
where do you guys lease from esp LGF i am close enough to STL could use same co.

thanks shawn

I don't lease but I know where you can.

PRO 1 LAWNCARE

· #17 · Aug 8, 2003

I have NEVER owned a new "COMMERCIAL" mower!!!

Keep your eyes open people. There are many FLY-BY-NIGHT operations that only last one season!!

An example:

This past winter I picked up an entire lawncare operation (equipment only) for $7500!! it included a 16' open trailer, 2 48" SCAG HYDRO'S, 2 LIKE NEW REDMAX BP BLOWERS, 2 REDMAX TRIMMERS, and a HONDA trim mower. ALL equipment was about 2 seasons old (less blowers). I ended up keeping 1 scag as a back-up to my exmark and 1 redmax blower and selling the rest as a "PACKAGE DEAL for exactly what I paid for it!! So, in the end I got a free 48" mower and BP blower !!!

I do recomend new 2CYL equipment over used. They are cheap enough to buy new and have confidence they will start when you need them!!!!!

muddstopper

· #18 · Aug 8, 2003

1)1998 2 Brand BR400's $399.00+ tax each.
2)Tax writeoff instant $850.00 ($399.00 x 2 + tax) section 179 deduction from 1998 tax return.
3)Used 5 seasons: 1998-2002
4)Sold on EBAY for $225 each, buyer paid shipping.
5)Put money toward 3 new Redmax EB7001's
6)3 new Redmax = $1500 section 179 deduction year 2002.

Now we know how you did it but, the legal way would of been to use the $225 each sold on ebay to reduce the $1500 section 179 deduction to $1050. Anytime you use the section 179 to reduce your tax liability you must show the amount recovered when you dispose of the item.

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