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Discussion in 'Starting a Lawn Care Business' started by southerlawn, Jan 25, 2013.
What percent do you put back into to the company? Equipment?
I think this will vary greatly from one person to another.
25% seems like a good number to me, though.
Seeing that Im still a young business, I try for about 60% back into the business. It doesnt always work like though. I average about 30% profit on everything we do. So about 20% of our profit is reinvested. After we purchase a few more things that will drop to about 10% ty 15% and increase our savings for a few years, then start over.
let me go a little more in depth. There is not any payments for equipment, and this is a solo operation
There are a lot of areas this could be looked at.
1. Do you have a Family?
2. How old is your equipment?
3. Do you have a lot of breakdowns?
4. What is your bottom line at the end of the month?(Dont tell me)
5. Whats the quality of service you perform?
6. Are you Cash Rich or Poor?
These are questions you need to ask yourself and determine, What, Where and How you want to Brand your service.
2 new 0 hours
3 they are expected ( planed 3000 year break down budget)
4 unsure at this point
5 starting this season, pass experience is treat it like it was your own
6 by this I assume you mean extra capital-- poor
Cash Rich or Poor?
Yes, operating Exp. + all unexpected, i.e. buying fuel, insurance, material and supplies for a job.
I would, as it has been said before, "Find one thing and do a lot of it".
Its tempting to do a lot things to get traction but can you do a lot of things and keep quality?
Me, I would bank money, grow in knowledge, get hands on and develop a good honest customer relations and work ethic.
The banking money part is important, to many unknowns that could happen.
Drought, Storms, Injury, Wreck, Theft, good insurance helps the latter 2 but cash on hand helps all of them.
I assume you want to be able to purchase new equipment for cash over the years and you're asking about a savings fund for that?
You're a solo guy...if your route is tight I'd say your break down should be...
50% your pay
25% expenses (gas, ins., trimmer line, oil, etc, advert,break downs)
So, lets say you bill 5k/mth
Your pay is 2500
That savings may be a bit high as you wont need new stuff every dang year...so you can tweak that
thanks to the both of you this info really helps
The hard part is sticking to the plan!