Will not break even until 2008??!!??!!

Discussion in 'Starting a Lawn Care Business' started by Grits, Nov 16, 2006.

  1. Grits

    Grits LawnSite Silver Member
    from Florida
    Messages: 2,994

    I have been working on my projections. Apparently my business will not break even until sometime in 2008.;) When I saw no chance for 2006, I didn't go any further! Does this sound about right? I haven't done a whole lot of business in 2006, but I plan on it in 2007. I will be able to pay myself a decent salary, so I will personally be making money, but the business will not until 2008. And I think I have really low overhead. How long did it take your business to "break even"?
    Should I re-work my projections to cut spending and increase profits? I am trying to project an attainable goal. Do I need to correct the problem before it happens? or, Is this a problem at all? Thank you for your guidance.:dizzy:

    At the end of 2007, I will be about 10,000 in the hole. According to my current projections.
  2. lawnman_scott

    lawnman_scott LawnSite Fanatic
    Messages: 7,547

    What do you consider a "decent" salary?
  3. Grits

    Grits LawnSite Silver Member
    from Florida
    Messages: 2,994

    Besides payroll, I have fuel as my 2nd highest expense overall...averaging 206.25 per month. How much do you spend on fuel per month?

    SDNCLAWNCARE LawnSite Member
    Messages: 232

    This doesn't sound right. You should pay the business first before paying yourself. If the business has no money, than you have no money. What does you overhead consist of? How many accounts do you have? Do you have a truck payment?
  5. Uranus

    Uranus LawnSite Bronze Member
    from Mass
    Messages: 1,624

    206 a month! I wish I could get out of the gas station for less than $100. That doesnt happen much I spend upwards of $600 a month and I mow solo with a 60 inch lazer. I can drop $70 on the truck alone.
  6. Grits

    Grits LawnSite Silver Member
    from Florida
    Messages: 2,994

    Payroll is an expense just like office supplies and equipment. So according to your un-thought-out thoughts, you should be paying the business before you have a business.

    Ok guys, only reply if you know what you are talking about. Thanks!
  7. Grits

    Grits LawnSite Silver Member
    from Florida
    Messages: 2,994

    Topping out at 2400 per month for 2007.
  8. Grits

    Grits LawnSite Silver Member
    from Florida
    Messages: 2,994

    You are absolutely right. I think I was wishing in one hand and......well, you know the rest. I obviously need to re-work my projections.
  9. DuraCutter

    DuraCutter LawnSite Senior Member
    Messages: 806

    To be more profitable, you either cut costs or increase profits. Increasing profits doesn't necessarily mean getting more work, but getting more profit from every job.

    I can't tell you how to do it, but I can give you advice and guessing at your present situation.

    When I was in your situation, I sat down, and looked at who my clients were.
    I always found that the "tight wads" who made me the least money were the people who were the closest to spending their own money. That means, a homeowner earns money and when he gives it to you, he's on top of it like old glory cause he earned it the hard way.

    On the other hand, a board member at a condo association is spending the corporations money so he is once removed from actually earning that money. The dough comes from all members of the condo association and so it's not his hard work that made it. Hence, it's a little easier to spend and could mean more profit for you. Now, twice removed is even better, so in comes the property managers. Now, not all managers are careless, but they are twice removed and can make decisions on their own. I've had property managers approve on the phone quotes for up to $10,000 that would have been tougher to get and probably would have had to quote against others contractors. But being twice removed, that is so sweet. More profits...lots more.

    Now, the biggy, the thrice removed...hehe... a maintenance manager in a public or large corporation with a budget. Now there's were the profit increases. It's harder to catch this type, but they do exist.

    So, the moral of the story, look for more profit by choosing your client. Happy hunting. :canadaflag:
  10. Grits

    Grits LawnSite Silver Member
    from Florida
    Messages: 2,994

    I like this theory. I shall put it into use. Thanks.

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