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weezerguy
06-17-2010, 06:44 PM
sat down today and figured up all my costs and its kind of scary. Just wondering is this right?


lawn care rate [all where figured under a 960 hour season]

truck: 6000- 6.25/hr
trailer:1000- 1.04/hr
2 trimmers-400-.42/hr
2 blowers-600-.63/hr
advertising-50/month[600 for year] - .63/hr
equipment maintenance [1000/month][6000/season]- 6.25/hr
2 push mowers-400- .42/hr
gas-300/month- 1.88/hr
rider mower 42''-1500-1.57/hr
total: 19.09/hr

company growth profit- 10,000/season-13.89/hr

hourly rate-25/hr

subtotal-57.98/hr

picframer
06-17-2010, 09:01 PM
In short no your numbers are way off, costs should be amortized over the life of the equipment, you have basically set up numbers on what you can do in a given period and expect to be debt free within the first year with a profit, this would never fly as a business plan.

jasonw
06-18-2010, 02:20 PM
Where are you getting a riding mower that will last for $1500? I paid about $2,500 for mine and its still bottom of the line. Anyway you should get a copy of Business plan pro. Its a cool program to help figure out a business plan.

robgee05
06-19-2010, 08:12 AM
Where are you getting a riding mower that will last for $1500? I paid about $2,500 for mine and its still bottom of the line. Anyway you should get a copy of Business plan pro. Its a cool program to help figure out a business plan.

I would probably say avg out the the costs over three years and add that to your $25 hr rate. Your obviously not making near $25 if you subtracting costs. If you are using a 1500 mower and its residential, consider a more realistic commercial model, or at least a decent used one. You might not get 960hrs even in on season out of a consumer grade.

Steve
06-19-2010, 12:49 PM
The thing I wonder about when figuring out your costs is this.

When you amortize the cost of a mower over the length of it is expected life.

Say $6000 over 3 years would be $2000 a year.

After that period of time, you are most likely going to have to replace the mower and take on another $6000 for another 3 years.

So if this is the case, how important is it to amortize when creating a budget like this? How many pieces of equipment are going to last past their amortization period?

picframer
06-19-2010, 09:31 PM
The thing I wonder about when figuring out your costs is this.

When you amortize the cost of a mower over the length of it is expected life.

Say $6000 over 3 years would be $2000 a year.

After that period of time, you are most likely going to have to replace the mower and take on another $6000 for another 3 years.

So if this is the case, how important is it to amortize when creating a budget like this? How many pieces of equipment are going to last past their amortization period?

It's a numbers game, depending on the value of the equipment amortization here for tax is 1 to 5 years. Can my equipment last longer than 5 years? The tractors and excavators no question, 10 to 15 as I take very good care of them and I buy top of the line, trimmers, blowers etc. I would say 3 to 5 years.

In accounting what is your goal? if to see if you are making a profit a lot of factors go into play, if for financing the numbers game is totally different as is for tax.

MAKLawnCutter
06-20-2010, 12:13 AM
IRS likes to see a growth every three years, as a new business, you arent expected an INCOME (+) within the first 5 years... which is also your DO or DIE period. IF you arent composed enough as a business in 5Yrs, pack it up or work harder.

I estimated to MAKE a business profit on year 4, if im lucky and see a .33+ increase yearly, which isnt bad, by year 4 ill be upto 3 trucks-loaded, 7 FT employees, 4PT employees and the wife being the company secretary to save some change... Seeing as i am still an independent L.L.C. There is NO RUSH to go full corp! I kind of like being strapped for money tho, makes me realize every time i leave a property, i better NOT get a call back, i cant afford the lost time.

Never aim for the heavens when you can barely see the sky.

Matt

Steve
06-20-2010, 01:07 PM
Seeing as i am still an independent L.L.C. There is NO RUSH to go full corp!

What do you feel is the difference? Do you feel being an llc limits your ability to grow?

What is your view on being a full corp?

jasonw
06-21-2010, 02:27 AM
I would probably say avg out the the costs over three years and add that to your $25 hr rate. Your obviously not making near $25 if you subtracting costs. If you are using a 1500 mower and its residential, consider a more realistic commercial model, or at least a decent used one. You might not get 960hrs even in on season out of a consumer grade.

Where do you get that figure? I use a consumer grade one rated at a usable life of 2500 hours and thus far I love it. Someone who would get less than a thousand hours from one is clearly not caring for it properly.

robgee05
06-21-2010, 08:28 AM
Where do you get that figure? I use a consumer grade one rated at a usable life of 2500 hours and thus far I love it. Someone who would get less than a thousand hours from one is clearly not caring for it properly.

No offense my friend, but call me when you get to 2500hrs, without replacing the whole motor tranny and deck of the thing. More realistic you may get 600-1000 hrs out of a residential machine.. Anyone with more mechanical experience here like to join in. You can still make $$ with the residential model. If you get 1000hrs out of it @ $1500 your cost to purchase is only $1.50 hr. Where as a $6000 machine you get 3000hrs out of will be $2 an hour. But surely better productivity out of a commercial model. Im a firm believer in starting small with what you need. But I highly doubt youll get 2500 hrs out of a resi model, with out a total rebuild which would cost you more then the mower new. But if you put away $5 and hour with the resi, youll save enough for a new commercial model in no time. LOL

jasonw
06-21-2010, 09:19 AM
I have no doubt this thing I have will last the 2500 hours and then some. The only part I can no speak for is the transmition. I am not 100% familiar with TB products yet but mine lasted me last year with no problems at all and this year so far no problems yet. Anyone can see the mettle work is not bad, maybe if a bolt vibrates loose it will cause some fatigue and something to fail but if that happens than a person would not be caring for it like I mentioned before. As far as the motor I stand by b&s all the way. My last one got well over 2500 hours on it and the only reason it died is because I didn't take care of it. I changed the oil only one time and over heated it. In my opinion its the same as the "Ford, Chevy and Dodge" debate that has been going one for a hundred years. I dont care which anyone thinks is better, if you care for them properly they will last forever. Besides if something did happen I would much rather be out $2,500 than $6,000 I researched TB, JD, Husqvarna and one other one that I cant remember the name of. They ranged from $1,00, to just under $10,000 with out one damn bit of difference. I am sorry but I refuse to pay $8,000 for a green pant job. That and the JD we have at work is a POS. The only difference was the JD had a bigger cup holder and an hour meter. I saved several thousand dollars and got a $25 B&S hour meter.

robgee05
06-22-2010, 09:56 PM
I have no doubt this thing I have will last the 2500 hours and then some. The only part I can no speak for is the transmition. I am not 100% familiar with TB products yet but mine lasted me last year with no problems at all and this year so far no problems yet. Anyone can see the mettle work is not bad, maybe if a bolt vibrates loose it will cause some fatigue and something to fail but if that happens than a person would not be caring for it like I mentioned before. As far as the motor I stand by b&s all the way. My last one got well over 2500 hours on it and the only reason it died is because I didn't take care of it. I changed the oil only one time and over heated it. In my opinion its the same as the "Ford, Chevy and Dodge" debate that has been going one for a hundred years. I dont care which anyone thinks is better, if you care for them properly they will last forever. Besides if something did happen I would much rather be out $2,500 than $6,000 I researched TB, JD, Husqvarna and one other one that I cant remember the name of. They ranged from $1,00, to just under $10,000 with out one damn bit of difference. I am sorry but I refuse to pay $8,000 for a green pant job. That and the JD we have at work is a POS. The only difference was the JD had a bigger cup holder and an hour meter. I saved several thousand dollars and got a $25 B&S hour meter.

Im not trashing them, I have one. 2500 running hours, I doubt it! Give me 1000 and im good. Truth is Ill never really know, I dont have an hour meter. $1.5 per hour. I actually have the kohler courage 18 horse. I previously had a craftsman 18hp for about 4.5 yrs. Beat the balls off it, made some $$$. Then sold it to some guy for $300 when its was overheating and smoking black. So it actually only cost me about $900. It was only used the last 2 years commercially so it may have had 1200 max on it. $200 a year in mower costs, not bad for small side biz. I also put off buying the commercial models, but longevity, productivity, and quality are far superior. Test drive an exmark or even a new BobCat. Youll see the difference. I dont even do the actual grass cutting for my business my brother does. And all he does is B^%$# about the cheap rider. But if the customers happy and your making money, who cares. He may break me down this year though. The rest of our smaller power equipment is commercial red max and shindawui. Which I do consider a must.

jeffcs
07-04-2010, 04:35 PM
What do you feel is the difference? Do you feel being an llc limits your ability to grow?

What is your view on being a full corp?

an llc gives you the same protection as a full corp does. i would stay away from the full corp, more paperwork and taxes. you actually have to take taxes out of what you pay yourself

bwood99x
07-23-2010, 04:07 AM
I recently bought a $2,500 Troy Built Zero Turn. I was a bit nervous with going with something so much cheaper than everything else I looked into. But Im just starting out, and that $ was stretching it as it was. I was able to get a 4 year protection plan on it for $350 or so, and that included all maintenance. I Felt that with the plan, why should I buy something more expensive? Well, right away on my first lawn I could tell the "cheapness" of the mower. It didnt seem to have enough power, the steering wasnt responsive...I was thinking maybe I was spoiled with the Xmark I used to drive. Well, no lie after the first ten minutes on my brand new machine...the wheel fell off!!! I was able to return the mower for a full refund. Guess I will be push mowing a bit longer to save up and buy a quality machine. Im glad I was able to learn a lesson early without paying the consequences.

Steve
07-23-2010, 03:20 PM
How about a used commercial mower? Would that be better?