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swstout
05-17-2009, 12:51 AM
This week I have done 2 jobs where I tilled the entire lawn. One 24,000 sg. ft. and the other 19,000 sq. ft. I rented a Kubuto front loader with a rerar tiller ($400.00 per day plus delivery and pick-up and fuel - $530.00 plus). I charge rental fees plus $350.00 labor. I'm looking at picking up another 8 - 10 jobs.

I found this http://www.sears.com/shc/s/p_10153_12605_07125244000P?adCell=W3 for $1,200.00. If I charged $350.00 per job, I could pay for it with just 4 jobs. Also, with the rental tractor, I have to skip where the septic tank is and use a walk behind for fear of crushing the septic tank. This would bypass that.

I have a Craftsman 26HP ZTT-52 tractor/mower I picked up at an estate auction for $1,100.00 to pull it with.

Any input would be greatly appreciated. I was looking at putting down $6,000.00 and financing a model similar to what I am now renting and then would hae to get a different truck (SC law requires a 1 ton capacity vehicle to transport it).

Any suggestions?

Steve

picframer
05-17-2009, 06:17 AM
Steve, At the rate you are going I would encourage you to consider a small four wheel drive Kubota or John Deere tractor that has a three point hitch and PTO, I know it is considerable capital to start with however it will open a lot of doors and pay for itself fairly quick.

I do not know your terrain so my observation would be based on my experience here. I pull tiller for a lawn tractor would not work well, we till a lot of gardens and lawns and we quite often use four wheel drive for grades etc.

Does your rental place rent a pull tiller you could attach to one of your tractors to try so that you would know if it might work? I believe what you are renting is PTO driven. The other thing I would do it talk to the rental place and work a deal, we rent a compactor from time to time and they give us a 50% discount off consumer rental prices.

You might also be able to lease a tractor if the up front capital is a concern, keep in mind Kubota and John Deere have 0% financing on at the moment.

You had mentioned the Kubota dealer was getting a small CUT (Compact Utility Tractor) in, these things really hold their value and are not cheap but then again in my experience they pay for themselves in 6 months or less.

Andy

swstout
05-17-2009, 09:20 AM
Steve, At the rate you are going I would encourage you to consider a small four wheel drive Kubota or John Deere tractor that has a three point hitch and PTO, I know it is considerable capital to start with however it will open a lot of doors and pay for itself fairly quick.

I do not know your terrain so my observation would be based on my experience here. I pull tiller for a lawn tractor would not work well, we till a lot of gardens and lawns and we quite often use four wheel drive for grades etc.

Does your rental place rent a pull tiller you could attach to one of your tractors to try so that you would know if it might work? I believe what you are renting is PTO driven. The other thing I would do it talk to the rental place and work a deal, we rent a compactor from time to time and they give us a 50% discount off consumer rental prices.

You might also be able to lease a tractor if the up front capital is a concern, keep in mind Kubota and John Deere have 0% financing on at the moment.

You had mentioned the Kubota dealer was getting a small CUT (Compact Utility Tractor) in, these things really hold their value and are not cheap but then again in my experience they pay for themselves in 6 months or less.

Andy

Andy,

I see your point, but you are much larger than I am. I have 2 equiped trucks and 3 employees (took on 2 this week). I do plan on getting what you suggest, but I want to do it without financing if possible. At the rate I charge per sq. ft, I could recap my investment with 3-4 jobs and have that income to build my cash reserve for future purchases. I give myself a salary and refrain from "dipping in" to the assets of the business.

I'm 60 years old, My equipment is all paid for, I have 3 years - 7 months left on my house mortgage. Maybe, if I see more assurances that jobs and the market will continue to grow I will change my outlook. I feel our current President is only going to make doing business more difficult and much more expensive. Unemployment here is now 9.9% and growing.

The terrain here is mostly compacted sand with some clay here and there so I feel this equipment will do the job for now. I have a 6 month living expense reserve and would like to keep it for emergencies. Neither the Kubota or John Deere dealerships have 0% financing. Neither even have in-house financing.

If things go bust, I will be out $1,300.00 instead of $20,000.00. I have 8-10 pending jobs that will need tilling (and sod). Success here will greatly ease my concerns and probably will change my outlook.

Steve

Steve W
05-17-2009, 09:48 AM
This week I have done 2 jobs where I tilled the entire lawn. One 24,000 sg. ft. and the other 19,000 sq. ft. I rented a Kubuto front loader with a rerar tiller ($400.00 per day plus delivery and pick-up and fuel - $530.00 plus). I charge rental fees plus $350.00 labor. I'm looking at picking up another 8 - 10 jobs.

I found this http://www.sears.com/shc/s/p_10153_1...000P?adCell=W3 for $1,200.00. If I charged $350.00 per job, I could pay for it with just 4 jobs. Also, with the rental tractor, I have to skip where the septic tank is and use a walk behind for fear of crushing the septic tank. This would bypass that.
I think you should keep looking for something else. The size of the jobs you talk about compared to the size of that craftsman tiller would be a joke.
I looked at the tiller and read the reviews and watched the demo video.
It would take you a long time to do one of these jobs and I dont think you would be able to do many with this tiller before it broke down.

Steve

swstout
05-17-2009, 10:49 AM
I think you should keep looking for something else. The size of the jobs you talk about compared to the size of that craftsman tiller would be a joke.
I looked at the tiller and read the reviews and watched the demo video.
It would take you a long time to do one of these jobs and I dont think you would be able to do many with this tiller before it broke down.

Steve

Thanks for the input.

The jobs I have pending are 8-10k. The 2 I did this week are exceptions. It is hard to justify a $500.00 plus rental fee, and the rental place only has 1 and it is in demand. I had to wait 2 weeks to get it for 2 days and they charge $65.00 per pick up and delivery. For the 2 jobs I did last week it cost $195.00 for this.

Steve

Steve
05-17-2009, 11:10 AM
Steve,

What do you think you might do then?

It also makes you wonder if you could get one of these and rent it out although I am sure that would create other headaches but it seems if they are in demand, others out there would either want to rent them or hire someone to perform the service.

This reminds me of a post Andy made in the past about one of his attachments that he had gotten,

picframer
05-17-2009, 04:01 PM
Steve,

What do you think you might do then?

It also makes you wonder if you could get one of these and rent it out although I am sure that would create other headaches but it seems if they are in demand, others out there would either want to rent them or hire someone to perform the service.

This reminds me of a post Andy made in the past about one of his attachments that he had gotten,

I agree, I understand twenty grand is a big investment but I guess I am a bit of a risk taker and go after it. I put $97,000 of my own money into the company in February, the company will soon have enough to pay me off, if I wish.

I decided today, being my B day, to say to heck with it and continue to grow, I am buying a John Deere 17D excavator, it's a $40,000 investment but I have more than that on the books in jobs to do.

Personally I don't pay a lot of attention to the economy, it is driven for the most part by the media, the media does more damage to the economy than any other thing I am aware of, when I wrote my Masters degree, this is what my thesis was on.

Also tend to buck the trends, there is all kinds of work out there but it doesn't come to you, one has to go after it. I have only been in business since the second week of April, we are now 11 employees and growing and are booked solid into mid June. The majority of the new business is referrals as I stopped all advertising a couple weeks ago, I don't like making people wait.

Anyhow bud, give it careful thought, I don't think the craftsman unit will do the job, I did some researching on Google and wasn't very impressed.

What is your biggest tractor that you own?

Andy

picframer
05-17-2009, 04:06 PM
Steve, The guys over on the John Deere forum love these units, never seen one but there are a pile of guys that swear by them

http://www.drpower.com/home.aspx

http://www.drpower.com/Roto-Tiller.aspx?cm_re=DR%20Home%20page%20-%203-_-Machine%20Lineup-_-TLR%20-%20Main%20Link

swstout
05-17-2009, 06:24 PM
Steve, The guys over on the John Deere forum love these units, never seen one but there are a pile of guys that swear by them

http://www.drpower.com/home.aspx

http://www.drpower.com/Roto-Tiller.aspx?cm_re=DR%20Home%20page%20-%203-_-Machine%20Lineup-_-TLR%20-%20Main%20Link

This is much better. With the Cult-packer attachment ($355.00), you can till, seed, and roll inthe same operation.

It is $1,100 ($1,300.00 with electric controls) more but the features and warranty is better. The 1 gallon gas tank I think could be bigger but they say it gets 90 minutes per tank.

I sent for more info.

Thanks,

Steve

picframer
05-17-2009, 06:42 PM
This is much better. With the Cult-packer attachment ($355.00), you can till, seed, and roll inthe same operation.

It is $1,100 ($1,300.00 with electric controls) more but the features and warranty is better. The 1 gallon gas tank I think could be bigger but they say it gets 90 minutes per tank.

I sent for more info.

Thanks,

Steve

Some of the guys over on the forum said they have excellent financing. I know two guys on the forum quite well that do the same things as I do and they tell me these products are very well made, one fellow has become a great friend and knows his stuff so I believe this would be a far better option for you and let us know what you decide and how it works out.

What will you be pulling it with?

swstout
05-17-2009, 06:57 PM
Some of the guys over on the forum said they have excellent financing. I know two guys on the forum quite well that do the same things as I do and they tell me these products are very well made, one fellow has become a great friend and knows his stuff so I believe this would be a far better option for you and let us know what you decide and how it works out.

What will you be pulling it with?

One truck set-up has a Craftsman 26HP 52" ZTT, the other truck has a Murrey with a 42" deck. The craftsman, I bought at an estate auction. It's less than a year old. The Murry I bought new about 3 years ago for use at my home.

I didn't do any 'labor' work today! Rain storms all day so I had research time. Bid on 12 jobs. Might have to consider another truck set-up. My mechanic has Ford Explorer like the one I have now that he just rebuilt the engine on that he will let me have for weekly payments of $75.00.

It could be a good vehicle for spraying. Looks like I'll have enough work to dedicate it for just that. Now I'll probably have to get another employee!

Steve

picframer
05-17-2009, 07:03 PM
Funny, I am looking at another truck also, I think I will get another Ranger, have two of them and they work great, I pull the Tandem with a F250 Diesel, prices seem good, I can get a 2007 with 24,000 mikes for about 10 grand, this truck would be used for pulling a 10 foot trailer, ATV and the small log hauler I built today. Interest rates here on anything up to three years old is 1.5%, seems like the thing to do.

Steve W
05-17-2009, 07:16 PM
Steve, The guys over on the John Deere forum love these units, never seen one but there are a pile of guys that swear by them

http://www.drpower.com/home.aspx

http://www.drpower.com/Roto-Tiller.a...%20Main%20Link
Hay Now! These look alot better to me and I think I want one now.
Who knows might be my next service to offer also.:D

SuperiorPower
05-17-2009, 07:26 PM
This week I have done 2 jobs where I tilled the entire lawn. One 24,000 sg. ft. and the other 19,000 sq. ft. I rented a Kubuto front loader with a rerar tiller ($400.00 per day plus delivery and pick-up and fuel - $530.00 plus). I charge rental fees plus $350.00 labor. I'm looking at picking up another 8 - 10 jobs.

I found this http://www.sears.com/shc/s/p_10153_12605_07125244000P?adCell=W3 for $1,200.00. If I charged $350.00 per job, I could pay for it with just 4 jobs. Also, with the rental tractor, I have to skip where the septic tank is and use a walk behind for fear of crushing the septic tank. This would bypass that.

I have a Craftsman 26HP ZTT-52 tractor/mower I picked up at an estate auction for $1,100.00 to pull it with.

Any input would be greatly appreciated. I was looking at putting down $6,000.00 and financing a model similar to what I am now renting and then would hae to get a different truck (SC law requires a 1 ton capacity vehicle to transport it).

Any suggestions?

Steve

I am not against using a pull behind tiller, but like someone else said, this machine will break down with little use. It is designed to do a personal garden, not multiple lawns. Something else to check into is for small 2nd hand tractors. Around here, at least for a while, I could buy a second hand Yanmar or similar diesel tractor for about $4,000-$6,000 depending on size, 2 or 4 wheel drive, and attachments. They had one with a tiller, 4X4, etc for $5,xxx. This would be an awesome deal for what you are doing.

In case you are not familiar with Yanmar, they are a very tough little tractor, but have not seen the marketing that Kubota and JD have seen. And I would absolutely abstain from the sears tiller. Sears lawn and garden equipment is manufactured by the LPB (lowest possible bidder). PERIOD!

Here (http://www.tractorhouse.com/listings/detail.aspx?OHID=5548154&GUID=ABDA9526F0B64BECA54F3BF11B3EAAB0) is a Yanmar I found on tractorhouse.com that is located somewhere in SC (don't know if its even close to you). I see it is advertised as having only 100 hours on it. my brother worked for a guy some years ago and the guy had several Yanmar tractors that they run hours and hours on end with absolutely no problems..... They joked that they could run it all day and at the end of the day they would have to take some fuel out of the tank as it was too full!!! Point being, like most small diesel tractors, they use very little fuel.

If you decide to buy a pull behind model tiller, I would at least recommend getting a better quality one, that is if there is a better one available. I really do not think the Craftsman one will hold up...

Either way, good luck, and let us know what you decide and how it works out for you.

swstout
05-17-2009, 07:46 PM
I am not against using a pull behind tiller, but like someone else said, this machine will break down with little use. It is designed to do a personal garden, not multiple lawns. Something else to check into is for small 2nd hand tractors. Around here, at least for a while, I could buy a second hand Yanmar or similar diesel tractor for about $4,000-$6,000 depending on size, 2 or 4 wheel drive, and attachments. They had one with a tiller, 4X4, etc for $5,xxx. This would be an awesome deal for what you are doing.

In case you are not familiar with Yanmar, they are a very tough little tractor, but have not seen the marketing that Kubota and JD have seen. And I would absolutely abstain from the sears tiller. Sears lawn and garden equipment is manufactured by the LPB (lowest possible bidder). PERIOD!

Here (http://www.tractorhouse.com/listings/detail.aspx?OHID=5548154&GUID=ABDA9526F0B64BECA54F3BF11B3EAAB0) is a Yanmar I found on tractorhouse.com that is located somewhere in SC (don't know if its even close to you). I see it is advertised as having only 100 hours on it. my brother worked for a guy some years ago and the guy had several Yanmar tractors that they run hours and hours on end with absolutely no problems..... They joked that they could run it all day and at the end of the day they would have to take some fuel out of the tank as it was too full!!! Point being, like most small diesel tractors, they use very little fuel.

If you decide to buy a pull behind model tiller, I would at least recommend getting a better quality one, that is if there is a better one available. I really do not think the Craftsman one will hold up...

Either way, good luck, and let us know what you decide and how it works out for you.

Andy (picfraimer) pointed me to DR Power. I have sent for more info. It seems much more suited for the job. I will (depending on circumstances) get more commercial grade equipment eventually.

Thanks for the info.

Steve

SuperiorPower
05-17-2009, 11:13 PM
Yea I looked at it and agree, it seems to be a much better design. One of the problems I have with it tho is the fact that it is a non-dealer item meaning there is no dealer support base. From my perspective (dealer/mechanic) let me tell you, I hate anything that is not sold through a servicing dealer (what do you expect!!).

As I mentioned on another thread recently, there are many advantages to buying from a servicing dealer. One of the reasons is the company that only sells you something cares only for your money and to sell you another. A servicing dealer (there may be a few exeptions) cares about you and to make sure they sell you something that will last a long time. And for the record, Home Depot, Lowes, etc are not servicing dealers!! They may offer a "service" but it is not "in house", but rather contracted to them. It is a by a big company that cares nothing for the owner, and they charge considerably more for their service. And you are a "number". Anyway, let me get off my soap box!

Like I said, I would definitely consider the DR over the Craftsman though.

Good luck

swstout
05-18-2009, 12:08 AM
Yea I looked at it and agree, it seems to be a much better design. One of the problems I have with it tho is the fact that it is a non-dealer item meaning there is no dealer support base. From my perspective (dealer/mechanic) let me tell you, I hate anything that is not sold through a servicing dealer (what do you expect!!).

As I mentioned on another thread recently, there are many advantages to buying from a servicing dealer. One of the reasons is the company that only sells you something cares only for your money and to sell you another. A servicing dealer (there may be a few exeptions) cares about you and to make sure they sell you something that will last a long time. And for the record, Home Depot, Lowes, etc are not servicing dealers!! They may offer a "service" but it is not "in house", but rather contracted to them. It is a by a big company that cares nothing for the owner, and they charge considerably more for their service. And you are a "number". Anyway, let me get off my soap box!

Like I said, I would definitely consider the DR over the Craftsman though.

Good luck

I have spent a lot of time today calculating, cussing and discussing, researching, and forecasting. I could get the return on investment of the Craftsman unit with 4 jobs. The DR unit will take 9. With what I have sold and what I have in bids, I should get the return in 1 month for the DR. It will do for now and be a good back-up later.

I think I will follow Andy's growth plan. Future equipment will be based on sold jobs. When I have enough sold jobs to cover new (commercial grade) equipment, I will purchase.

My salary, my employees saleries, and 6 month expense plan will still be intact. The company revenue reserves will be there to purchase and expand.

Again, thanks for the input.

Steve

SuperiorPower
05-18-2009, 01:04 AM
I have spent a lot of time today calculating, cussing and discussing, researching, and forecasting. I could get the return on investment of the Craftsman unit with 4 jobs. The DR unit will take 9. With what I have sold and what I have in bids, I should get the return in 1 month for the DR. It will do for now and be a good back-up later.

I think I will follow Andy's growth plan. Future equipment will be based on sold jobs. When I have enough sold jobs to cover new (commercial grade) equipment, I will purchase.

My salary, my employees saleries, and 6 month expense plan will still be intact. The company revenue reserves will be there to purchase and expand.

Again, thanks for the input.

Steve

You know, I need to learn something from you and Andy... The whole financial reserve thing that is..... The words of an old George Jones song come to mind: "I've got a hundred dollars in my pocket thats burning a hole" (Finally Friday).

Don't get me wrong, I don't blow money on "consumables" like expensive food, one time use items, etc. But when I have free money I find it easy to spend it on tools or inventory. I am trying to get some things straigtened out to the point where I don't use te same checking account for both. I am trying to get the shop (yes, my shop is only part time for me right now) to where it is self sufficient and the only money going into it is come from profits in the shop. And my plan is to not pay myself anything from the shop for a while. Basically let it grow itself. Financially that is. But I have not yet figured outhow to get my personal financial reserve built up.... Right now I can get my shop to a small financial reserve because of the work going out. I am slowly changing where I see I need to. In this I am learning from more experienced business owners.....

And among the things I am changing is not working on stuff that is not profitable to me. This includes WeedEater, McCulloch, and other cheap crap that I can not afford to fix.... I have other things to do with my time.....

swstout
05-18-2009, 01:36 AM
You know, I need to learn something from you and Andy... The whole financial reserve thing that is..... The words of an old George Jones song come to mind: "I've got a hundred dollars in my pocket thats burning a hole" (Finally Friday).

The financial reserve is hard to set up! I have a strict budget for my personal expenses. I total up all my living expenses (mortgage, electric, water, phone, insurance, etc.). All the egular monthly bills. Then I budget the variable bills (the ones that chang due to inflation and price swings. The goal is to have enough set aside to cover all living expenses for 6 months. Included in this but not totaled monthly iare expenses like Med insurance and auto insurance deductables.

Know, say I have an accident and can't work, there is enough set aside to cover all bills for 6 months if there is no income comming in. My wife's salery is included so that if both of us can't work, we're covered.

To do this you have to live by a STRICT budget. Have the 6 months total expenses plus deductables (health, homeowners, and auto) and use it only for emergencies when you have a plan to reinburse the balance.

Getting to this point is very difficult although it was much easier after the kids moved out. There is a feeling of great accomplishment when you achieve this. Financial fears vanish, and once you get to this point you will actually fight to maintain it. This does not include retirement investments. For 30 years now, we have matched our Social Security expenses (deductions) and invested it (not in individual stocks but in S&P spiders and have not touched them). The recent doneturn in the markets have cost us some but overall it was a sound investment.

I don't think I will ever stop working (I have to do something or go crazy). Even after 37 years together, we couldn't spend 24/7 together. We still have to do our seperate things apart.

It's very hard to accomplish but it's worth every sacriface to get to the point. Hope this helps!

Steve

picframer
05-18-2009, 06:15 AM
Eli, I understand banking is somewhat different in the USA than Canada and I am not familiar with what is available in your area however consider this.

Being a former banker I have volunteered to give talks on personal finances within the community, although it seems so simple it takes discipline, I have helped many people in the past set up a nest egg and some avoid going under just by changing their life style a little bit, perhaps their way of thinking.

Lets use a fix my chainsaw as an example. I bring my chain saw to you and you provide me a quote of $100.00

Your overhead costs amortized over the income of the month lets say it would be $25.00 put this in our operating bank account.

Parts to fix the saw will run $50.00 this will go into and come out of our inventory account.

Balance is your time and or profit.

Set up two more separate bank accounts somewhere where they do not charge monthly service fees or their service fees are very low, put 1/2 of that profit in each account and do not touch it, even if a smoking deal comes along.

Now make a plan, what is it that you need to expand your business that will bring in more revenue? Let's say for this example it's a chain sharpener that costs $300.00, this would save you time and increase profits.

Put $12.50 into what we will call the capital account

Put $12.50 into what we will call the rainy day account or savings account

Stick to the plan and watch it grow, I think far too often we expect immediate results, it takes time but it will grow, don't dip into it unless you are in a state of emergency.

Many years ago I was talking at a class given in the community centre, a couple asked for a personal talk after I was finished. We met, they could not make ends meet, I spent a few hours over the next few weeks in the evenings helping them come up with a budget, the deal was they had to stick to it and they agreed.

I discovered as did they, they bought 6 coffee's a day, five days a week and then a few on the weekends, I forget the cost but let's say $9.00 with a tip, lets say they cut out the five coffee's during the work week and made it at home, that is $180.00 a month, basically a car payment. They bought groceries three times a week, we cut that to once to save fuel as they didn't get groceries on the way home, they went after supper.

Point being this, start on June first and make a list of everything you spend money on during the month, even that coffee once in the while and I am in no means saying don't have a coffee with friends, the goal here is education or educating yourself to see where every dime is going, put each item in a category, take each category and multiply by 12 at the end of the month, that is give or take your annual cost, is there any savings to be had, if so, do it and put that savings in your rainy day account and watch it grow.

Reward yourself a little from time to time for doing a great job saving, perhaps a movie or something else you like to do that will not cost an arm and a leg.

I have a Capital/Asset account and keep it invested in very low risk Mutual funds, I average a 16.3% return, I understand not everyone is able to pick which fund to invest with, your bank will educate you for free, when I have to buy something, my rule of thumb is this, if the interest rate is 7% or less I borrow and leave my capital account alone although payments on the loan are paid from this account and with the new piece of equipment, I put 35% of every cent it makes into this account until it is paid for. If the piece of equipment will not pay for itself within 9 months I don't generally buy it.

I could go on and on however we all need to start somewhere, give it some consideration.

Andy

Steve
05-18-2009, 08:30 AM
I have a ton of questions on this but I wanted to start with the first one.

Your overhead costs amortized over the income of the month lets say it would be $25.00 put this in our operating bank account.

What does amortized mean in this situation and how do you account for it?

picframer
05-18-2009, 11:29 AM
I have a ton of questions on this but I wanted to start with the first one.



What does amortized mean in this situation and how do you account for it?

Amortized simply means spread out, if I know my basic costs are for example
$2000.00 a month and I work 20 days a month then it's $100.00 a day to open the door, if I know I can fix and I have the work to fix four chain saws a day then I need $25.00 from each repair to cover my overhead, anthing over and above is gravey so to speak and can be split between my capital account and my savings account or maybe treat myself.

Steve
05-19-2009, 08:17 AM
Thank you.

when I have to buy something, my rule of thumb is this, if the interest rate is 7% or less I borrow and leave my capital account alone although payments on the loan are paid from this account and with the new piece of equipment, I put 35% of every cent it makes into this account until it is paid for. If the piece of equipment will not pay for itself within 9 months I don't generally buy it.


Is there a reason why you picked 7% as your barrier? What if the interest rate is above 7%?

Also any thoughts as to why 35% of what the equipment makes goes back into the account? Why not say 50%?