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$10 a Lawn and making a profit!

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  • #16
    check this one

    very good points... but I think you can make a profit in the right situation..you just won't make a as much profit as you should be making. Well at least until you have to replace the equipment you got for free. but like I read before, if you maintain your equipment right, it lasts.

    take this...the employee earns $10/hr. If it takes 30 min per lawn for a $30 lawn, then he gets paid $5 per lawn.

    At this rate he can mow 16 lawns in a day or 80 possible lawns mowed in 40 hours or 1 week. if you consider 35 mowing weeks in the season, that makes 2800 mows for the season.

    if he charges $15 per lawn (half of his boss) he will gross $42000 for the season.

    as an employee at $10/hr ($5/mow avg), he will gross only $14000.

    True. out of those 42000 he has to take out OPERATING expenses (to keep it simple)

    Gas ($4/lawn) 11200, truck insurance 300, biz cards he printed out 50, maintenace 1000, Liab insurance 800, business registration 100,printing paper and ink 80,
    - total = 13530 lets round it to $14000 in case we forgot something

    - So 42000 - 14000 = $28000 gross
    - That's twice as much as he made working for his boss!

    as far as saving for equipment, You wouldn't expect to replace your equipment the first year, and if you do, then you can send it to warranty.

    Now we're saying this is a one man operation, Two mowers (a good one and a back up one), two trimmers and a blower. How much can all this equipment cost to replace? not 14000 a year.

    lets say you spend 5 grand on this equipment and you expect it to last you 5 years. then you can set aside 1000 each year (depreciation) for when you have to replace it...that still leaves him $27,000.

    Now is he making a profit? If his opportunity cost for the time spent working for his boss is $14000 gross, I think he is making profit.

    What do you guys think?

    Comment


    • #17
      Take this scenerio for instance:

      Lets say you pay your employees $10 and hour and in 1 hour your employee can mow 2 lawns on average. You are paying them $5 per lawn gross pay.
      If they work 8 hours a day. you pay them $80 gross.

      If I was that employee, and not thinking too deeply, I would figure I can charge $10-$15 per lawn and make 2-3 times as much money as I was making and still be charging 1/2 to 1/3 of the competition.

      i know you may be thinking, "he's gonna be broke in no time!"

      But consider this, I had a friend who's uncle gave him a brand new riding mower with a ton of attachements (including snow blower), trimmer, blower, etc. because his uncle owned an equipment store. uncle wanted to claim a loss somehow.

      Well this friend already owned a pick up and small trailer, big enough to put the mower in.

      This is almost the perfect scenerio for him to be able to start his lawncare business charging $15 per lawn. (He was only making $8.50/hr at his factory job)

      I mean, this is probably why there are many new competitors trying to charge so low...they figure, i already have equipment to use, my overhead is low since I'm not gonna pay insurance or register...or even if they did, it doesn't cost much to at least register.

      Get this... so lets say a LCO pays 65% overhead, 20% company profit, and 15% owner profit. out of a $30 lawn that's $19.50 for company costs.
      the company and owner combined are only making $10.50 on the lawn.

      I think it's possible for someone in this situation to charge $15 for the same lawn that a larger LCO would charge $30 for and still make about the same amount of profit. That's about $30 per hour if he does 2 lawns per hour. I know of landscapers who charge $30 per labor hour and that includes their overhead.

      What do you guys think??

      Lets analyze this: what would be his costs?
      - basically his operating costs (variable)
      gas, maintanence, administration, ??
      - his fixed costs would be pretty low
      : registration, insurance, adv, what else??
      This was probably already covered but I didn't read all the reply's. At %50 or your revenue going to expenses I think they will be out of business in no time. At the same time someones uncle who gives away equipment to claim a loss is both a crook and not a good businessman so chances are he is out of business or shut down anyway. A minimum I like to shoot for is no more than %15 expenses. So far I am able to beat that target. Hopefully it stays that way.
      White Company

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      • #18
        Not to mention that as a self employed person you also have both sides of the income tax and SS and FICA to pay.

        Not taken into account is invoices, rain delays, non payers etc.
        Pat

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        • #19
          ok but self employment is 7.65% additionally to the 7.65% that would be deducted from your pay if you were an employee anyway. So 1 yard out of the day's bunch would pay for that.

          I still think in the right situation you can make a profit charging $15 per lawn that would take you about 30 minutes to complete. I know landscapers who charge $30 an hour and they have more overhead than would be needed.

          lets say you buy a used self porpelled mower in good condition for $300. A trimmer and a blower for an additional 300. if you already have a truck, then you are set for business.

          What would be your overhead?

          You are already paying insurance for the truck so you don't need it.
          you would have gas, maintenance (wouldn't be much for a 21'' mower, etc), advertising, and depreciation of equipment.

          Comment


          • #20
            7.65% are you kidding me? where are the taxes that low? I am taxed about 22.5%.
            White Company

            Comment


            • #21
              I am confused as to why you would want to limit your profit so drastically....

              I understand there is a point where too much profit will actually cause you to loose profit due to lose of work. But in this case, too little profit will cause you to loose hope. Don't just charge what it takes you to get by. Tomorrow your truck will break down and you will need to do a repair or your mower will blow up and you will need to replace it. Or you will need to buy a bigger mower so you can do 4 yards in an hour.

              The bottom line is that your overhead is more than you are thinking it is. I don't know if you are in denial or simply oblivious to it. Like I think I mentioned before, even if you don't have the overhead, charge enough so that it will help make up for it in case you ever do have the overhead. Breeze mentioned earlier that if you want to undercut the competition who charges $20, charge $19. I think that is decent advise. My opinion would be to be the best. Then go fix those $20 yards (for like $30)......

              Has it ever occurred to you that perhaps the guys that are charging more are having to come along and fix someone else's $10 yard job?

              Comment


              • #22
                I am confused as to why you would want to limit your profit so drastically....

                I understand there is a point where too much profit will actually cause you to loose profit due to lose of work. But in this case, too little profit will cause you to loose hope. Don't just charge what it takes you to get by. Tomorrow your truck will break down and you will need to do a repair or your mower will blow up and you will need to replace it. Or you will need to buy a bigger mower so you can do 4 yards in an hour.

                The bottom line is that your overhead is more than you are thinking it is. I don't know if you are in denial or simply oblivious to it. Like I think I mentioned before, even if you don't have the overhead, charge enough so that it will help make up for it in case you ever do have the overhead. Breeze mentioned earlier that if you want to undercut the competition who charges $20, charge $19. I think that is decent advise. My opinion would be to be the best. Then go fix those $20 yards (for like $30)......

                Has it ever occurred to you that perhaps the guys that are charging more are having to come along and fix someone else's $10 yard job?
                LOL You read my mind. I always like to say "Ok thanks for your time, Here is my card. Give me a call when your lawn gets hacked" LOL
                White Company

                Comment


                • #23
                  ok but self employment is 7.65% additionally to the 7.65% that would be deducted from your pay if you were an employee anyway. So 1 yard out of the day's bunch would pay for that.

                  I still think in the right situation you can make a profit charging $15 per lawn that would take you about 30 minutes to complete. I know landscapers who charge $30 an hour and they have more overhead than would be needed.

                  lets say you buy a used self porpelled mower in good condition for $300. A trimmer and a blower for an additional 300. if you already have a truck, then you are set for business.

                  What would be your overhead?

                  You are already paying insurance for the truck so you don't need it.
                  you would have gas, maintenance (wouldn't be much for a 21'' mower, etc), advertising, and depreciation of equipment.

                  Overhead would be

                  * Rent to store your equipment

                  *Maintaining your truck

                  * Getting a trimmer and blower that will do the job for $300?

                  *gas

                  *Time



                  $1 dollar a minute why limit yourself

                  Comment


                  • #24
                    I agree

                    I agree with all of you. You are all right because you know how the business works. But if you read the first post. I talked about an employee not thinking too deeply about it would think this way.

                    And it is possible to make a living cutting $15 lawns but not practicle for a very long time. (I mean as an employee he was grossing $5 per yard) Unless he doesn't want to grow the business and just make somewhat more than being the employee.

                    as far as having to fix a lawn just because the prior guy charges less isn't always true. as a matter of fact I have a few lawns out of my route that I have subbed out to those guys charging the $20 and let me tell you this guy does a fantastic job. He has been mowing my $40 lawns, trimming, bagging, edging, and blowing off all the debri (or brooming because it looks too clean for a blower) ... and using a push mower all for $20.

                    I admit, after looking at the size of the lawns, I think I overpriced them. They would take about 25 minutes to finish with riding equipment. but these are in higher end neighborhoods and we offer extra services along with that price.

                    Comment


                    • #25
                      I agree with all of you. You are all right because you know how the business works. But if you read the first post. I talked about an employee not thinking too deeply about it would think this way.

                      And it is possible to make a living cutting $15 lawns but not practicle for a very long time. (I mean as an employee he was grossing $5 per yard) Unless he doesn't want to grow the business and just make somewhat more than being the employee.

                      as far as having to fix a lawn just because the prior guy charges less isn't always true. as a matter of fact I have a few lawns out of my route that I have subbed out to those guys charging the $20 and let me tell you this guy does a fantastic job. He has been mowing my $40 lawns, trimming, bagging, edging, and blowing off all the debri (or brooming because it looks too clean for a blower) ... and using a push mower all for $20.

                      I admit, after looking at the size of the lawns, I think I overpriced them. They would take about 25 minutes to finish with riding equipment. but these are in higher end neighborhoods and we offer extra services along with that price.
                      I see your point. I would hope that an employee would realize there is much more to it than that and also respect their boss enough to not try to under cut their boss. But, as we all know, there are some real winners out there who think they could do better than anyone else. In the end they will drive their business into the ground because of poor management and lack of business sense.

                      At least that is my take on it.

                      Eli

                      Comment


                      • #26
                        that is true. Eventually they find out the hard way.

                        As they say, just because you are a great landscaper or lawn guy doesn't mean you will be a great lawn care/landscaping business owner.

                        doing the actual work and running the business are two separate things.

                        Comment


                        • #27
                          BINGO!

                          You hit the nail right on the head.
                          Pat

                          Comment


                          • #28

                            And it is possible to make a living cutting $15 lawns but not practicle for a very long time.
                            Only f you plan on living with your parents and driving dads truck. $15 per lawn in my area equates to about $30 per hour. I wont even get out of bed and turn on the Coffey pot for $30 per hours. If I have my A game on during this time of year I usually average about $160 per hour. This of course is a tinny pit smaller if I hire help. I am not sure why everyone ells went into business for themselves. I know this is stupid easy work and some may have started because, well they are stupid. Not to sound rude but they are uneducated and really cant do anything ells "I know a few of them" Others did it to be there own boss, to live a better life making better money than they were before. Shoot, I would charge $6,700 per lawn if I thought I could get away with it. Normally while bidding a lawn I will take a number, this number is the absolute most IO think I can make from that job, then I will knock off a few bucks just to look like a good guy. Every once in a blue moon depending on location for example I may cut my price in half for a neighbor or do it for free for a family member. My prices hover around the $40-$50 per lawn mark and thus far I have only lost one because of my prices.
                            White Company

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                            • #29
                              Ok, so let me play a little evil here......

                              I totally agree that you guys need to charge as much as you can and still get away with it. Many of you say you won't even show up to mow a lawn for less than $xx. But lets be fair. How do you feel about it when you take your mower to the shop and they charge you $xx for the repair, even if it is simple? That is exactly why most shops have a minimum charge of $20+. Lets be fair, and honest about this, how do you really feel about that?

                              Did you feel the same way about this yesterday as you do now that I have pointed this out?

                              I am not trying to be mean, but I think this ball needs to roll both ways. This also goes for when you go to any other business in town. I find this is a very hard one for me to bite but I try to be fair in the matter. For example, if I have to buy parts from other dealers, because I can't buy them from other sources (like certain John Deere parts) or need them TODAY and don't have them in stock, I won't shy away from paying full price (even though in a round about way it gets passed on to the customer, I am not making any profit typically on these parts). But, that is a bullet I feel like I need to bite. I don't ask for a discount because they need to make a profit too. I need them to stay in business to help me out! lol I don't want to service all the losers myself! lol

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                              • #30
                                Ok, so let me play a little evil here......

                                I totally agree that you guys need to charge as much as you can and still get away with it. Many of you say you won't even show up to mow a lawn for less than $xx. But lets be fair. How do you feel about it when you take your mower to the shop and they charge you $xx for the repair, even if it is simple? That is exactly why most shops have a minimum charge of $20+. Lets be fair, and honest about this, how do you really feel about that?

                                Did you feel the same way about this yesterday as you do now that I have pointed this out?

                                I am not trying to be mean, but I think this ball needs to roll both ways. This also goes for when you go to any other business in town. I find this is a very hard one for me to bite but I try to be fair in the matter. For example, if I have to buy parts from other dealers, because I can't buy them from other sources (like certain John Deere parts) or need them TODAY and don't have them in stock, I won't shy away from paying full price (even though in a round about way it gets passed on to the customer, I am not making any profit typically on these parts). But, that is a bullet I feel like I need to bite. I don't ask for a discount because they need to make a profit too. I need them to stay in business to help me out! lol I don't want to service all the losers myself! lol
                                Lawn care is not small engine repair so its hard to compare the 2. That being said nothing has gone wrong with my tractor so I have not had to work on it myself but if I did that exactly what I would do. I am not going to pay someone to work on something I am 100% capable of doing myself. As far as the push mower if it craps out it goes in the trash and I buy a new one. You see because I mow lawns for $40-$50 I can afford to do this. If I did it for $10-$15 I would be screwed in the event of equipment failure.

                                You see here is my feeling. The average person can NOT work hard and fast enough to mow enough $10 lawns to make any money. In order to mow enough lawns you would need to hire help which will cost you at least $8 or so an hour plus WC, You would make no money after the insurance, not to mention gas and upkeep. No matter how you look at this situation you are just pissing in the wind plain and simple. Now if you are unemployed and need to eat then fine mow $10 lawns, do it illegally under the table and do what you have to do to eat but if you are not that hard up why Screw yourself that way? Leave that for uncle Sam to do.
                                White Company

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