New at this please help

[timm5544]

My friend and I are starting a new lawn service business in Ohio. we have some decent used equipment and are going to do mostly residential properties at first. We plan to mow, edge, trim and blow. We also plan to try to up sell mulching, weeding and gutter cleaning. The equipment belongs to my partner and we agree that the equipment he comes in with will be his and anything I come in with will be mine. And any profit and equipment we acquire together will belong to us both 50/50. I have several questions about getting started. Please advise if you can. 1. How much should we pay ourselves and keep for service/repair of equipment and keep for purchase of newer/better equipment? If you could put it into percentages that would be great. (we talked to a local equipment dealer who also owns a lawn service business who states that he splits it into 1/3 labor 1/3 equipment upkeep and 1/3 profit.) 2. Is there a rule of thumb on how much to charge to mow based on sq footage? Or based on man hours (both of us working on the project) 3. Do we charge extra (how much $)for the first mow if there is edging to do that has never been done before or is very overgrown? 4.How often would we upgrade equipment? 5. How often would we "service riding mower, trimmer, trim mower, and blower ? (oil change, plugs, filters, blade sharpening)? 6. What is the best way to market our business in the beginning? 7. How much to charge for mulching? 8. Would " Quicken Home and Business" be adequate to keep track of our various expenses and upkeep and upgrades. and be able to keep track of each of our customer accounts, including keeping track of income from each account and accumulative income all together and keep track of unpaid customer accounts ?? 9. How much discount to offer if the customer will sign a monthly/yearly contract? Is there a cancellation fee assessd to the customer for cancellation of a contract? i was told that in Ohio, one would expect to mow a lawn 25 times a year on average. Does 25 sound like a reasonable number for Middle/Southern Ohio?? Sorry for so many questions at once. Any advice would be welcomed and appreciated. Thank You and God bless you. Tim

[ToastedToad]

Lawn care business tips

As far as software goes, I'm using Google Apps/Docs and Gopher 2006 to run my new business. Gopher is pretty sweet, and it's made right here by the folks who run this forum, so we can pay back for all the great advice. I try to double the price of my first mow if it is out of control, most folks have not had a problem with it. I figure it will take twice as long so I charge twice as much. I'm sure the vets will stop by and help out with your other questions. Welcome to the forum and the LCO family!

[Steve]

The equipment belongs to my partner and we agree that the equipment he comes in with will be his and anything I come in with will be mine. And any profit and equipment we acquire together will belong to us both 50/50.

Welcome Tim to our forum!

Are you concerned at all this is going to turn into a mess quickly?

1. How much should we pay ourselves and keep for service/repair of equipment and keep for purchase of newer/better equipment? If you could put it into percentages that would be great. (we talked to a local equipment dealer who also owns a lawn service business who states that he splits it into 1/3 labor 1/3 equipment upkeep and 1/3 profit.)

Why not split the income equally and then split the expenses equally?

2. Is there a rule of thumb on how much to charge to mow based on sq footage? Or based on man hours (both of us working on the project)

Early on, go with a man hour approach. Check your area but maybe try $45 if it is competitive.

3. Do we charge extra (how much $)for the first mow if there is edging to do that has never been done before or is very overgrown?

I would say yes if you are going to be there longer than a normal cut. If you go with charging per man hour, you need to charge for all the time you spend working.

4.How often would we upgrade equipment?

When it calls for it or if you have some money to re-invest that will speed up your production and allow you to make more money with the same amount of time.

5. How often would we "service riding mower, trimmer, trim mower, and blower ? (oil change, plugs, filters, blade sharpening)?

I don't know, it will be based on the amount of usage. Check your owner's manual on it.

7. How much to charge for mulching?

Try experimenting with these lawn care job calculators, they should help you figure out prices.

8. Would " Quicken Home and Business" be adequate to keep track of our various expenses and upkeep and upgrades.

Try the free 30 day trial of Gopher Lawn Care Software.

9. How much discount to offer if the customer will sign a monthly/yearly contract? Is there a cancellation fee assessd to the customer for cancellation of a contract? i was told that in Ohio, one would expect to mow a lawn 25 times a year on average. Does 25 sound like a reasonable number for Middle/Southern Ohio??

You may want to avoid contracts early on until you get comfortable with the business. You don't want to lock yourself into something you are sure you are going to do for the year.
I have seen 5% for an annual contract, 10% off and even two free cuts during the year.

Does this help?

[joe2025]

Hi Tim. Welcome to the lawn care business. Can't answer all your questions but one word of advice for you guys is before you get started decide what you want to do with the income and put everything in writting. Friends or not you need to have the business spelled out and you must have a written agreement. I would go to a lawyer and have him/her write up the agreement for both of you to sign. In the event of a disagreement or a break up of the business you and your partner will have everything in writting so there is no "I said he said".
If you are just getting started you can skip the buying software part for now and use the money to have a lawyer write up an agreement for your business. I speak from experience on this and I would never enter into a business with a partner without first getting some type of agreement made up. It can just be basic for now and revised as you progress.

Good luck in your business.

[Steve]

I speak from experience on this and I would never enter into a business with a partner without first getting some type of agreement made up.

Joe, can you tell us a little about the experience you have had with this kind of situation? Also, any other thoughts on how best to prevent things from unraveling?

[joe2025]

Hello Steve.

In response to your questions I will try to give some advise from my experience.
The bottom line is if you do not have an agreement in wriiting you will not have a leg to stand on if something happens within the partnership. It will become a case of he said/he said. What I mean by this is that the old saying "possession in 9/10 of the law" will hold true. In my case we had equipment that my so called "partner" took possesion of (stole) and I had no way of disputing the ownership. Although I had a copy of the receipt for the equipment there was nothing spelled out in a partnership agreement that stated "who" owned the equipment. He also went behind my back to the customers we had (which were large commercial accounts) and lied about who was in control of the cotracts. Although there is not much you would be able to do about this, if you have a written agreement you may be able to use it to sue for damages in the event something like this happens to you. It's an expensive lesson to learn the hard way.
So as I said before friends or not get it in writting because you never know what the future will bring. If we all knew that we can all win the lottery every week and not have to work for a living.

iI read your response to Tim's questions and agree on what you said, although I would have advised a little differently. Not to say that any answer is the right or wrong answer because everyone has a differnet goal in mind.
For example: Tim had asked about how much they should pay themselves. My answer would be "nothing". Depending on if they are doing this to make a living from the start then by all means pay yourself. If not my suggestion would be to build up cash in the business if you want to grow. I got back into this business a little over two years ago and I have yet to take any money for it. I have taken very little for myself. I have invested most back into the business, buying equipment and so on. As well as building a cash balance. You need to remember that if you are after large commercial accounts as in my case, you need cash to carry you until you receive payment which in some cases can be two months from contract signing. I have several large commercial snow plowing accounts and need to have a large amount of cash on hand at the start of the snow management season to carry expenses (fuel, payroll, material,equipment rentals, etc..) until the first check comes in. This can be several thousand dollars.

Sorry for being so long here but I know of no other way to explain it.
My thought is that if you want to grow you need to suffer a little in the beginning to climb to the top and stay there. And the last thing you need to loose sleep over is your partner thinking differently than you. So get it in writting and plan meetings at a minimum of once a month to discuss the direction of the business. If things change from the original agreement make sure to modify the agreement to reflect the changes. List all equipment that the "company" owns and what the percentage's of ownership is.

The only other advice I have after looking at Tim's questions is when he asked about charging extra for the first mow if there is edging that has not been doen before or is overgrown. My thought is to say no. If it is a new customer why not get their property in good condition and maintain it the way a professional would without charging extra. If you spend a little extra time to make their property look professionally maintained it is like free advertising for you and your "new" client will tell their friends what a great job you are doing and this will lead to new business. Sometimes you have to give a little to move ahead. This is very true when you are first starting out. The longer you do it the more efficient you will become.

Last thought before I put you to sleep is forget about a contract for residiential clients. As far as I'm concerened they are a waste of time and in some cases scare some people. I find most residiential clients do not feel comfortable with a "contract". All you really need to do is to send them a letter of intent to pay when they agree to hire you for your services. Now this is not for everyone and if you are doing an upsale for other services like tree cutting or mulching by all means draw up a contract to protect you and your client. Again this is just my feelings and everyone is different.

Bottom line in you are only going to become better at what you do by making some mistakes along the way. Sometimes you will under bid a service and not make as much as you should and other times you will over bid and not get the job. So when first starting out you need to ask yourself, do I want the job so I have cash flowing or do I price high so I can hit a home run. My feeling is that I would rather have 100 accounts that make me profit and if I loose 1 then so be it or would you rather have 1 account that makes you a ton of money but if you loose the account you have nothing.

No matter what, when you are in a partnership you need to have everything in writting and you and your partner need to talk about your business as often as you can. Even if you disagree on some things it's better to discuss it and come to and agreement as things happen rather than have to try and figure things out in court.

[Steve]

All you really need to do is to send them a letter of intent to pay when they agree to hire you for your services.

Can you tell us a little more about what this is? When would this be sent and what should you include in such a letter?

How does this differ from a contract and why do you feel it is better to use?


Also as far as partnerships go. With your experience with them, what is your view on why you went into one and if there were warnings signs that were going on that you might have ignored as they were happening that now seem to be clear and that others need to look out for as well?

[jymie]

Ive been changing my mower oil every 50 hours of operating time.