Is It Worth It?

[JoeinTX]

"I would also look for a business that will net 20%...."


Just curious, IC, but what is this 20 percent representative of? Total investment? Monthly overhead? Monthly/yearly gross income vs. all costs?

I've used a number of the online small business calculators but none of them are exactly made for my situation since I'm not looking to borrow anything and have no substantial fixed costs.......the graphs are all skewed and geared more toward loan payment figuring.

 

[mjncad]

Welcome LarryR.

If Lonecowboy is still a member, I'd suggest searching for his posts and/or private messaging him and see if he's willing to share his insight with you as that is how he makes a living. I just haven't seen him post much lately.

He's a Colorado businessman, that shared his experiences with the group.

 

[The Dougster]

A bunch of years ago I found myself basically in your same position... Horrible economy and no one wanted to hire an old guy at decent wages... After a few months pounding the pavement I pondered the same thing ... going in business for myself.... Ate a lot of beans for the first couple of years and I advise you to expect that... Next bit of advice? Network, network, network!
I am familiar with Navasota and advise you to begin looking at some of those realtor signs that you see advertising large plots for sale... Most that I see are overgrown and not much more than weed patches. These folks aren't going to be major repeat customers but an active realtor may have many locations in the same condition. Introduce yourself to them and create a friendship, i.e., take them out to lunch, coffee, etc.
Careful with your expenses... Rather than buy equipment you need, see about rental availability until you get off the ground and can justify major expenses.
Realize that you will need to set aside 50% of your earnings to cover income tax and social secutity. You don't want any major surprises on April 15th.
I often think of folks that express a desire to be in business for themselves and I cannot help but be reminded of something some wag once said:
"The really neat thing about being self employed is that you get to choose which 70-hours a week that you work." There's a lot of truth in that. Good luck.

 

[LoneCowboy]

No

In a rural area, you have few customers, (since most have their own equipment) and prices are low.
You need to be in a urban rural area. Where prices are high, but parcels are smaller (5 to 30 acres).

The problem is transportation.
You can't transport (legally) anything bigger than 8' wide. But 8' wide doesn't do boo. It's all about # of hours on the machine, the faster you can do the work, the fewer hours you put on the machine. Which means you need a 12 or 15' mower, which means you need a REALLY BIG TRUCK or trailer.
Think CDL, USDOT and all that associated crap.

We don't use our 6' mower for anything over 3 to 4 acres. If I can get the batwing in there, I do it.

Cost of the machinery is $30 to $35 a running hour. That's your cost on every hour you put on the machine. Doesn't cover transportation, etc, only on the tractor.

On the plus side, the grass probably grows a lot more there than here. Here we might get 2 cuttings, sometimes 3 all season. There you should do much better, but it also means that rates are going to be lower.

Stuff breaks when mowing, cut a tire, hit a sign, whatever, it's part of the business, expect to have to cover that. There are days when you end up working for free. (work all day for an $800 job and then cut a rear tire in the last hour, which costs, wait for it. $800)

Don't forget insurance. Liability insurance actually isn't bad, it's the cost of commercial vehicle insurance that's the killer. Figure double a personal truck rate.

I've seen in Texas that they have these large crews of PRIVATE companies mowing the sides of the roads. (3 or 4 tractors with batwings), that would be the ticket. Gauranteed money, gauranteed work.


HTH

 

[LoneCowboy]

More thoughts
it's a capital intensive business.
Tractor, mower (s), truck, trailer, parts, tools, etc

Lots of money to invest up front. Keeps the competition down (two guys and a truck doesn't work) but also means more to lose.

The weather can blow you up. For example I need to be seeding right now (we don't just mow, we only do that during the summer) but it's snowing. So, I can't even schedule bids, much less work. But it doesn't stop the bills.

You won't believe the amount of money you'll spend on tires. (truck, trailer, tractor). Even the plug fix it kit (which is worth every penny) still won't save you from everything.

States manage to find ways to tax anything and everything used in a business. Here in Colorado they call is a SMM plate, but really ti's just a plate to prove you paid your personal property tax on your tractor. I'm certain all states have something similar. Business's get robbed blind by the tax guy.

Ohhhhh, workman's comp. And personal health insurance is very expensive and almost worthless. But personal health insurance won't cover if you get hurt on the job, that's what workman's comp is for. (it's a scam, but they got you by the short ones)

Don't worry about income tax the first few years. Between depreciation and things breaking, there's no chance of having to pay lots of money in income.

Feel free to PM me.

 

[Farmwithjunk]

Is it worth it? In as few words as possible....? It depends.....

I started a mowing business less than 3 years ago. It's already far exceeded expectations. I was blessed from the get-go with a couple VERY lucrative accounts that put me into high gear from day one. You can't count on that when planning a start-up operation though. I'd consider my current financial situation too. Do you have enough start up capital and enough saved for that "rainy day" to weather the first season?

I started small. It's foolish IMHO to start off with a long list of fancy new equipment (and the debt that goes with such). Start of year two, we bought 2 new tractors and two new batwings. Year three, I just took delivery of two MORE tractor/mower rigs. Before making the latest moves, I had signed contracts in hand that I knew would pay for all the new equipment.

DOn't jump in over your head on a dream. Make certain reality can live up to expectations first. My customers don't care how "GQ" my employees uniforms are. They don't care what color my tractors are. They couldn't care any less what sort of trucks and trailers we haul on. They're interested in a couple basic things. Price and quality of work. (Most care about price MORE THAN quality I'm convinced)

I live in rural central Kentucky. SOME of my work is in urban areas, but the lions share is out in the country. (We specialize in large acreage tracts and highway right-of-ways)

Knock on doors. Learn the fine art of shameless self promotion. I DO NOT believe in using expensive advertising (news paper classifieds, yellow pages, ect) Not enough market for my line of work in those venues.

The question I'd ask myself before diving into ANY new business is, WHAT SORT OF BUSINESSMAN ARE YOU? There are literally THOUSANDS of successful mowing/ag service business's in this country. There are literally THOUSANDS that fail every year too. The difference ISN'T what brand of tractor they buy or what sort of oil they use, it's USUALLY more basic. Some people can operate a business and some people CAN'T.

 

[mjncad]

LoneCowboy:

Thanks for your posts for LarryR.

I used to mow weeds for the neighbors in my small acreage community (2 - 5 acres) as a way to earn extra money. I learned a lot from your posts and when I found out I needed an SMM stamp to be kosher with the tax parasites, I quit the mowing sideline as I wasn't making that much to justify the SMM stamp and the other headaches associated with trying to make a buck with my tractor.

I'm glad to see you still read TBN.

 

[LBrown59]

SMM stamp

What is it???

 

[LarryR]

Yes, what is an SMM stamp?

And thanks to all for the education in these posts.

 

[LoneCowboy]

Yes, what is an SMM stamp?

.

Special Mobile Machinery.

self-propelled, used commercially, off your own property. (notice that definition includes lawn mowers)

This only seems to be true in Colorado, no one else has found such a thing thruout the US. (it's not bleeping cheap either, figured by weight and value. for example, my 2007 TC45 is $500 this year!!!!).

You get a plate if it's ever going to be on the roads. (I always get a plate and then I feel fine riding down the road at 13mph, too bad, so sad, I paid my taxes). You get a stamp if it's not going to be on roads. (typically tracked machinery). The cost is the same.

The fine is double the tax if you get caught.

I have however found out that there is in Colorado what is called business personal property tax also. Anything used in your business is supposed to be taxed each year (how stupid is this BTW? I should pay again for it?). The SMM plate/sticker basically pays this tax and proves it when it's mobile.

I am CERTAIN that all states have some kind of this personal property tax that you are supposed to pay.