Small Field Mowing Business?

[crashz]

I'm contemplating putting my tractor to work, maybe making a little extra cash and someday justifying another machine. Another thing I was thinking is that it would be a business that I could control in case something happens with either my job or my wife's.

I'd like to start very slow, and offer services that I could readily perform today. Which would limit me to my John Deere 770 (24 HP, 21 PTO, loader, (2) 5' brush-hogs and possibly a 5' finish mower) to provide small field mowing.

Massachsetts doesn't have huge farms, yet most farmers would not being willing to mow fields that are less than a few acres. Upstate NY has some big farms, lots of field, but I bet it's very similar. In many cases I can see why its not worth the time and effort for someone with large equipment to mow small fields. I guess competition would basically be the average homeowner that already has a tractor, that can maintain his and possibly his neighbor's property.

I plan on keeping it as simple as possible and planning on 10-12 weekend per year. If it takes off, I'll try to keep up. If not, I will have very little beyond what I already own invested in it. I think the only real out-of-pocket expense will be the overhead invovles with legally starting the business and insurance.

Has anyone done this? I know that there are a few members who do this work, but on a much larger scale. Any tips, advice, warnings?

 

[Farmwithjunk]

OK....See how this pencils out;

1. Liability insurance.
2. legal commercial licensing (and insurance) for truck/trailer (work for money and you're a commercial vehicle.....)
3. fuel. maint, upkeep on tractor/mower
4. depreciation on equipment
5. advertising
6. professional license (as required by locality)
7. taxes, taxes, and more taxes
8. Administrative cost.

Now, You need to turn a enough "profit" to cover those cost before ANYTHING goes in your pocket. It takes a steady flow of work to offset the above.

One bad day of mowing can wipe out a dozen good days.

I can refer you to dozens of guys who found out that "bottom line" is more profitable standing at a drive up window handing out bags of french fries. (and there's a LOT less risk involved @ McDonalds)

 

[tractchores]

An old neighbor used to work with his tractor as his main job. He worked with primarily landscapers and construction as a contractor and did mostly loader type work. He got enough contacts that he seemed to have a job almost every day. If you do it i would make sure to have liability insurance and there could be tax advantages to creating some kind of entity and having your vehicle be commercial.

 

[crashz]

OK....See how this pencils out;

1. Liability insurance.
2. legal commercial licensing (and insurance) for truck/trailer (work for money and you're a commercial vehicle.....)
3. fuel. maint, upkeep on tractor/mower
4. depreciation on equipment
5. advertising
6. professional license (as required by locality)
7. taxes, taxes, and more taxes
8. Administrative cost.

FWJ - I had you in mind when I posted this. Thanks for responding!

I believe I have a good understanding of my costs for items 1-4 above. I think #5 would consitis of a Penny Saver add and maybe some generalized flyers at a few local stores that allow that sort of thing. I see this part as a double edged sword though. If at first you don't suceed, spend more money.

So far I estimate the above costs (for items 1-5, with some variablity) to be about $4050 per year with the possiblity of adding snow plow services into the mix with the truck and adding an estimated fuel consumption with commuter, truck & tractor. A large maintenance cost is included for this little machine to cover maintenance and minor repair. Major repair will come out of my pay below or my pocket.

Assuming I would pay myself $10/hr (which may or may not happen) and assuming 10 weekends /year = $1600

Company profit of 10% of aggregate = $565

Minimum revenue needed = $6215/year or $622/weekend or $39/hour. That could be a tough sell.

Even though I have a "cushion" of $2100 in their for my pay and profit, I can see where this would be eaten up by low ball prices and breakdowns.

Costs for item 6 is not included, but I can't imagine it to be very expensive. I believe I will open it as an LLC or Coproration. A business or landscaping license shouldn't be to bad, but I have not researched that. Thanks for bringing it to my attention.

Item 7 is a huge ???? for me right now. I need to talk to an accountant to figure this part out. This is likely to either make or break the whole thing. There is a lot to consider as far as business taxes, perosnal taxes, assets, etc. The numbers would really have to work in this department, regardless of any actual profit or loss that the company generates.

 

[JJZ 109]

I believe I will open it as an LLC or Coproration. A business or landscaping license shouldn't be to bad, but I have not researched that. Thanks for bringing it to my attention.

Item 7 is a huge ???? for me right now. I need to talk to an accountant to figure this part out. This is likely to either make or break the whole thing.

I have no idea how your state operates LLCs. I looked into this for my business. However, it was fairly expensive to set up, along with legal ads in the local paper to notify the public that were required by my state (NY). Also, an LLC here requires a fee to be paid every year.
Upon advice of my accountant, I set up as a sole proprietor. This way, the biz tax return is filed as a part of my personal return. Much simpler. He advised me that a sole proprietorship with good liability insurance is about as good as an LLC for a small business like mine. He also said that the "shield" created by an LLC can easily be pierced by the attorney of most anybody who wanted to sue you. The only expense was getting a DBA certificate from my county clerk when I named the business.
I also got a federal EIN (employer identification number) and set up bank accounts for the business instead of mixing it in with my personal accounts.
Liability runs me around $600 per year for a $300,000 per incident/aggregate $1 million per year policy.
Getting the DOT numbers is free at the federal DOT's website.
By all means, set up a visit with an accountant. He'll point you in the right direction. But you'll also have the added expense of the accountant doing your income tax every year, unless you're a heck of a lot smarter than I am about such things. Before I started the biz, I used to be able to use the online prep services and be done with it pretty quick.
The accountant will also tell you what you can and cannot write off for biz expenses.
I'm into my business about as far as I'm willing to go at this point. I have a bucket truck, tow behind boom lift, enclosed trailer with a self contained seamless gutter outfit. But I also still work full time at my "real" job, which is nice when unexpected expenses come up or life throws a curve at you.

 

[tractchores]

In terms of an LLC you can set one up in MA pretty cheaply (you can actually have it be based in any state you want and there are advantages and disadvantages of each). In MA the filing fee for an LLC is about $500 per year and is required, everything else is a pass through so the extra tax expense for filing isn't much. There may be some other forms of liability protection that you can use as well (ask your lawyer), most are quite good. In terms of the tax burden, the good / bad part about taxes is you're going to need to turn a profit to need to pay them. You'll be able to eat up a lot of that profit with things like depreciation, equipment costs etc, so it is possible to show a tax loss with a cash profit (I own real-estate and that's the major benefit). I of course would never advise or do this, but people who own cash businesses sometimes forget to fully report all of their income. Depending on specific rules and your situation you may be able to use a tax loss at your mowing business to offset other income you have (but talk to a CPA because there are specific rules around this). I don't believe there is much of if any licensing requirement for landscape services in MA, not sure about NY.

 

[JJZ 109]

I In MA the filing fee for an LLC is about $500 per year and is required, everything else is a pass through so the extra tax expense for filing isn't much.

I think the filing fee in NY is $200, but there was also the legal advertising (another $50 fee) involved and the annual fee. The state's website also recommends legal counsel when setting up as there has to be a written operating agreement among other things. So that would be an added expense. The accountant advised against it for me as an unneeded expense.
But everyone has a different situation and approach to doing things. Hopefully crashz can take a little something useful from some of us who have been down that road and get himself set up. :thumbsup: ✎

If crashz is thinking of setting up in NY, here is a little summary of what needs to be done: http://www.dos.state.ny.us/corps/llcguide.html

 

[TrenaryDucks]

I did some side work last summer with my tractor and six foot rotary cutter. Learned my lesson about mowing fields that haven't been mowed in some time. I found rocks, bent up steel fence posts, etc. when mowing, which really beat up my tractor and mower. Since my tractor is needed for my own farm and livelihood, I gave up whoring out my tractor for chump change.

 

[bigtiller]

I have tilled gardens for many years. I have my "regulars" that work the same way every time with seldom any surprises. But when someone new calls, I can just about bet there will be a problem or surprise to deal with. I can ask all the questions I want but if the owner doesn't know what is under the ground the tiller has to find it without destroying it's self. That is why I replace my equipment with new regularly.

I think you will find the same is true with mowing. You have to love doing it because just about everything is against you from making a profit.

 

[flusher]

I did some side work last summer with my tractor and six foot rotary cutter. Learned my lesson about mowing fields that haven't been mowed in some time. I found rocks, bent up steel fence posts, etc. when mowing, which really beat up my tractor and mower. Since my tractor is needed for my own farm and livelihood, I gave up whoring out my tractor for chump change.

Me too. I mowed a neighbor's 6-acre field while he was recovering from surgery. Found a lot of stuff in the weeds with my brush hog that he didn't remember was there:confused2:. Fortunately the hog survived but the experience taught me to walk strange fields before mowing.

 

[MasseyWV]

You have to love doing it because just about everything is against you from making a profit.

Ain't that the truth! Having owned a small business, I can honestly say that if you do find a way to make any profit, the government will find a way to take it.

 

[Farmwithjunk]

There is a great potential to break even in todays business climate. Then again, I can "break even" parked on the couch watching Andy Griffith re-runs. The potential for turning a worthwhile profit in a new "start up" small business venture is minimal at best at this point in time. With the risk involved in operating equipment for hire, dragging trucks and trailers around on a highway, and all that goes with a small business, I'm back to suggesting a job at that drive up window.....At least you get to look at the occasional pretty girl while working there....

.......Or else jumping into the fray on a larger scale where tight margins still allow a decent net income.

 

[Mark Page]

If you try it be sure to charge enough. You're going to have to squeeze every last dime out of it every way you can or you're going to find yourself swapping dollars.
Don't even think about it without some kind of business insurance.

 

[evan price]

Dunno how things are in NY where you are, but another thing to be aware of is that once you go commercial, you need to have your vehicle plated commercial, and that means you can then be pulled over by your state's commercial vehicle inspectors or DOT men. If you're sticking to side roads and close to home odds are you'll be fine. Here in Ohio the State Highway Patrol has jurisdiction anywhere, and they've made landscaping guys towing trailers a hot-ticket item because they can always find something to write up. Unsecured load, brake light out, improper weight distribution, etc. and suddenly you owe the state all the profit you made this year in citations. Check the rules before you jump in.

I mow a couple properties besides mine (it was a good way to justify getting the bigger tractor and mower) HOWEVER between discovering all sorts of stuff that got abandoned in the field (Ever see what happens when you run over an aluminum baseball bat? A kids tricycle? A 40' dog tie-out chain?) and the fact that one of my people wound up hospitalized, disabled and unable to pay me, I never made a nickle and instead spent money on $4/gallon Diesel fuel and replacement parts.

 

[Mark Page]

The going rate in these parts is $50/hr + $20.00 to show up.

 

[Farmwithjunk]

There are two distinct price structures for mowing in this area. One, which I refer to as "beer money"....operators charge in the $35 to $50 an hour range regardless of size of equipment. They're content to "make a few bucks" (or so they believe) without paying taxes, without legal commercial licensing of tow vehicle, without adequate (any) liability insurance, and without factoring in eventual replacement cost of equipment. They discount the fact they invested thousands in equipment, just to be satisfied with a handful of cash at the end of the day. Their rationalization is, "it won't happen to me" (regarding law suits, encounters with DOT/police, IRS, and expensive equipment failures.

Then there's the guys who run things like a business. Anything less and you belong to group #1.

There is a pool of customers who're OK with having an uninsured amateur running the risk of loosing everything BOTH of them own just to save a few bucks.

Then there's the customers who make contractors jump through hoops to prove they're competent, legal, and qualified.

Neither side of the equation are serious competition for the other.

Question is, which side do you choose to be on?

-----------------------------------------------------------------------------------------

Due to the nature and type of customers I go after, I don't get any interference from the "beer money" crowd. They can't even stick their foot inside the door without meeting the criteria for bidding work of this nature. Then again, I don't take jobs where I'm mowing what I'd consider small acreage, which seems to be the domain of the beer money operators. However, every summer, I get phone calls from a few of these guys, pretending to be potential customers, asking about my rates. I don't have the time, nor the inclination to go into the complexities of rate structure for doing state/federal mowing contracts, dealing with court appointed legal conservators, or operating a business school for the part-time hobbiest.

No 2 jobs are alike. Pricing is determined on a case by case basis. I don't price work "hourly". I give a set final price. It's no ones business except mine how I arrive at that price. I can assure you however, it IS based around the operation of a LEGAL business.

 

[bucktaker]

FWJ
I agree with your stated comments but I believe you are running a large commercial mowing business, very large and professionally run. Which is different than a small field mowing business that could undercut your price due to lower operating costs. Again its up to the customer to decide which operator meets their needs a large commercial operation as yourself or a small independant operator who may or may not have a serious profit motive.
Not everyone needs beer money some are just starting their business.
I am planning on a small field mowing service in select situations more to provide tax write off than a profit maker. have a good day glad to see you are back posting enjoy your comments....

 

[wcampbell47]

Five years ago I purchased a tractor and a few three point implements for my own use. I bought implements that were different than most other owners. Most of the tractor owners have a box blade and shredder. Not many tillers and only one other land plane. My tractor was also much smaller which has proven to be a good thing.

A few neighbors asked if I could do this or that. I charge $50 an hour and that does not seem to be a deal breaker. Some want a contract price. The purchase of the equipment and the resulting write off in a small business is probably more helpful than the income produced, although I do bring in enough to make the monthly payment on the new tractor.

I'm semi-retired and the wife has a good job. I see after the homestead and do small jobs on the side. I just enjoy the seat time and doing the best job I can.

I'm friends with the proprietor of the largest lawn service in the area. I don't even try to compete with him .. but have tried to compliment his work. I have an 800 lb lawn aerator and three point fertilize spreader which he doesn't have.

If you can find a niche where you are different than other tractor owners I think you will have a better chance of bringing in a few bucks on the weekend.

 

[Farmwithjunk]

FWJ
I agree with your stated comments but I believe you are running a large commercial mowing business, very large and professionally run. Which is different than a small field mowing business that could undercut your price due to lower operating costs. Again its up to the customer to decide which operator meets their needs a large commercial operation as yourself or a small independant operator who may or may not have a serious profit motive.
Not everyone needs beer money some are just starting their business.
I am planning on a small field mowing service in select situations more to provide tax write off than a profit maker. have a good day glad to see you are back posting enjoy your comments....

I'd bet you a weeks pay I can mow for LESS cost per acre than a typical smaller independent operator, so long as they're LEGAL. It's called "economy of scale". I can operate on a tighter margin per what ever particular unit of measure (ie acres, hours, ect) with the fact that I have the capability to mow a BUNCH of those acres in a day. I do a number of rather large jobs where we're actually mowing (and making money) for under $15 an acre. Try that with a one man operation using a 6' mower......

Simple fact is though, I'm NOT going to try to compete with those who operate without proper insurance, ect....Those aren't a "business" in my eyes. And if I want to intentionally "lose money" for a tax write off, there's a long list of charities that will accept my donations without my involvement in a venture where I run the risk of a catastrophic event. . Again, I don't consider any business designed to lose money as a valid business....just a tax dodge in plain and simple words....with a great deal of risk for what possible reward there is to be had.

My "beef" (if there is one) is with guys who choose to operate in todays "sue first and ask questions later" environment without insurance, and those who don't do taxes. The risk is FAR greater than the reward....

Think of it in terms of the old saying, "It's all fun and games until someone gets an eye put out". Same thing.....Fun and games until something goes wrong.....and that does happen. At that point, the judge and jury doesn't care why you don't choose to have insurance, or commercial vehicle license, or a tax #, or..........

 

[RDrancher]

I would check out attachments that your local rental yard and tractor dealer have for rent that your tractor will run and offer those services to your customers as well. You could offer services to banks on keeping up their repo's and get friendly with your county ag extension office and let them know that you're available. I get a few referrals from them most years.

I provide brush hog mowing services as a small part of my business using a 6 foot shredder. I mow small lots, under 20 acre fields and hard to access properties with hillsides, etc. Most of the beer money guys around here use older 2WD tractors with no ROPS and only work on the flats.

Working for landowners can be profitable at times and absolutely terrible as well. During last years drought even my regular customers only needed mowing once, and I signed up exactly one new customer. No way could I survive and pay my insurance if I were only relying on that for income.

As has been said before, things you can't see can be time consuming, tear up your equipment or be downright dangerous. One bank repo I worked on was like an overgrown wrecking yard. I actually ran over an acetylene tank lengthwise and when I checked it, it was full! That could have been a pretty bad deal.