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.