start-up budget

[good shepard]

Hey guys, I'm a rookie to the business in the purest of form. My partner and I are gearing up for our first season in the business. We are going to concentrate on residential lawn care (lots between 1/4 acre to 1 1/2 acres) with the bulk of our business coming from mowing. What type of start up capital are we looking at to get going? What are the essential tools of the trade that we must have to get out the gate? Any advice is graciously appreciated.

[CCLS]

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I would recommend having a working capital that is large enough to carry your business through 4-6 months of operation. Figure out all of your fixed expenses (insurance, phone, loan payment, ect.). Depending on what type of equipemnt you have, you need to have working capital available to cover any unforseen expenses that may arise as a result of wear and tear on your equipment. Your working capital should be large enough to pay all of your expenses for 4-6 months if you don't make a cent. This way your business will not fail because of a lack in capital. Sounds like a lot of money, but you must be prepared so your business will not run out of money.

Question: "What are the essential tools of the trade that we must have to get out the gate?"

Your equipment purchases will depend on your own equipment needs. How many customers do you have? Do they have gated yards? Lots of hills?

When selecting a mower, choose a mower that is compairable to the majority of your accounts. Will the mower fit in the smaller yards? Since you have 1/4 to 1 1/2 acres, I would recommend a 48 or 52 inch walk behind with a velke. As far as other equipemnt goes, I would say start out with:

Straight Shaft Commercial trimmer
Mid-range or higher Backpack blower
Commercial Stick Edger
Hedge Clippers
16 ft open trailer
Minor tools (shovels, rakes, ect)

Good Luck!!!

[Phil Nilsson]

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Like CCLS said ... run up a budget of ALL anticipated expenses ... two kinds ... fixed expenses that will be there (even if you have no customers or not enough) and variable ... the kind that will cost you to "engage" in the work ... that plus a "draw" of paychecks for yourselves. Cash flow it out on paper. When you see the "carrying costs" ... (outlays) you'll know the number of customers needed to cover those outlays.

P.S. Remember that the pymts on equip and vehicles are "investments" that come from profits BUT it's 100% cash out the door in your budget.
The actual cost for each $100.00 in sales are likely to be in the neighborhood of $70.00 to $80.00 ... depending.

A sidebar ... in the early stages of business you are very likely to run a negative cash flow for many months since you have in reserve equipment etc. that is not 100% fully engaged to capacity ... this causes a "bump" in your P&L.

[Seascape]

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I started w/ $2000, a $300 pick up and no equipment. today i better have $15000 at the beginning of each year or im screwed. At least $15000.
mike