Create a five-team landscaping business

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Reference no: EM13962954

Business Profile: The Cutting Edge-Landscaping

Vision

The vision of the entrepreneur is to create a five-team landscaping business that caters to upscale neighborhoods in Miami, Florida. The company is to be called The Cutting Edge. The goal of the entrepreneur is to generate income of at least $42,000 per year as his personal salary, as well as profits of 4% after tax no later than the second year of operation. The entrepreneur intends to buy a route of 100 homes from a lawn service company whose owner is retiring.

Strategy

a) Market Focus and Analysis

The landscaping business targets upscale neighborhoods with home associations that demand lawns to be manicured and well cared for. Customers tend to be upper middle to upper class individuals with household income levels of $110,000 or more. The geographic focus is Miami and its surrounding area. The area is expected to show slow economic growth of about 1% per year over the next 5 years.

b) Product

The product is lawn maintenance and landscaping services as well as minor irrigation equipment repair. The primary source of income is expected to be in the form of lawn-cutting, debris-blowing, and edge-trimming services. However, the company will also do reseeding, landscaping and foliage or tree planting, tree trimming, and light irrigation system repair when necessary to keep its customer's lawns watered and healthy.

c) Basis of Competition

Customers hire the Cutting Edge due to its employees' reliability (showing up when they are supposed to), its quality lawn service, and its ability to keep lawn sprinkler systems in good repair, sparing the homeowner the inconvenience of calling a sprinkler repair for minor repairs such as broken or clogged sprinkler heads or other minor sprinkler system repairs.

Start-Up Requirements*

Given Costs

· The cost of registering a limited liability company in Florida-filing fees listed at the bottom of the application located at https://form.sunbiz.org/pdf/cr2e047.pdf

· Business insurance, estimated at $1,000 per year

· No health benefits except for the owner of the business

· Workers' compensation fees

· The cost of the initial route of 100 homes, at a cost of $120,000

Costs you should estimate through research, experience, or other methods

Team equipment for lawn cutting, which includes equipment for a two-person team

A pickup truck

A trailer

A large riding lawnmower

A smaller riding lawnmower

A push lawnmower

Two gas-powered lawn trimmers

Two gas-powered lawn edgers

Safety equipment for eye and ear protection

Tools for minor equipment repair on the job

A drink cooler

Two gas-powered blowers

Two tree or hedge trimmers

Two long ladders

Buck saws for cutting branches

The cost of 10 workers, two per team

All operating costs such as advertising, phone, a small 400 square foot office complete with utilities, Internet, laptop computer, accounting software like QuickBooks, office supplies, and annual depreciation on equipment.

*If you have questions about start-up requirements, or think other start-up costs necessary for the business are missing, then make an assumption and state it in the relevant section of the report. This list is not necessarily complete.

Given Financial Assumptions*

The owner will be granted a loan for the initial start-up, repayable over 10 years at current interest rates for small business loans.

The owner will use personal funds to operate the business until it generates enough cash flow to fund itself.

Essentially, 60% sales are made by credit card and 40% are made by check. All credit card sales are paid to the company daily by the credit card company.

A total of 2.5% of credit card sales are paid to the credit card company in fees.

The average lawn service costs $150 per month. Irrigation repairs are minimal at an average of $50 per customer per year, and landscaping and other services are about $200 per customer per year.

Equipment is depreciated on a straight-line basis over 5 years.

The owner has health benefits, and other workers do not.

Each lawn takes about 1.5 hours to cut and manicure, as well as any other repairs or extra services like tree or shrub trimming.

· The entrepreneur will manage the company and draw a salary, but will not service lawns or perform other services.

*If you believe any other assumptions are necessary, please state them in your budget proposal.

Reference no: EM13962954

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