Mazda 3 and Lawn Mowing :)

[GreyGhost]

If you overplay the home / business ratio does your house become subject to partial capital gain when you sell? I had an office in my home but never had anyone come to it but still had insurance issues because some twit underwriter saw it as a liability.

According to my accountant, no as the company did not contribute capital, you are just writing off a portion of the operating expenses. On the other hand, if you start using company money to renovate your house, you can find yourself in an ugly situation.

 

[J_F]

That's a bit of a pessimistic outlook. You didn't mention the upsides: flexible schedule, liberty of self determination (no boss), lucrative tax writeoffs (vehicle, home, fuel, and others).

If you are prepared to work hard, learn how to do the operations side of a small business, and provide great customer service you can make lots of money in a small home services business. I know a several sole proprietors who pull 6 figures working 35hour weeks -- the successful ones do three things very well: scheduling, customers service, attention to quality.

we both forgot an essential activity that will chew up your time
collections
not bad once you grow and have some workers under you
but when just starting out this is time wasted that doesn't generate any revenue

the key is not get too far in the hole with someone that is slow to pay
it's a difficult thing to do if a customer is keeping you busy
but early on in the relationship if there are problems
you need to cut the chord and let them go

 

[GreyGhost]

we both forgot an essential activity that will chew up your time
collections
not bad once you grow and have some workers under you
but when just starting out this is time wasted that doesn't generate any revenue

the key is not get too far in the hole with someone that is slow to pay
it's a difficult thing to do if a customer is keeping you busy
but early on in the relationship if there are problems
you need to cut the chord and let them go

On the upside, the kind of dirtbag that doesnt want to pay for services rendered is often the type of person that wants to appear outwardly successful and their uncut lawn will be a sore point they want to correct.

 

[Mad Mike]

Tax write offs are joke. When you drive a company vehicles you get hit with a stupid "Taxable benefit" hit. It's called a standby charge. If you can get by with used vehicles that have dumped on the depreciation bit you're better off owning a vehicle and charging the company the government approved rate for your mileage, about $0.50 / Km.

If you overplay the home / business ratio does your house become subject to partial capital gain when you sell? I had an office in my home but never had anyone come to it but still had insurance issues because some twit underwriter saw it as a liability.

I agree there are benefits, the reason I ran my own business. However every customer is a boss.

I'll address these one by one.

First, a service vehicle can be a 100% write-off. Insurance, fuel, maintenance and full CCA depreciation. There is no taxable benefit to a self employed individual in a sole proprietorship. If you have an additional vehicle, say a car, you can deduct a percentage of that car's use as related to business.

You can deduct a minimum 10% of your home expenses (rent, taxes, HLW, cableTV, home phone, financing costs) as eligible business expense. More if you can prove you use more. You can deduct 100% of your home internet and cell phone costs.

If customers come to your home office there is no additional insurance required, your business liability insurance covers your office. (in the case of landscaping -- they are not bringing their lawns over to be cut, likely visits are to discuss business and pay bills).

You get back 100% of the GST you paid on business expenses.

At the end of the day it's no joke. Cut grass and make 60K over the summer as a small business and you will likely pay zero (or near zero) tax. Cut grass as an employee and make 30K -- you will probably pay $10K in income and sales taxes.

 

[Mad Mike]

we both forgot an essential activity that will chew up your time
collections
not bad once you grow and have some workers under you
but when just starting out this is time wasted that doesn't generate any revenue

the key is not get too far in the hole with someone that is slow to pay
it's a difficult thing to do if a customer is keeping you busy
but early on in the relationship if there are problems
you need to cut the chord and let them go

The key is to run without receivables. Zero / notta. It's not always possible, but way too many small business people are too generous with credit.

I coached a young fellow a few years back, he had 70-100 invoices outstanding at any given time, $20-$30K. He spent 10-12 hours a week collecting, plus the cashflow dent made running his business hard. We got him a small Moneris credit/debit terminal and changed to payment at time of service with zero impact on revenue. The upside was better cashflow and no time spent on collections.

Not all business can do this, in and out home services like lawn cutting, pool cleaning have no trouble demanding payment at the time of service.

 

[black_CG2]

The key is to run without receivables. Zero / notta. It's not always possible, but way too many small business people are too generous with credit.

I coached a young fellow a few years back, he had 70-100 invoices outstanding at any given time, $20-$30K. He spent 10-12 hours a week collecting, plus the cashflow dent made running his business hard. We got him a small Moneris credit/debit terminal and changed to payment at time of service with zero impact on revenue. The upside was better cashflow and no time spent on collections.

Not all business can do this, in and out home services like lawn cutting, pool cleaning have no trouble demanding payment at the time of service.

That is quite smart. Most likely, we will approach the same route too.

For now, clients send us etransfer when we are at the site. We take before pics and send them. Then once the job is done, after pics are sent. Clients say "Thank you!" and we move on.

 

[Mad Mike]

That is quite smart. Most likely, we will approach the same route too.

For now, clients send us etransfer when we are at the site. We take before pics and send them. Then once the job is done, after pics are sent. Clients say "Thank you!" and we move on.

That's a great approach, most homeowners respect small service providers and are happy to settle payment once services are rendered. If you offer credit or "pay me later" terms, somehow they change their feelings about payment -- so just don't do it! E-transfer is a great option, most can do that today.

Here's another tip: open a free account with a web based scheduling company. I'm familiar with Setmore.com, the kids I help all use this as a way to track appointments, and collect payments. If you want to go further, https://squareup.com/ca/en/hardware/readeroffers offers a wireless debit/credit card reader with free billing software for $60, makes a small business look BIG.

 

[nobbie48]

I'll address these one by one.

First, a service vehicle can be a 100% write-off. Insurance, fuel, maintenance and full CCA depreciation. There is no taxable benefit to a self employed individual in a sole proprietorship. If you have an additional vehicle, say a car, you can deduct a percentage of that car's use as related to business.

You can deduct a minimum 10% of your home expenses (rent, taxes, HLW, cableTV, home phone, financing costs) as eligible business expense. More if you can prove you use more. You can deduct 100% of your home internet and cell phone costs.

If customers come to your home office there is no additional insurance required, your business liability insurance covers your office. (in the case of landscaping -- they are not bringing their lawns over to be cut, likely visits are to discuss business and pay bills).

You get back 100% of the GST you paid on business expenses.

At the end of the day it's no joke. Cut grass and make 60K over the summer as a small business and you will likely pay zero (or near zero) tax. Cut grass as an employee and make 30K -- you will probably pay $10K in income and sales taxes.

The 100% write off only applies to a vehicle that can't be used for any other purpose. If you can unload the mowers and go grocery shopping you get hit with the standby charge.

The insurance is dependent on the insurance company. Been there done that.

You don't get 100% of entertainment expense GST.

 

[Mad Mike]

The 100% write off only applies to a vehicle that can't be used for any other purpose. If you can unload the mowers and go grocery shopping you get hit with the standby charge.

Possibly only if you are wildly offside. If you claim "service vehicle" you are good. If you have another vehicle, even a bicycle, you are out of the woods from a tax audit perspective.

The insurance is dependent on the insurance company. Been there done that.

If you do work on premise you need to be careful. For a lawn cutter, ther eis no relevant reason for business customers to visit his home so homeownership insurance will cover him.

You don't get 100% of entertainment expense GST.

True, but lawncutters won't usually have those. If you have a good accountant, you can deduct reasonable entertainment expenses -- my advice is to stay below 5% of revenue otherwise the CRA may bring out the anal probe.

 

[mimico_polak]

I’ll talk to my wife but I doubt she will want to be mowing our new property. So if you’re doing the Credit Woodlands area I’ll talk to you once we close on the sale.

 

[black_CG2]

Bump to my thread.

Someone mentioned that there is dough in dirt. I am looking to find those "dirt" places. I heard some people are contracted to do cleaning on parking lots during night time or mornings. They get paid pretty well.

I enjoyed lawn mowing but I would also entertain/look into other options of running my own business.

 

[Trials]

Old people with nice places and bags of money that simply can not do snow removal themselves. You be amazed how many are out there,
they just want somebody polite trustworthy and reliable to commit to the task and follow through with doing it. People going on vacation too, they need their walks cleaned. lol that was one of the ways I made money to buy my first motorcycle.

 

[oioioi]

So how did your gig turn out.

Did you enjoy it but are moving on to other ideas or ......

Fill us in if you don't mind sharing.

 

[J_F]

could look at into commercial property maintenance
strip malls, apartment buildings etc

lots of work all year round - grass - shrubs and plants
parking lot sweeping, asphalt sealing, line painting,
weed control, rubbish removal
may or may not involve snow removal

contacts would be property management firms
the larger ones handle multiple properties
get a relationship established with one of them, you'd stay busy

where there's dirt, there's dough.... is one of my motos
I don't get dirty anymore, but it's served me well

 

[black_CG2]

So how did your gig turn out.

Did you enjoy it but are moving on to other ideas or ......

Fill us in if you don't mind sharing.

I loved it! Working on a plan to grow with the ideas below. I know it has not grown to a business yet where I would employ ppl. However, I enjoyed every moment of it. I did not advertise much either. It was all from Kijiji and word of mouth.

could look at into commercial property maintenance
strip malls, apartment buildings etc

lots of work all year round - grass - shrubs and plants
parking lot sweeping, asphalt sealing, line painting,
weed control, rubbish removal
may or may not involve snow removal

contacts would be property management firms
the larger ones handle multiple properties
get a relationship established with one of them, you'd stay busy

where there's dirt, there's dough.... is one of my motos
I don't get dirty anymore, but it's served me well

Thanks!

 

[mimico_polak]

You doing snow removal CG?

 

[GreyGhost]

You doing snow removal CG?

Plow on the Mazda 3? Market it as smaller and more environmentally friendly for the urban market. Actually, you probably could use a trailer hitch to attach a rear blade.

 

[mimico_polak]

Plow on the Mazda 3? Market it as smaller and more environmentally friendly for the urban market. Actually, you probably could use a trailer hitch to attach a rear blade.

You could....or you could start small with shovels and build up.

I've always wanted to do what the OP is doing, but with being away so much there's really no way I could support such a business with a 3 week absence from Toronto. Not with snow anyway, but lawn care maybe.

 

[black_CG2]

You doing snow removal CG?

no.

 

[black_CG2]

You could....or you could start small with shovels and build up.

I've always wanted to do what the OP is doing, but with being away so much there's really no way I could support such a business with a 3 week absence from Toronto. Not with snow anyway, but lawn care maybe.

Hmm....let's see.