Should You Buy a BIGGER Mower? This Equation Will Tell You!

Hey, everyone, my name is Mike Andes. I'm the founder of Augusta Lawn Care Services. We have over 65 locations around North America. And today I'm going to be talking about what type of mower you should be buying. And more importantly, should you upgrade the current size of your mower and pay that extra premium price in order to get a larger mower, which will obviously make you more efficient. So I'm going to actually run you two scenarios. One that I would approve of someone buying and upgrading their machine and a second one that I would disprove in order to say, hey, look, you should not buy this piece of equipment. Equipment. And pay the extra money to upgrade to the larger mower. So I'm gonna jump into that. Before I do though, make sure you sign up for Landscape Summit 2022. It's coming up in January, it's gonna be three days. It's gonna be solid advice and really hardcore business principles. And so network with other people. Listen to myself as well as a speaker that we're having, Marcus Vandervleet, who travels the country doing lots of consulting and speaking for landscaping companies. So really looking forward to it. He's built a massive business, $7 million in revenue that does hardscaping. Obviously I focus more on the maintenance recurring, creating more systems that are small all across the country, things that work are more simplified. So really good balance, I believe. And I think you're gonna learn a lot. So check it out. It's $299 per ticket. Include your meals for Friday and Saturday. And so it's a Thursday, Friday and Saturday event. And I think it's gonna be great. So check it out. Landscapebusinesscourse.com conference so today the question is to buy or not to buy the next sized mower, the step up. So the first option we're going to talk about today is a 48 inch. And you're like, well, should I buy a 60 inch mower? So you're basically adding 12 inches of deck size. And what I'm not taking into account today is indirect cost. Things like the fact that having a bigger mower is going to mean a lower fuel efficiency, it's going to mean more insurance, it's going to mean a bigger trailer. Or we're just going to look at a very, very simplified way to compare these because if you get really in the weeds and the numbers, no one would watch the rest of this video. So I'm going to give you a really good rule of thumb and I'm going to give you A hard set number on whether or not you should buy equipment. And let me just give away the punchline. If you can't make the money, make the money back. Make your investment back from the money you're going to spend to upgrade your mower. If you can't make it back in one year, I would recommend not buying it. Because if I can't make it back in one year, I'm going to use that piece of equipment for maybe four or five years. If I can't 4 or 5x my return, like 4 or 5x my investment, I don't really want to buy the equipment. That's just my personal belief and that's kind of how I run things. If I am only going to double my money and I'm going to spend $5,000 and get 10,000 back over the next five years, not a great return on my capital. So stick with me though. Let me explain in more detail. So we're going to first assume that we're going to upgrade from a 48 inch mower to a 60 inch mower. Now, the difference between the 48 inch mower and a 60 inch mower, we're going to assume is $4,000. Alright? So the difference is going to be $4,000. So just for example, the 48 inch might be 7,000 and the 60 inch might be 11,000. All right? But the difference in purchase price is going to be $4,000. Now, on an annual basis, we're going to also assume that having that larger mower is going to increase our maintenance. Let's just do maintenance. It's going to increase our maintenance cost by $500 per year. It does not mean our maintenance cost is $500. It means it's going to increase our maintenance cost by $500. Which means maybe for the 48 inch mower is 1000. Getting the bigger mower, bigger engine, more oil, more blades, et cetera, is going to cost us an additional $500 per year in maintenance. I know I'm not doing this by the hour, which is the most accurate way to do this, but I'm showing you a very rule of thumb way to determine whether or not you should upgrade your equipment. Alright, so what we're going to now assume is that by having this upgraded piece of equipment an extra 12 inches to the deck, we're going to assume that we're going to make an extra $50 per day. And we're going to assume that because our average lawn is $50 per cut and we believe that we can get one more lawn mowed on our route per day that we use this larger mower and we're going to get that one extra lawn done. So simply because of this upgrade. Alright? So because I went from a 48 to a 16 inch mower, I'm going to get one more lawn done per day that I use that mower and therefore I'm going to make $50 per cut extra per day. Now, I'm going to assume here that then in order to recoup this acquisition price, the extra $4,000, I need 80 days worth of mowing. And also in order to recoup the extra cost of the extra maintenance, I need an additional 10 days of mowing in order to recoup my cost, which means it is going to take me 90 mowing days in order to recoup the investment of this extra additional cost incurred by upgrading my mower. So, 90 days, well then I gotta say, okay, well if I mow four days per week, I'm using that mower. So then I'm going to do 90 divided by 4, it equals 22.5 weeks.

So what this is is the break even point or when can I get my money back? When can I get all of my capital that I invested back from this mower? In this case, upgrading from a 40 inch to a 60 inch mower with a difference cost between the two machines of $4,000 and increased cost of $500 per year for maintenance means that if I'm going to mow an extra lawn per day, and one lawn is $50, that I'm gonna have to mow 90 days in order to recoup all that money. Now, if I mow four days a week, that means in 22 and a half weeks I'm going to recoup this investment. And then everything in the future is money in the bank. It's literally every single day I'm making that extra $50. And it is fantastic. This is usually for most of us going to be maybe half or two thirds of a mowing season, 22 and a half weeks. This is approved. So again, this passes the kind of quick check, the quick test of can I pay off and can I recoup my investment in under one year. Now I could obviously change these variables and say, okay, well actually I'm going to get an extra $100 a day because it's going to get me two extra lawns. So whatever it is, these are the math that you can do to determine if you should upgrade your mower. Now let's go ahead and change the variables here. So instead of going from a 48 inch mower to a 60 inch mower, just for the sake of this example, I'm going to go from a 21 inch push mower to a 48 inch push mower. And the difference in cost here between a 21 inch mower and a 40 inch mower is going to be $7000. Because I might be able to get this 21 inch mower for like 11 or 1200 bucks. This is going to be like 8000, whatever it might be, depending if you have to get bagger in our market, we have to get baggers, we're looking at 10, $11,000. But anyways, the difference of cost, the acquisition would be $7,000. And the difference in maintenance every single year between a 21 inch mower and a 48 inch mower is going to be pretty significant. Because now in a 20 inch mower I don't have hydro oil, I don't have as many blades, so quite a bit less maintenance. But per year that I'm going to have on this 21 inch mower. So we got a difference of acquisition of 7,000, a difference per year of $1,000 in maintenance costs. Now let's assume that we have smaller properties. Again, these are all variables. I'm not trying to make a point here as much as just giving you a formula for determining whether you should upgrade the size of your equipment. So we're going to assume that this business has smaller properties. We don't mow large properties. So the average lawn is like $40 per cut. And so therefore, by going from a 21 inch to a 40 inch mower, because we have smaller properties, we only use that 40 inch mower on maybe let's say 30 or 40% of our lawns. We use the 48 inch mower because we're doing maybe 2, 3, 4,000 square foot lawns mostly using a 21 inch mower, simply because we gotta get through gates or there's steps or whatever it might be. And a 48 inch mower doesn't really save us any time, but it's gonna save us a little bit of time and it's going to give us an extra lawn per day. So $40 extra per day by going from a 20 inch mower to a 48 inch mower. Now this is where it gets interesting because I'm making $40 extra per day on this mower because of going from a 21 inch to a 48 inch. The difference of the acquisition price is now going to take me a whopping. Let me see here, I didn't do the math for, but basically it's $8,000, right? Because I got an extra thousand dollars in maintenance as well as the $7,000 for acquisition. That's a $8,000. So combined, that's going to take 200 days.

In order to recoup the cost of the difference in acquisition as well as just one year's worth of extra maintenance. Again, I have hydro oil filters on the zero turn mower, I have more belts and blades, etc. So now it's going to take me 200 days of earning $40 per day extra by upgrading this equipment. What that means now is if I mow 40 or, sorry, four days per week, it's going to take me a whopping 50 weeks in order to recoup this cost. How do you do that math? Simply it's like, okay, I have $8,000. It has to be 200 days of $40 per day to recoup 8,000. And if I'm gonna mow 200 days at four days per week, then it'll take me 50 weeks. If I'm mowing like 30, 30 weeks or 35 weeks in a year, literally I'm looking at 1.5 years in order to recoup the money on this mower. And I don't think that passes the quick test of whether or not I should get this piece of equipment. Now, I know this is not the most accurate way to do this calculation because you could break it down how many hours you actually use this piece of equipment. But in my opinion, this is a good way to do it because at the very worst, you're not using this piece of equipment and it's sitting there. It's inventory. It is a piece, an asset that's not being utilized. An asset utilization at the end of the day does cost you money. You got to haul that 48 inch mower on a trailer. And that trailer now has axles and it has brakes and it has wheels. So at the end of the day, this is a quick test to determine, okay, what's the difference in acquisition cost, what's the difference in maintenance cost by upgrading the size of equipment? And then realistically, how much more money is going to earn me per day? Is that one lawn a day? And then if so, well then how many days am I going to have to mow in order to recoup all those costs? And then if I mow four days a week or five days, a week, or whatever you do, figure out how long is it going to take me to recoup this money? And if it's less than a year, I usually say go for it. Because a mower will typically last three to five years, depending on how many hours you use it and how well you take care of the maintenance. But if it's going to take me one and a half, two years just to recoup the money, let alone actually make a profit, I'm usually not interested. These are assets that go down in value. Mowers go very quickly down in value. In a year and a half, it's not worth 11,000 or $10,000. It's worth a lot less once you put 4, 500, 600 hours on it. And that's something that you got to take into account. So there's a really quick and dirty way of deciding whether or not you should upgrade the size of your mower based upon if it actually moves the needle for your business. I'm not trying to make a point here. I'm really not trying to say you should or should not buy bigger mowers. I'm just saying run the math as a really quick, dirty way of how much money is it making me per day? More, in addition to by upgrading this equipment and whether or not you should actually make this investment based upon return on investment roi. I'm Mike Andes. We'll see you tomorrow.