Spencer Lawn Care Responded... I Was Wrong!

Hey everyone. Mike Andes with landscapebusinesscourse.com and today I am going to be reacting to so many of the comments and emails and response that I have got from a video I made a couple days ago about buying a new mower and the things you need to think about before you buy a new mower. Now I know everyone's trying to read the text behind me on this whiteboard, but we're gonna get to that. Gonna explain myself, but I need to do this because I'm not gonna be able to respond back to all the emails or the comments, most of the emails and the direct messages and things like that. So I'm going to explain some things and I'm going to show a comment that actually came from Spencer Lawn Care. So in the video that I made a couple days ago, I was referencing Spencer Lawn Care video and they responded back to me. So I feel like now I can actually say who they are. Cause when I say people's names, everyone thinks that I'm against them and that's not the case. I'm trying to bring a different perspective. So that way when we make business decisions, we're making them based upon numbers and not based upon what everyone else is doing on YouTube. Alright, so that's my perspective. And you can tell from mine and Spencer Lawn Care's correspondence that there's no hate, we don't hate each other. So I'm gonna pop it up here so you can read it, you can stop your screen or whatever. You can read the message that Spencer Lawn Care commented on my video. And I appreciate them watching and I want to make it very clear I'm a subscriber to them. I like their videos a lot. I watch most of them, not all of them, but most of them. And the one that popped up on Saturday is the one I responded to about buying a new mower. They went to a Toro dealership and basically kind of showed the highlights of a new mower. And I was trying to be very clear that I'm not against zero turns, but I wanted to show the numbers behind it. So now I need to address all the comments, questions, concerns, people not so happy about some of the things that I said. And I'm gonna clarify my stance. And I'm doing this only because there are so many people that have questions about this stuff and I wanna make it very clear. Cause again, I am doing this for my 18 year old version of me starting a lawn care business. I am not doing this for those of you out there that are watching videos on YouTube for entertainment. I am doing this for the business person that is serious about growing their company. They're wondering why they aren't making money in their business. They're wondering why they work so hard and there's bank at the end of the day. Because that's a majority of landscapers, okay? And so I want to go over some of these numbers. I want to go over these things. I want to make it very clear I am not against Spencer Lawn Care. I did not use their name in the first video. And I only use people's names in videos because I do want to attract their audience to give a secondary perspective. So some of you are like, you're trying to get their audience, you're trying to like use their name in your videos. You're right 110%. I'm trying to tap into that audience that sees their video, sees all the features, and then is able to get a perspective from a number standpoint. Cause that's not usually what's offered in their videos. That's not to say that their videos are not good. They're very entertaining, they're very educational. Those are all very good things. But I'm trying to get the business and the numbers side of things, okay? I'm not gonna get a lot of views. I know that the other side makes more views. I'm trying to educate the person who's really serious. Like I was when I was young as a teenager trying to figure this stuff out and watching video on YouTube. Okay? So first things first. Form 4136. So this is a tax credit for off road vehicles. This is gonna be for industries like farming. Landscaping is another industry that we can use this for. I wanna make this very clear. The vehicle needs to be off road. Which means you cannot get this tax credit for your trucks and for your equipment that goes on the road. You can only get it for mowers, wee whackers, chainsaws, the smaller equipment. If you look at the function of your total tax liability when it comes to fuel taxes, I would imagine that probably less than 10% of it is actually off road. Mowers and weed eaters. Cause most of the time your big trucks that you put 30 gallons of fuel into, that's the ones that use most the fuel. Now if you have big zero turns, obviously that's gonna be a bigger differential. You might have 20, 30% of your fuel that use in your business is actually off road. But keep this in mind, because if you are taking a tax credit on all of your fuel, you can get in big trouble from the irs. And trust me. Are audits rare? Yes. But when they happen, you better make sure you've done things right. There is absolutely a penalty for taking tax credits on Form 4136 for vehicles that are on the road and that they use the road. And there is a federal tax of 18.4 cents currently. If you're watching this in the future, that might change. 18.4 cents is a federal tax that for every gallon of fuel, there's 18.4 cents of tax to maintain the roads, keep the highways maintained, all the rest of it. By filling out a Form 4136 and keeping track of the amount of fuel that you use off road, you're able to get this 18.4 cents deducted. And as a tax credit, I should say you're gonna get a tax credit for that money back. Now, again, that means that I need to spend 1000 gallons. I need to use 1000 gallons of fuel. I'm gonna save $184 and I'm gonna spend $3000 to get it. So $3 per gallon I'm using here, $3 per gallon, I'm gonna spend $3000. I'm gonna save $184. So I'm saving like maybe 6%. So literally I'm going to save 6% on my fuel. Okay, 6% off of my fuel for literally probably 10 to 20% of my fuel. So we're literally talking about a 2 to 3% tax credit on your total fuel bill. So let's just be clear, this is not free. Alright? So for everyone that was responding back to me saying that I shouldn't have added in the fuel cost to the hourly rate or hourly cost that it was for a mower is incorrect. Having the Form 4136 does not make your fuel free. It gives you maybe a few percent discount, maybe it's a little bit higher. Maybe you're gonna say 4 or 5%. 6% if you are. You know, have big mowers, you know, big zero turns and you're mowing back and forth all day long. But for the majority of most of our fuel is used in trucks that actually run on the road and we are supposed to pay for taxes on that stuff for weed eaters, blowers and, you know, chainsaws. 1,000 gallons, my goodness, it's gonna be a lot. Now, am I against you saving $184? No. That's fantastic. Would I spend two or three hours of my time and bringing my accountant in to save $184. No. So make sure it's very simple. A lot of people are using tax cred. But keep in mind, if I have to pay $100, if I have to pay $100 for a service like tax credit or my accountant to take the form 414136 and create it themselves, you gotta keep in mind that I've literally got to get like 600 gallons of gas for off road vehicles, off road equipment before I even break even. Okay? So you gotta take into account the time it takes you to save this $184, alright? Next thing is, this is a big, big thing I gotta make clear. And I think most people understand this. But again, I'm not talking to those of you who have a lot of experience. I'm talking to the person that I was when I was 14, 15, 16, trying to learn business, trying to learn landscaping on the Internet. Okay? A write off is not equal to free, okay? And a deduction on your taxes is not equal to a tax credit. So when people say, oh, well, I'm gonna get this a write off. So like that disqualifies the fact that I have to pay for something that is so ludicrous it gets me very, very unhappy and angry because people make poor buying decisions in the name of a wr. Because they're like, oh, it's a write off, so I can just buy it. It's as if it's like, oh, it's free, just write it off. It's free. It's not free, okay? A write off means that you're able to take that money as a deduction off of your income. So let's say I make $50,000 on my business and I'm going to take a write off of $10,000. It does not mean I get that $10,000 piece of equipment for free. What it means is I get from $50,000, my adjusted income is going to go to 40,000. So instead of paying a percentage on 50%, let's say I'm at 10% taxes or let's say 20% taxes on $50,000 in my net income. That means that I'm going to have to pay $10,000 in taxes. Now if I go get a $10,000 piece of equipment, I do not get $10,000. My tax bill does not go from 20,000 to 10,000. That does not happen. What's going to happen is I'm going to have my adjusted gross income going from 50,000 to 40,000. Now I'm going to pay 20%. I'm going to pay $8,000 in taxes if I'm paying 20%. So what that means is I saved $2,000 in taxes. I did not save 10,000. Okay? You've got to keep that in mind when you talk about write offs. You're only saving your tax bracket number. So If I'm paying 22% taxes, which is the average amount that most of us are probably paying, because that's how much you pay. If you're making between 40 and $80,000 on the bottom line of your tax return, like the net adjusted gross adjusted income that you have on your tax return, probably between, if you're between like 40 and 80%, your federal tax bracket's gonna be at 22%. If you're making like 10,000 or $15,000 on the bottom, bottom line of your business, do not kid yourself that a write off is going to help you. You literally are making no money to have a deduction against. So if you're not profitable, if you're not making profit, write offs don't help you at all. Okay, yes, you can carry them forward, you can carry forward losses, all the rest of it, but in that year, it does not help you. A write off is only effective if you're making net profit at the end of the day. And if you're trying to keep this number down, like, oh, I don't want to be in a higher tax bracket, keep in mind, your write offs now become less and less effective. Because if I'm only making 15 or $20,000 in net profit and that's being adjusted, taking my personal income, I literally might be getting a 10%.

In a 10% tax bracket. Therefore, when I take a write off, I'm literally only saving 10%. So write off does not equal free. And when someone says that you get a deduction, that's a write off. When someone says credit, that means I'm actually going to get money from the government. That's what the Form 4136 is, a credit, they give you money back. So keep this in mind. It's very important. When people say, oh, it's a write off, just buy it. No, if you're not making money in your long term business and you're doing things in the name of write offs, you are absolutely doing it incorrectly. Okay? Do not think that if you can write something off as a business expense, it is free. It's crazy, it's ludicrous, especially if you're in a lower tax bracket where your write off percentage is actually less, okay, the more money you make, the more profits you make. If you start getting 30, 40, 50% that your tax bracket is in, then yeah, write offs become more and more important. But guess what? You have the profit. You can do these things. Okay, Last thing, I got so many people emailing me about this. They're like, hey, people are not sponsored. They get free equipment for their videos. Okay, let me be very clear. You might not get money for a video, but if you get free equipment to make a video about a certain brand and their mower, you're sponsored. That is the definition of a sponsorship is if you get something in return for the work that you do. So the reason I talked about this in my last video is cause very important to keep this in mind. And I really feel it's important. I hope this kind of prods our industry to disclose whether they're getting paid, whether they're getting free equipment, or what their relationship with the manufacturer is. Because it's very important. If I'm a young person and I'm watching these videos on YouTube and they're going on and on about how much this money, how much these features are gonna save them and how great this is gonna be for their business because it has a light bar and they can work at night or whatever it might be features, right? And I think, oh, that's great, that means I'm gonna run a successful business. They don't get the context that that person's probably getting paid or getting free equipment from the manufacturer. Even if that free equipment is going to the audience of the person that is making the video, there's a certain amount of brand equity that that person's getting for creating the video, for creating the content, and I'm fine with that. I love the fact that people get paid. I love the fact that our manufacturer and this industry are giving back to our customers, creators. I am like so 110% about that. But please, I want this to be very clear so that when people are making business decisions and spending 10,000, $15,000, $40,000 on a truck, that they're actually getting what is true and real. And they can get a unbiased opinion or if it's biased, they know it's biased. It's okay to have biased opinions. It's okay to have sponsored posts. I'm not against that. I want these people to make money. If someone came to me today and offered me, you know, $20,000 to review a mower. I would do that. Now you have to ask yourself, would I be completely objective in saying that mower? Probably not, but I wouldn't like, you can't be. Now if I was and I was like actually honest, I need to give you the feedback. I need to give you the information that, hey, I'm getting paid $20,000 to make the review of this mower. Am I insinuating or saying that other YouTubers make $20,000 for review? No, I'm just making a point. And that is I am going to have a tarnished opinion of a product if I've been paid for it. I'm not going to say anything negative about it. Traditionally, most people are just not. Just keep these things in mind when it comes to buying mowers. When it comes to. I'm just kind of responding back to a lot of your feedback. I might just take this YouTube link, send it back to everyone that's asked me questions about this. But again, off road, The Force Form 4136 is less than you think. It is not free. It does not disqualify, it does not take away the cost of fuel. On your calculation of what equipment costs per hour, that's false. Write offs do not equal free. Okay? If you're going to get a write off for your piece of equipment, you better make sure you're actually profitable. And that way you are actually saving some money. Because if you're not profitable and you're going after write offs, you're not saving anything on taxes. And keep in mind, when it comes to YouTube and videos like this, I want manufacturers to give our YouTube creators money. But I also want our YouTubers and people in this community to be very transparent about if they're getting money or if they're getting free equipment. Because if someone's giving me free equipment, I am not going to say anything bad about it. Because guess what? I want the free equipment. I want that gravy train to keep going on and I want these people to get free equipment and their businesses do better and then make more money on YouTube and with these sponsorships. It's very, very healthy for the community for these people to get money. But we've got to disclose this for the person that's just getting started that is making business decisions and businesses decisions that could potentially lead to their failure if they're not looking at the numbers. I'm Mike Andes, landscapebusinesscourse.com I hope no one was offended. This is not the reason of this video. I hope you made that very clear up front. But please comment below. Subscribe to Spencer's Lawn Care. They are amazing. Channel tq. They're awesome. Definitely great for watching them every single day. They make content. I don't know how they do it. They grind, they hustle. If you actually try to make a video a day, vlog style, after a whole day's worth of work doing all the editing, they deserve a lot of love. So there's nothing in my heart against Spencer's Lawncare. There's nothing against any of these other YouTubers. I'm just trying to create the numbers and the business side that I fell into the trap of when I first got started buying the equipment, buying the trucks, doing all these things because it was so popular on YouTube. But I never got the numbers behind it. And it's only been, you have to go get. I don't want you to go get an mba. Go have to go talk to a bunch of people, learn a bunch of mistakes, go into a bunch of debt, have a bunch of loans on equipment and all the rest of it and then have to figure this stuff out. So please, I just hope it comes from. You understand, it comes from a good place. I'm just trying to help the person who's just getting started. I have nothing in my heart that's negative against Spencer's Lawn Care or anyone else. Thanks so much, everyone. We'll see you next video.