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AD1985
06-11-2007, 03:22 AM
Hey guys,

I'm thinking of starting up a lawncare business. In the beginning it will probably be strict gardening but I want to evolve it to landscaping. When I have enough accounts I want to eventually stop working it myself and hire "cheap labor" to do the jobs. I would then stick to a marketing and managerial role unless an emergency comes up.

Has anyone been successful running a similar type of business? I imagine in working this model the quality of service would go down, so my business would change so that I compete mainly on price and volume. If anyone runs a business like this I'd appreciate some estimates for costs (equipment, labor, and anything else) as well an idea of the time commitment and stress level involved in managing a business like this.

Thanks!

Midwest Lawn Services
06-11-2007, 03:52 AM
So whats your level of experience?

AD1985
06-11-2007, 03:56 AM
No experience at all. I will be starting with a friend who has worked in this business though.

Midwest Lawn Services
06-11-2007, 04:06 AM
So how many years is your business plan projecting you to become the "office rat?" What kind of capital will you be using? How will you advertise and how much will it cost you? Will you be doing renovation landscaping or striclty new? The landscapers I network with are small and large, but all have offices where clients meet, plan, and can advise. What kind of an office or retail business will you have and what is the cost? These are just a few basic questions. My suggestion to you would be start by getting some experience under your belt. NOBODY in these businesses started out without experience. You have to be able to make mistakes and learn from them. Thats how you grow. I would make the mistakes working for someone else.

AD1985
06-11-2007, 04:22 AM
So how many years is your business plan projecting you to become the "office rat?" What kind of capital will you be using? How will you advertise and how much will it cost you? Will you be doing renovation landscaping or striclty new? The landscapers I network with are small and large, but all have offices where clients meet, plan, and can advise. What kind of an office or retail business will you have and what is the cost? These are just a few basic questions. My suggestion to you would be start by getting some experience under your belt. NOBODY in these businesses started out without experience. You have to be able to make mistakes and learn from them. Thats how you grow. I would make the mistakes working for someone else.

To answer your questions:
It's hard to write any projections because my breakaway from the labor duties would depend on how fast the business can get new accounts. If I had to estimate I'd say 1-3 years.

I have enough startup capital to buy all the equipment necessary for 2 people. Further growth funds will come from capital reinvested into the business.

I'll do new and renovation landscaping if I feel up to it. I get the impression from reading around here that this stuff is not rocket science and can be learned from experience.

As far as the whole office thing I'm trying to avoid that. I want to do all my business negotiations at the customer's property and run the business from my home. If this means sticking to residential accounts that's fine.

Also you say no one started this business without experience. Do you mean everyone started working for another landscape company and then broke away because I find that to be very suspect. Again we are just managing people's yard's here, this business can't be THAT complicated.

bohiaa
06-11-2007, 07:40 AM
my accountant told me that he had a guy wanting to do this,,,

he was only interested in the managment part of the business, after considering the price os everything the guy backed out,,,

this may be a good way for you to attack it,,,go talk to an accountant,
explorer all your expences, and go from there

Fairway Land & Lawn
06-11-2007, 08:23 AM
There is much more to this business than just cutting someones grass..Make sure that when you are talking to people face to face that your arrogance doesn't show. That said, there are extremely well educated people in this industry that have worked very hard to gain the knowledge that they retain. That is why customers pay us, not just for service but also for our knowledge and expertise. Will you be maintaining just residential, or will you branch out to commercial? This makes a big difference when purchasing equipment. As your company grows minimally, your equipment costs and operating exspense grows exponetially. The best advice I can give is to not grow too fast. Take your time, cross all the Ts and dot all the Is. Maybe take the 1-3 years, and extend it 3-6 maybe even 5-8. Like said before, there are many mistakes to make in the green industry. If possible, make them early before it costs too much.....Good luck!!!!!!

Your Lawn First
06-11-2007, 10:42 AM
I agree with MIdwest you do need to have some expreince but not working wiht someone else F*** that. IF that was the case then just go be another mans rat. This is what I would do, Go to your library and get as many books as you can about this business read them all. if you are doing only landscaping oh my god there is tons of books you can read and try to find a book that tells you what grows good in Cali, because not all plants and bushes/ trees can all grow everywhere. And don't go work for someone else just go out and do it. Start in your lawn

PaperCutter
06-11-2007, 12:34 PM
Why will your quality necessarily go down as you grow? More to the point, why are you okay with that?

Dave

Charles
06-11-2007, 01:09 PM
I have seen a few of these type operations in action. Employees without supervision. From what I have seen, the quality has been terrible. You would need to hire a experienced field superviser to oversee the day to day operation ie keeping employees up to speed, checking quality, collections, maintainence of equipment, dealing with customers wants and needs etc. Keep in mind that many employees do not take care of equipment like its their own. So plan on lots of repairs and downtime. You would need to get the proper insurance and get workmans comp etc The list goes on.
Now after all this you will need to find a way to pay yourself. So a average volume won't cut it.

AD1985
06-11-2007, 08:06 PM
I have seen a few of these type operations in action. Employees without supervision. From what I have seen, the quality has been terrible. You would need to hire a experienced field superviser to oversee the day to day operation ie keeping employees up to speed, checking quality, collections, maintainence of equipment, dealing with customers wants and needs etc. Keep in mind that many employees do not take care of equipment like its their own. So plan on lots of repairs and downtime. You would need to get the proper insurance and get workmans comp etc The list goes on.
Now after all this you will need to find a way to pay yourself. So a average volume won't cut it.

Those are the type of problems I was worrying about. When I was thinking of how to run this business two models emerged.

The minimalist model: I buy the cheapest equipment (eg the best value when considering price/efficiency/maintenance costs) hire the cheapest labor, and strip out any other expenses that I can get away with. Maybe I'll have the guys drive their own truck and not provide worker's comp ( I believe I have this option if my company doesn't exceed a certain amount of employees) The drawbacks of going this route are obvious. I'll have quality issues. I may lose some accounts. I may have high turnover and have to fight legal battles with former employees over worker's comp. Still, I think this business will generate income since costs are minimal.

The solid model: Basically nice everything - tools, workers, supervisor, maybe an office, insurance, the whole 9 yards. The problem is I don't think I can generate any income this way with so many higher expenses. Someone else said it too, there is just no money this way.

So I'm not proud of it but the cheap way seems like the only way to go if we don't want to do the labor ourselves.

M&SLawnCare
06-11-2007, 09:29 PM
So you want to hire a bunch of illegals for 5 an hour, give them cheapo equipment, undercut all of the other LCO's in your area, and try to get enough accounts to turn a profit? Sounds like the jist of your plan from what i can see. If so i think you came to the wrong place. I wont start it, but I'm suprised nobody tried to massacre this post yet lol.

Now as for your plan I'll give you my opinion. Ethical reasons aside, i don't believe it will quite work out the way you plan. First off your making price your selling point. Taking that approach your going to constantly be replacing clients. No matter how low you go, someone, somewhere, will go lower. You not only have to compete against other lowballer LCO's, but the large amounts of new startups, and younger kids pushing their dads mower around each year. (not that i have anything against those kids, i was one myself. But the prices they will work for is not matchable by a full scale legit lco that has bills and taxes to pay). Because your going to constantly be changing clients, you need a lot more money for advertising to keep up with it. Not to mention the mere fact your going for mass quantity to make a profit demands mass advertising. Advertising isn't cheap.

Next is equipment. Generally speaking, I'm a firm believer in you get what you pay for. If you go with cheaper equipment, you have to expect their to be more down time, and many more expensive repairs. Downtime can kill a LCO, *especially* a new lco. Clients aren't going to stick around when their grass is a foot tall, because your mower is down again, when they can just open the phone book and choose one of the other 234972323243 lawn care companies in there.

Last is labor. Once again you generally get what you pay for. If you pay McDonald's wages, expect to get similar type employees. Theirs little to no incentive for employees to be on time, work hard, have a good work ethic, take care of the equipment, and for that matter even show up when they aren't getting paid. Good employees like that will be working somewhere where they can earn a decent wage. I work part time as a domino's delivery driver for extra cash so i know this first hand. I wouldn't be able to stand having 99%of those people working for me, much less even consider letting them touch my equipment. Besides the added cost factors associated with those people, i can't imagine the headaches that comes with managing that mess.

Regardless of which route you take, expect to work long and hard for the first few years to make it happen. As others said see an accountant to get exact startup costs figured out, and do a TON of research on your target area. No matter how good you plan, how well the numbers fit, or how much equipment or workers you have, you wont succeed if the neighborhood your targeting can't support you.

Just my 2 cents worth.

Scagguy
06-11-2007, 10:41 PM
Hey guys,

I'm thinking of starting up a lawncare business. In the beginning it will probably be strict gardening but I want to evolve it to landscaping. When I have enough accounts I want to eventually stop working it myself and hire "cheap labor" to do the jobs. I would then stick to a marketing and managerial role unless an emergency comes up.

Has anyone been successful running a similar type of business? I imagine in working this model the quality of service would go down, so my business would change so that I compete mainly on price and volume. If anyone runs a business like this I'd appreciate some estimates for costs (equipment, labor, and anything else) as well an idea of the time commitment and stress level involved in managing a business like this.

Thanks!

I believe if you want to run a cheap business, with your quality of work going down over time, you go right ahead. Talk about stress levels.....you'll have find a whole new level because your customers will be leaving you as fast as you can sign them up with crummy work. Those of us who care about service commitment, quality, and ethics will put you out of business and smile about it on the way to the bank. Just my .02

fiveoboy01
06-12-2007, 02:04 AM
To put it nicely, your "business model" is a train wreck waiting to happen.

And since it's not "rocket science" as you so plainly state, that's the only advice I have for you.

irocz106
06-12-2007, 06:46 AM
I just started at this a month or two ago. I have a full time job. I don't lowball. I don't need the accounts. People will respect you if you can tell them what you feel your time is worth. I made a lowball estimate on my first property, now im stuck on my wb for an hour for $37 plus the 15-20 min each way it takes to drive. Luckily i got 2 more accounts in the area that i do the same morning, but i have had the last 2 not call me back. I just gave them my cost and if they don't like it, too fu*kin bad. Don't lowball, or sacrifice quality. Like everyone else said, your idea won't work. Just buy a McDonalds and hire 20 pedro's, and you'll make more profit, and have free food for life. I take my time cutting and edging, and it sure shows. I sat and had a beer on my buddies porch watching another LCO do a job, and it was weak, there were missed spots, and no edging. I dropped off an estimate in the box after. (We'll see if they need it done properly or not)
My 2 cents.

PaperCutter
06-12-2007, 08:17 AM
Your ideal business model, centered on keeping you hands-off, seems better suited to the janitorial business than landscaping. In my mind what you propose is asinine- the equipment you've purchased will be towed behind the vehicle of your bottom dollar employee? The vehicle that may or may not be insured, may or may not start after each stop, that you have no control over maintenance/ cleanliness/ obscene bumper stickers on? Plus, if you're paying someone so little and sending them out with a truck full of tools and no supervision, how long do you think it'll take before they're using your stuff to do jobs on the side without telling you?

I'm not even going to comment on the no workers' comp issue, except to say that your attitude there completely disgusts me. Accidents can and will happen, especially if you're using unskilled, untrained, unsupervised laborers on the cheapest equipment you could buy. If they get hurt, is your plan to pay their bills out of pocket, or to say "sorry, never seen you before in my life- get off my property"?

Dave

wbw
06-12-2007, 12:23 PM
It is absolutely possible. It will require very good management skills and a lot of short term sacrifice. Search for the threads "Is it lowballing or is it smart?" by DFW Area Landscaper, and "I did it." by PTP. Good luck and keep us informed of your progress.

fiveoboy01
06-12-2007, 01:11 PM
Just because it's possible does not make it ethical, respectable, or even smart...

Then again, there's one in every thread who always stands up for stuff like this...

wbw
06-12-2007, 02:30 PM
Just because it's possible does not make it ethical, respectable, or even smart...

Then again, there's one in every thread who always stands up for stuff like this...

Please explain what could possibly be unethical abput this

PaperCutter
06-12-2007, 02:35 PM
Sounds like the OP is looking to send his employees out without workers' comp or any way of paying for medical care in the event of an injury. I mean, he flat out said he expects legal battles with former employees to be a part of his business. Sound ethical to you, wbw?

Look, business is business, but if he goes the cheap route I feel sorry for his future employees and customers.

Dave

fiveoboy01
06-12-2007, 03:24 PM
Please explain what could possibly be unethical abput this

:laugh: :laugh:

AD1985
06-12-2007, 05:46 PM
It is absolutely possible. It will require very good management skills and a lot of short term sacrifice. Search for the threads "Is it lowballing or is it smart?" by DFW Area Landscaper, and "I did it." by PTP. Good luck and keep us informed of your progress.

Thanks. I'll provide updates in the future as to how my business goes.

I see that a lot of you guys don't like going the cost cutting/volume route for ethical reasons. My belief is that ethics should not clash with the purpose of business - to make profits. This is within reason of course, as I don't want to do anything underhanded or deceitful. However, it is unfair to slander an idea because it doesn't fit with how you would like to see a business run. I'd like to run a lawncare company just like many of you do but it just doesn't fit with my goals. Therefore, much like other companies like Walmart, I'll make my profits through high volume/low price with some inevitable sacrifice to quality than low volume/high price and high quality.

I prefer to go this way for several reasons. First I personally don't believe that with this type of business there is much difference between average quality jobs and high quality jobs. Sorry that I keep saying it, but we are just dealing with lawns. So long as the job is not a disaster, medium or high quality will likely make little difference.

I'll tell you my experience for why I believe this: Whenever my parents hire someone for the job, the low quote always gets the job. They have not been disappointed either. We got quotes from $2400 to $8000 to tile the roof ($8000! ya right) We paid $2400 and the roof was done well. We paid $12,000 to have hardwood floors installed when other companies were asking around 50% more. The company we hired sent a bunch of mexican guys who worked quickly but knew what they were doing. Then the owner of the company (a chinese guy) came by, gave the house a quick inspection and asked us how it was. We gave a positive review. Just last week my mom had a little part of the garden redesigned and the bill went to the cheapest guy. Now there is a little wall thing that looks very well done in the back yard.

Needless to say I have a hard time believing that competing on price is not a viable way to profit in this business. If I had to quantify my business on a 10 scale with 10 being top quality, well paid workers and 1 being clueless illegals, I'm put my target at 3 or 4. This is labor on the cheaper side, not the best work, but still pretty good.

Scagguy
06-12-2007, 10:30 PM
If you think putting a crew together that rate 3 or 4 on a scale of 1-10 will keep you in business, then good luck to you. Around this neck of the woods, with my clients, that will get your ass fired fast.

MOWEMJEFF
06-12-2007, 10:46 PM
Respect the industry and either hire people who know what their doing or start from the bottom. A higher paid employee is going to do a higher quality job and you can charge a higher price. Given your location I can see why you say cheap labor, but hire 1-2 "Rocket Scientist" to oversee the actual work.

txgrassguy
06-13-2007, 12:38 AM
AD, my business model is predicated upon volume - meaning economy of scale - work and it has proven to be highly successful.
You can definitely build a repeating business based upon the tenants you are proposing yet you do run the risk of limiting exposure to high dollar, high profit margin jobs.
right now, counting myself, I have nine full time employees + 2 part timers and I am hovering around $700K gross and am booked for at least two months out on installs and renovations.

PaperCutter
06-13-2007, 08:54 AM
What do you mean, "ethics shouldn't clash with profits"- are you saying that one should not let ethics stand in the way of profits? You have yet to answer my questions regarding your workers' comp "policy". I've been guilty of "bendable ethics" when it comes to competing with other businesses in the past (distant past), but I have always held firm on two points: treat my customers fairly, and treat my workers fairly.

Is there money to be made outside the high-end niche? Absolutely. One thing I've learned is that all but the best customers view landscaping as a commodity, of equal importance with an area rug, toilet paper, what have you. You're right about the work of low bidders- most people can't spot the flaws. However, you know who will, and who will expose them to your clients? Your competitors. I worked in the uniform rental industry for several years, a bottom-feeder industry if ever there was one. All the companies are in a race to do it cheaper, to the point where I was getting 20% less per change four years after I started! When I'd cold call an account, I never started by promoting our service. I started by pointing out the empty soap dispensers, dirty mats and tattered garments. The selling point was never "we're the best," just "we can do better than that." Which was BS, but hey- bendable ethics.

In the race to the bottom, everyone's pay was constantly getting screwed with. They tried to fire me when I broke my foot; they succeeded with several other employees stupid enough to get hurt in the unsafe conditions.

My point? First off, there was a LOT of employee sabotage happening. Your employees will figure out that a) you don't really see them as human beings, b) they'll never advance to anything worthwhile with you, and c) loyalty is pointless. You'll be constantly training, because they will leave you for another $0.10/ hour.

Second, if you're throwing quality and customer service out the window then price is ALL that separates you from the competition.

You want to impress me? Develop a business model that allows you to win on price because you have the most efficient operational systems in the industry. Create a workflow that allows you to service the customer (emphasis on the word SERVICE) faster and more efficiently than anyone else. Now, I'm sorry- to accomplish this you may have to leave the office and break a sweat while you figure this all out, but if you can do that- wow, you'll be the green industry stud.

I have to ask- do you have any experience managing employees or customers? Because I kind of worry for you based on your unrealistic ideas of how people will behave.

Dave

Scagguy
06-13-2007, 08:24 PM
What do you mean, "ethics shouldn't clash with profits"- are you saying that one should not let ethics stand in the way of profits? You have yet to answer my questions regarding your workers' comp "policy". I've been guilty of "bendable ethics" when it comes to competing with other businesses in the past (distant past), but I have always held firm on two points: treat my customers fairly, and treat my workers fairly.

Is there money to be made outside the high-end niche? Absolutely. One thing I've learned is that all but the best customers view landscaping as a commodity, of equal importance with an area rug, toilet paper, what have you. You're right about the work of low bidders- most people can't spot the flaws. However, you know who will, and who will expose them to your clients? Your competitors. I worked in the uniform rental industry for several years, a bottom-feeder industry if ever there was one. All the companies are in a race to do it cheaper, to the point where I was getting 20% less per change four years after I started! When I'd cold call an account, I never started by promoting our service. I started by pointing out the empty soap dispensers, dirty mats and tattered garments. The selling point was never "we're the best," just "we can do better than that." Which was BS, but hey- bendable ethics.

In the race to the bottom, everyone's pay was constantly getting screwed with. They tried to fire me when I broke my foot; they succeeded with several other employees stupid enough to get hurt in the unsafe conditions.

My point? First off, there was a LOT of employee sabotage happening. Your employees will figure out that a) you don't really see them as human beings, b) they'll never advance to anything worthwhile with you, and c) loyalty is pointless. You'll be constantly training, because they will leave you for another $0.10/ hour.

Second, if you're throwing quality and customer service out the window then price is ALL that separates you from the competition.

You want to impress me? Develop a business model that allows you to win on price because you have the most efficient operational systems in the industry. Create a workflow that allows you to service the customer (emphasis on the word SERVICE) faster and more efficiently than anyone else. Now, I'm sorry- to accomplish this you may have to leave the office and break a sweat while you figure this all out, but if you can do that- wow, you'll be the green industry stud.

I have to ask- do you have any experience managing employees or customers? Because I kind of worry for you based on your unrealistic ideas of how people will behave.

Dave

Great post Dave!! I couldn't agree more.

Darrin A.
06-13-2007, 09:15 PM
The idea of running a LCO business based on quantity is absolutely possible and has been done by some people without cutting quality at all. The problem is, it usually takes 10 - 20 years to become this efficient and have accounts that are so close together that the truck stops once and you do 3 or more jobs without moving again. IMO, you can't do that without quality.
Your reference to Wal-Mart doesn't really fit here. They are RESELLING goods made by others. They are not selling themselves. They are also buying in mass quantities. Example: Ames buys a truck load of shirts at $5/shirt, sells at $10/shirt, profit might be $1/shirt (lots of shirts in a truck load). Wal-Mart buys the same shirts but, buys 50 truck loads at $4/shirt, sells them for $9.50/shirt, profit might only be $0.50/shirt. Who made more money? Wal-Mart, and alot more.
If you have your employees using their trucks, what happens when they get in an accident and your equipment, as cheap as it may be, gets destroyed? You buy more, out of YOUR pocket. If it was your truck with proper insurance, your COMMERCIAL auto policy can cover some of it, your business insurance can cover up to all of it. By the way, who's going to pay for the employees truck? If it wasn't insured for business use while being used for business (not too easy to get around them noticing that there was a trailer on it) it's not covered to even be on the road.
Don't get me wrong, I would love to see you succeed in your business, I just don't think you will.

I also agree highly with Dave

Tim Wright
06-13-2007, 10:08 PM
I am sure that you can do what you are proposing, however with some adjusting to your thinking.

1st - Your lower end customer IS going to care about the quality of cut for their lawn, and perhaps even more than some commercial clients.

2cd - standardize everything, cookie cutter everything. Write SOP's handbooks, safety, training, etc., so that everyone (employees) knows exactly what to do and expect and can teach the next guy in short order.

3rd - Get software to track everything, such as time, schedule job costing, employee's strenths and weaknesses in the jobs they do. Clip and qexpress come to mind. I use CLIP.

4th - I would not look for the cheapest hireable guys to work for me. I would look for character first. I personally would be more interested in older people that need income but cannot go over a certain amount without loosing benefits from other sources. Older people that know how to and want to work but cannot get hired at corporate status. Most kids and younger adults simpy want to fool around for a pay check.

5th - Get equipment that will last. Get what you can afford and build on that. Perhaps if you can get a lot of accounts fast, you can talk someone like Huskavarna into quantity discounts or something. I am not a Huska fan, but other companies do not have fleet programs. Huska does, and maybe John Deere. Even your trimmers etc should be commercial grade and they will out last the consumer grade. The only mowers that I would invest in for cheap would be standard Wal Mart special push mowers. But the more you use the good stuff, the less need you will have for a Wally push mower.

6th - Plan on being way more involved in the company than you are planning now. You need to be there. You need to show that you have a personal handle on what is going on, or your employees will attain apathy rather quickly.

7th - For volume, targeting will be key, and ratching down windshield time will be of utmost importance.

Just some thoughts.

Tim

cpel2004
06-13-2007, 10:22 PM
Darrin you can absolutely do it. Although I cant run that type of business as of yet cuz it does take time for some of us, depending on your background and the other services you offer. Due to the ease of entry and that lack of knowledge of customers and operators, a Volume business can be done. I'll go a little bit further its the tightness of your route that counts. Thats the significant factor. Most of us with myself included pay alot of money for just windshield time not actually working time. If I could eliminate the windshield time we would be averaging anywhere from 100 to 150 per hr with reasonable rates for one crew,boy I wish I was there So it can be done, but I havent seen it that often. I would like to hear more from the guy who's making 700k in five years and how he manages his operation.

cpel2004
06-13-2007, 10:26 PM
Tim Wright I like your point five, I have seen guys who sell their equipment right before or after the warranty runs out. I guess I need to have an accountant look at that for me. So all repairs are under warranty, that a huge savings, but is it really cost effective for my business. I currently use the principal run it to the wheels fall off.

BBL
06-13-2007, 10:34 PM
A company I worked for in the past paid $10.50 minimum to his employees and payed very nice to guys who stuck with him and did a good job. Years in business 27 yrs, has many accounts that have stuck with him 17+ yrs and never has any problems with customers and the employees are always ready to bust ass for him.

Another company I worked for was bigger, paid $10 MAX to his employees and would always try to short hand his employees to increase his profit. years in business 4 yrs, than folded shortly after me and another guy quit(after he refused to give us a raise) because once we left he just hired cheap labor and the lawns looked like garbage and he lost most of his accounts and closed shop.

just some food for thought.

Tim Wright
06-14-2007, 07:45 AM
Tim Wright I like your point five, I have seen guys who sell their equipment right before or after the warranty runs out. I guess I need to have an accountant look at that for me. So all repairs are under warranty, that a huge savings, but is it really cost effective for my business. I currently use the principal run it to the wheels fall off.

I use the same principal. I really have no clue as to which is better, and the only way I can see doing it that way is to actually pay cash or have the machine paid for before the warranty runs out.

The way I am working it, with struggles, is to add enough work for 1 new crew a year. This gives me a fresh machine or two each year and warm up time for new challanges.

I am not too far down the road, so my opinions should be deferred to someone such as rodfather or others who are already where I am going.

Having said that, we are not doing to bad this year as far as growth is concerned.



Tim