View Full Version : making it
12-08-2001, 12:40 AM
I trying to see the benefits of hiring a helper. I want to expand my business but I can't see where the big money starts. I make 5 to 6 hundred a week by myself. What is my potential with a helper. One more thing and that is if you start a second truck how do you make descent money. Say labor is $600 a week and fuel cost $40. Tahts alot of grass. Just looking for some advice in expanding.
12-08-2001, 04:47 AM
I maintained about 35-40 lawns a week this year by myself making between $3500 to $4000 a month I also want to expand my buisness by hiring a guy i figure if i can mow about 8 lawns a day me and another guy can mow 15 a day do the math with me 15 lawns a day x 5 days a week = 75 then i average $30 a lawn so then multiply 75 x 30 = $2250 times that by 4 weeks = $9000 then Ill say we work 8 hrs a day paying that one employee $10 an hr so 40 hrs a week = 160hrs a month x's that by $10 hes makin $1600 a month cutting $9000 down to $7400 take that $400 for fuel and misc your makin $7000. I would want to do this for a summer making him my right hand man then when the right time comes you make a second crew you put him as a the boss hire another guy and off they go as for me a hire a guy for my crew and start all over and so on and so on i plan to have about 10 maintenance crews
12-08-2001, 06:42 AM
One factor to consider is that NO one is as interested in your business as you. The concept of adding employees is fine but the application is another. With more than one crew your own production will drop becasure you will for sure spend time "managing" the new crew. Some thing to consider.
First of all, you should be able to double your revenue without a helper. One man can cut a grand to $1,200 in grass, in a week by himself. I would look at the type of accounts you have and the type of equipment you use. Start there first to see if you can speed up and add more business. If that number is where you want to be, then maybe you can hire a part-timer for heavy days.
I would rather buy a faster machine than hire a person. That will work to a point but it sounds like you can grow some more before you add laborers.
NO one is as interested in your business as you.
Equipguy has hit the nail on the head. Millions of dollars have been made in theory but in practise chapter 11 is the case. Business any business there is two ways to make it. Small one man with helper and big with many employees. Any thing in between is struggle. The key to many employee is management. Management is a profession all to its self. To manage any business is a full time job. As a one man operation you are a full time manager, you are managing your self full time.
Employees can make or break you. Every business is crying for good help. If you make the jump to a larger operation make sure you have a reserve in the bank because cash flow can kill you. It takes money to make money. Growth is expensive. My .02
12-08-2001, 10:57 AM
Ditto to what has been said above. Be careful figuring the numbers. An extra set of hands will not increase your numbers by 100%.
My experience has shown that if you can do say 10 lawns by yourself you will be able to do 15-17 with one helper. Add a third and you can do only 24-26. Think of the wasted time when one guy is done and the other is still trimming, blower, etc. The other guy will lean $$. Three guys on a residential route is a waste. Commercial is a different story.
There are lots of guys here that do $400-$700 per day alone. Work on that first.
12-08-2001, 11:21 AM
Me and a good friend of mine were talking numbers and profits. We both were at 50-65% profit as solo operations. I stayed solo while he added 1 guy, then 2 then bought a truck,ect. He got up to 300 mowing accounts. His profits were down to 25-30% at the end. Overtime was the big killer. When it rained, they were shut down. Then he had to have them put in 12 hr. days. Then the workers comp. was becoming an issue. Then the guys were misusing the equipment and causing repair bills. Then taxes and legal issues started to come up resulting in more expenses and time spent. He was getting really frazzled out. While I was in a routine with relatively few surprises. He made more, sure, but it wasn't THAT much more. And for me, the extra 15,000 per year is not worth all of those headaches. ;)
12-08-2001, 12:09 PM
I agree with what everyone has said.
The person who works for you will expect the same benifits of the job as you have. This means wages, benifits, Workmans comp insurance. What would happen if he stepped in a hole and broke his ankle? Do you think that HE would be glad to pay all expenses plus his lost time from the job?
I also agree with what numbers Mathew has given you. You may be running a 50 to 60% profit now, but with just one helper that wil decrease dramaticaly. Most large profitable orginazations operate at a .90. Thier labor to revenue ratio is about a 45%. This means for every dollar they make, $.90 cents goes back in the company an $.10 cents is profit. And of that $.90 cents, $.45 cents is labor only! This equates to more employees- more money.
Yes your bottom line will be larger, but your expenditures will increase also
12-08-2001, 03:23 PM
A good friend of mine, is ready to lean down at this time, too. At the current time, he runs seven Lazers, and numbers of various wb's and such. They cut approx. 350 accounts a week. In total, he did about 3/4 of a million last year, and only did just over 1/2 mill this year. (This includes the irrigation, landscaping, fertiliziation, and snowplowing.) He is wanting pretty badly to cut right down on his mowing, because of the headaches and maintenance involved. I told him to always keep some, just for the access to other work. HIS dilemna is, that he is really unsure on just how much to cut his cutting force by. Like he said, this wouldn't involve downsizing, necessarily, it would be more of a redesignation of labor force.
12-08-2001, 04:46 PM
But that IS the problem at hand in this discussion. In order to keep up the maintenance dept, you need manhours. I suppose you could make 6 guys do the work of 10, but the service will suffer. After 10 hours of mowing, most guys are toast. I would not expect a great response from the help when they find out they need to do 5 to 10 more everyday. And if they do, the overtime pay will exceed base pay of the guys you just let go. Overtime was the number ONE reason this guy's profits went down the drain. Bigger, faster equipment may be the only answer.
12-08-2001, 05:20 PM
I don't know this answer. Single gys can and do make great money. Why? It's their business, they have learned time management, they know what task to do first to last to be most productive, they work and don't come up for excuses not to, etc.. The downside, WHAT HAPPENS IF you get seriously ill/sick (CHADSLAWN), and can't get service done how many accouns will stay w/you? Truck takes major dive and can't afford repair as well as truck rental. When do you retire?? Are you budgeting for future, Maxing out traditional IRA and putting away money in pre-taxed IRA??? Can you sell your business later if its only an accout list w/ one truck and equipment and make it okay??
These are all questions I have been asking as a company who has been growing s l o w l y snce 1988. I still only have 3 vehicles and trailers, and have plenty of potential to grow by referrals alone. Heck we turned down over 300 new accounts this year and over half were referred. Why?? Where's the help? We pay 50%h.c, vacation, sick, holiday, Christmas bonus and don't work guyspast 50 hours a week (usually 45 as overtime gets too expensive and cuts too much into profit). Yes, the biger you are, the more headaches and less profit margin.
I am just hoping t be able to retire in about 20 more years (55) and sell building, land, trucks, equipment and accounts and use this money as well as other investments to liv cmfortably.
These are the issues that everyone should think about, not just this day, week, or year, but ultimately "Where will I be when I'm done w/ all of this??"
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