View Full Version : REASONS P EOPLE FAIL
01-10-2000, 10:00 AM
I WOULD LIKE TO KNOW, THE MAIN REASONS THAT OTHERS HAVE FAILED AND YOU HAVE MADE IT. I DO NOT WANT TO WALK IN THERE SHOES. THANK YOU FOR THE HELP.
01-10-2000, 10:23 AM
Well the big reason I have seen in the past 8 years Ive been doing this is, trying to grow too fast. Its fun to predict which guys arent going to make it thru a season when you see em out in April, brand new 40k truck, three ZTRs on a triaxle trailer and a dozen 1/4 acre lawns in their pocket<G>. You need to start off with what you can handle and grow with your business. You dont buy a toddler grown-ups shoes even though the kid will grow into them and expect the kid to walk, you need to get the equip that fits and move up as it requires.<p>Also see a lot of co's fall on their face by trying to do too much, a guy has a paving co., decides he's going to suddenly be the worlds largest landscaper too, now he has neither business. who was it, Mama Cass who choked on that big sandwich and died? Sometimes the best lessons are from others mistakes.<p>Bill
01-10-2000, 10:49 AM
I think alot of people go in to this business thinking that they are going to make alot of money their first year. Or their second year. Talking to some guys in my area they don't even keep up with their outgo and spend it like it is a profit. When the get rich quick doesn't happen, they get frustrated. So many people think that this is easy work. They think just because that they can easily cut their own yard that 10 yards a day will be just as easy. They can't picture their equipment breaking down under such a work load. Or themselves. The employees not doing a good job or not showing up at all. The onery customers, some of whom don't think of you when it comes to paying their bills. I could go on but you get the idea. I have always been realistic about the potential of this business. I try to plan ahead and not get myself spread to thin. Customer wise and financially. This is my 9th year. I have made plenty of mistakes along the way too. Just not career ending ones(knock on wood).<br>Charles<br>
01-10-2000, 11:02 AM
Main reasons for business failure in order of importance are:<p>1. Not having a business plan <p>2. Inadequate working capital<p>3. Not knowing the "numbers"<p>4. Taking customers for granted<p>5. Taking employees for granted<p>6. Losing perspective for priorities<p>7. Ego - not seeking outside help when needed<p>Nilsson Associates, Consultants
01-10-2000, 02:44 PM
I think that Phil has some excellent points. Of course, it is often hard to tell when a competitor has failed, as sometimes they just fade away, and are not noticed.<p>I think that #7 Ego is a big one, but not in the way Phil said. I think and see that a lot of guys want to show off to others that they can have a brand new truck, mowers, trailers, ect. I know of one local competitor that has a brand new Dodge 4x4 dump, huge new enclosed trailer, a couple of hydro walk behinds, ect. His rig looks great, but I question the need for all that glaumor(fancy truck and trailer).He is usually working alone. I can accomplish the same work with my older truck, and properly sized trailer. So, his costs are much greater than mine, and therefore he has to a. make a lower profit, or b. work more to make a nice profit. <p>Another ego thing I see is that guys like to be able to say I do such and such job. They may low ball a job just to get it, and have the privelage of saying they do that particular job. Now, I will admit it, I did this when I first started. I had a line on a high traffic commercial job. I took it cheap thinking I would get a ton of business from that job. I didn't get a single job from doing that site. Everytime I went to that particular job, I regretted the low price I was working for. When the job re-bid next season, I was way higher than the prevoius year, and did not get the job. I have seen many others there over the years. <br>
01-10-2000, 06:17 PM
Here in South Florida, it seems like anybody with a pickup and a Murray thinks ,Hey, I'll start cutting grass for a living. As mentioned above, rapid groth seems to be the objective. The majic answer to this problem is almost allways low-balling. Shortly after becoming busy your Murray expiers! So you go to commercial equiptment dealer and he's talking eight grand for a new mower. Now your thinking about that five or ten bucks per lawn that your not getting. It sure would come in handy now.It may even determine your survival in the green industry! Remember, bargains come and go. Quality never goes out of style. Be a professional,and allways get your price! Yesteryear L/S
01-11-2000, 03:11 AM
The folks that seem to make it long term are those that (at first) may have to price low to get "a start" but then as quickly as possible, price right, drop low paying customer market and move onto bigger things.<p>Some customers aren't willing to give the new guy a chance to prove himself unless he has a low price. It's only a testing ground at first .. where you "pay your dues" but don't stay "paying your dues" forever. Graduate yourself up to the better markets, find where you belong. Let the next "new guy" have your old customers ... where he too gets his start. You need to produce at least $30 an hour to survive and make it to the next level. I'd rather see that hourly return at $35 to $40 (at least) per hour produced "on the ground".<p>Nilsson.Assoc@Snet.Net
01-11-2000, 03:55 AM
The last post,phil I think I'am new here,I beleave this to be true since I have moved and will be starting in a new market.good info.thanks<p>----------<br>John <br>
01-11-2000, 04:53 PM
P.S. I just wanted to say also, what a <br>great resource this site is for all of <br>us mow guys. New or been around for a <br>while. Our work is allways evolving and <br>there is allwayse somthing new to learn. <br> Happy Mowing and good luck. <br> Yesteryear L/S
01-11-2000, 05:20 PM
Phil, is that 30 an hour profit or is it 30 that includes labor, insurance, etc. Not sure what you were talking about and there is a big difference in the two.<br>
I have a friend who made millions in the vending business and I asked him for advice before I started in lawn service. He said pick ONE thing you do better than anyone and do it over and over. Keep your hair short,neveruse profanity in front of a customer or you employees,never put rings in your dog gone ears, don't smoke around customers, always clean up your mess, and always do what you said you would do. He said if a person will do this he can demand a better price and keep the good customers . He told me "If you get every job you quote, you're fixin to go out of business"
01-14-2000, 03:16 AM
I agree with Phil on point 7 "EGO".Each year<br>I see some clown with a brand new $60,000.00<br>tractor/slasher with a shiny new truck.I get<br>exactly the same hourly rate with my 1986<br>model tractor/slasher and my 1973 model <br>truck.And then these same boofheads complain<br>when they get repossesed and go down the <br>chute. Always amazes me.
01-14-2000, 03:46 PM
Let's not try to ignore the benefit that the bottom feeders, lowballers & boofheads have brought to the green industry. For over 20 years I have seen new faces every year, and I know that they're charging 25% to 50% of what I am charging. I know most of them won't be back next year, but who is going to service theei former customers. These people have been spoiled by not doing the labor for a year and they don't want to go back to it.<br>Now that customer has seen me working in the area for the last 5, 10, 15 years so he knows I'll be around next year. He knows he's going to pay more for the dependability.<br>Last year I lost a $5K job to a lowballer, but I replaced the business within a month. The customer said he would save a at least $1K with new service. This summer their basement flooded because downspouts were plugged, something that we had always taken care of. Damage & lost time cost them about $12K (was a busy medical bldg). LONG LIVE THE LOWBALLERS!!!<p>----------<br>Jim<br>South Bend, IN
11-24-2002, 11:48 AM
Just thought I'd revive this thread from "the early years". Seems like this group as a whole has really grown. Let us not forget where we came from.
11-24-2002, 12:19 PM
I have to agree with trying to grow to quick and failing. I started off with a 36" walk behind and 15 accounts. Then every year after that I bought a new piece of equipment and gained more acccounts. When you slowly grow it makes it easier to handle your equipment expenses and dont have to worry about a $40000.00 loan you got out to start your business. It can be hard to get out a huge loan from the beginning and trying to get enough accounts to pay for it when you have virtually no experience. I wait till I get enough accounts then buy new equipment.
11-24-2002, 12:47 PM
Excellent reading here!!!
LIke others have said above, the one thing that can get you in the red faster than anything is buying qrowth into your business rather than planning for it. Making the wrong purchase at the wrong time is a killer. Just the other day I heard of a lco in the area selling out. Trailer, various tools, mowers. All purchased in the spring. He was selling them probably at 40% of what they were actually worth. Why?- He failed to factor in that he needed CUSTOMERS to make money, not just equipment.
You must be on time, do good work, be effecient, and PLAN for growth.
11-24-2002, 02:58 PM
My dad who was the president of his own management and marketing consulting firm (large) told me a very long time ago this..."son, it isn't all about how much you make, it's about how much you get to keep".
Never the less, that thought comes into play when handling expenses (fuel, insurance, equipment, payroll, etc.) What can I do is lower them, thus making my bottom line better.
Just my 2 cents.
11-24-2002, 03:16 PM
Wow. A lot of stuff already said. A lot of it I agree with, some I disagree with. And other stuff hasn't been addressed. I'll try to touch on these.
First, I am not sure I agree that trying to grow too big too fast is necessarily a killer. Since day one I've been trying to grow as fast as I could. I slowed down as we got bigger because I was pretty comfortable financially. But overall, we still have more growth than most other LCOs around here. I think you just have to be careful to keep that growth in check with reality. Buying big expensive trucks and equipment when you can't afford to will obviously hurt. I've never done that though. We grew like crazy but I never bought a new truck until I had tons of clients and was making really good $. And even now, we only have one new truck - mine. I don't waste money on new trucks for my crews.
I agree that spending $ as soon as you get it, without reinvesting, saving, etc. is a big one. And it's a fault of many of us. If you don't get that under control eventually it will kill you.
I agree with the lawnguy that trying to be a jack of all trades isn't good. Start out slow and master one trade at a time. I just started with lawn care. After 3-4 years doing that and mastering it, we began to diversify (slowly) into other landscaping areas.
I am not sure I agree that not having a business plan is necessarily going to kill you. I've never had one. It's always just been in my head what my short term and long term goals and plans were. And since I haven't ever borrowed $ from banks, I haven't seen any need for an official business plan.
I think the #1 reason most businesses fail (and especially ours) is the owner just sucks at marketing. There are guys in my town with crappy flyers (or they don't do flyers at all), junky looking trucks and trailers with no company image or lettering on them, poor unprofessional estimates, no uniforms, no web page or a really crappy one, cheap business cards, etc. And then they are trying to market their business to white coller professionals who notice all of this stuff. And then we come in with all our ducks in a row, still offering a competitive price, and just blow these guys out of the water.
A lot of it, too is having the right attitude and aptitude. You can survive just mowing lawns with a poor attitude or even if you are just plain stupid. But you'll never get big. Negative attitudes is probably one of the biggest reasons people fail at a lot of stuff in this world.
Man, there are probably tons of reasons LCOs fail. The ones mentioned on this page are just a few.
11-24-2002, 04:03 PM
lack of cash flow. as in any biz, will kill you.
Mueller Landscape Inc
11-24-2002, 05:04 PM
I agree with Jim. Most LCO's do not know how to market their service and do not have a professional image. But I think the number 1 reason is what Phil said; not having enough working capital and not knowing your numbers. It really does take money to make money. If you are going to grow then you have to have cash to support that growth. It is the "life blood" of any business. Along with all of that is maintaining good credit. Something that I didn't do in my early years and I have been paying the price for in my older and hopefully wiser years.
This has been a good thread with some great information. I find this thread scary too since I am going to be starting out in early winter.
11-24-2002, 06:23 PM
1- not charging enough for their services. $35 per man hour minimum.
2- not keeping up with taxes and insuance etc. You need to know who you need to pay and when.
11-25-2002, 12:35 PM
Great thread. Thanks for reviving it from a couple of years ago.
Nielssen's points are great. I think it is critical to have a business plan and sufficient working capital and cash flow. Most guys don't understand the dynamics of cash flow. They go out and don't know the numbers they need to make in order to make money on the income statement. Often they make enough money to get by but they are dying a slow death because they don't factor in all the hidden factors such as depreciaton, interest, replacement costs, taxes, insurance, etc. They also try to get rich quick or commingle their personal and business affairs.
By the way jimlewis - I think you were operating with a business plan (just not written down) or you couldn't have grown to operate multiple crews.
Our business plan helps with the growing pains because it allows our crew leaders to know what we are trying to achieve as a company and how they can help within their position. That way for us as the company hits its goals the employees receive more perks - more paid days off, bonuses, new responsiblities, etc. It also gives us a way to have a quantative way of assessing the company, the clients, and the employees.
11-25-2002, 04:16 PM
The folks that seem to make it long term are those that (at first) may have to price low to get "a start" but then as quickly as possible, price right, drop low paying customer market and move onto bigger things.
That is how I started. I used to work in a low income neighborhood. I decided I wanted to work in a neighborhood of the $300,000 and up homes. Just about everyone already had a lawn service. So, I had to compete and that is what I did.
$15 a cut. I got about 40 calls and booked 30 of them. The next year I let them know that was a promotion and it will now be $25. I lost about 10 customers but it was worth it.
The reason I think guys don't make it is they just look at it as one cut. But, its not one cut. If you miss just one cut or make your customer upset and they cancel you are not loosing $25. You are looseing about $800 for all the other times you could be cutting.
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