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rcreech
08-22-2008, 11:07 PM
Have you all heard of many guys getting out of the business?

I talked to a great friend that sold his business (1600 accounts) two years ago and also another person that works in turf product sales.

They both have many contacts....and they both said that they know of many guys that are thinking of getting out of the business.

Have you heard of many doing so?

Tell you what....I am really freaking out a little right now and not sure what to do!

A crystal ball sure would help about now! :laugh:

I already have the fert...but still have to raise my prices around 30% either way next year. I am really thinking that most people will drop the service when they see that big of an increase.

Does one cash his chips in now and run...or see what happens and take the chance of riding it down and crashing? :cry:

I could sell my business, 100 ton of fert and all my equipment and make out REALLY WELL...but if I wait "too long" it may not be worth much!

What are you going to do? What have you heard from others?

whoopassonthebluegrass
08-22-2008, 11:27 PM
LawnTamer and I discuss this frequently. While the industry may revive with an economic turnaround, I fear that it's more likely that we're looking at a permanent shift for the worse.

We both run successful operations, but we're also both getting older every year, and don't exactly have a retirement package...

Basically, we've come to the conclusion that we'd best start digging a new well before this one runs dry. We're building a new business together that has absolutely NOTHING to do with the green industry...

If we're being fed the truth about why fertilizer prices are climbing, then we can't really hope for a turnaround. We will all quickly price ourselves out of usefulness to the masses. I'm sure as hell not gonna settle for weaker profit margins. They're already marginal as is.

I'm hoping that I'll be 100% out of this industry within 3 years...

LushGreenLawn
08-22-2008, 11:31 PM
2 years ago I called and got prices from TruGreen and Scotts. I just called again recently to see how much they have gone up, as I am a little worried about it myself. They both went up from around $80 to around $110.

My feeling is that when you raise prices, you may have wuite a few people shop around, but when they realize that everyone else has done the same, they will stick with you. A few may leave because they can't afford it at all, but really, this is a service for people who have the extra money to spend, and an extra 30% is not going to make them give up their nice lawn.

Many of my customers were do it yourselfers, and they realize that they just can't get the same result with granular stuff from HD and Lowes.

whoopassonthebluegrass
08-22-2008, 11:46 PM
A few may leave because they can't afford it at all, but really, this is a service for people who have the extra money to spend, and an extra 30% is not going to make them give up their nice lawn.

With all due respect, and acknowledging that your area might be different than mine, I have to strongly disagree. If only the truly well off used us, 80% of us would be out of work. I think that a SIGNIFICANT percentage of our clientèle are those in-debt-up-to-their-eyeballs, keeping-up-with-the-Joneses, mortgaged-to-the-hilt types. And if THEY drop off, so do we.

JDUtah
08-22-2008, 11:54 PM
Yup whoop.. that's Utah for you. Spend more then you have/should...

I heard Banna Republic was going to back out when they were building the gateway (Salt Lake City) because our demographic 'couldn't support it'. So the developer rented a helicopter anf flew the decision makers along the bench saying "we might not have the money, but we spend it, look at these houses and cars."

Bannana republic opened, and is still there.

Might just be Utah, but I'de say the 80% number you threw out is right on.

rcreech
08-23-2008, 12:04 AM
With all due respect, and acknowledging that your area might be different than mine, I have to strongly disagree. If only the truly well off used us, 80% of us would be out of work. I think that a SIGNIFICANT percentage of our clientèle are those in-debt-up-to-their-eyeballs, keeping-up-with-the-Joneses, mortgaged-to-the-hilt types. And if THEY drop off, so do we.


I think you are right on there!

The only reason I started this post is....within the last week I have had 2 customers call and say to put their fall application on hold due to grocery bills and gas going up!

Take high gas, incrased food prices and some job loss then add a 30% increase and we will be on the street corner begging for money so we can eat!

I may just get the heck out! I hate it too because I love what I do everyday and have a very sound business, but don't want to watch it CRUMBLE under my feet. Right now atleast I have a saleable product!

ted putnam
08-23-2008, 12:20 AM
Guy's, if we do want to stay in this business, we're gunna have to change the way we do things. Whether it be the products we use or how we use what we have.There are plenty of people who will have their lawns done by someone and probably always will. The competition for customers may become fierce. We are all farmers we just grow turf instead of Rice, soy beans or corn.(except for Creech) he grows that also. This affects them too. Don't kid yourself, things are not going to get so out of hand that America can't grow it's own food. If it does,we were all FUBAR anyway! There are alternatives to the traditional products and ways of doing things.The days of being "N Slingers" because it's cheap and easy is over. It's time time to start running your business like a business, keeping up with the latest ideas,products,etc... and keeping a closer eye on what's going out as well as what's coming in.

ted putnam
08-23-2008, 12:44 AM
I realize what some of you are saying, but i also know that if you sell, you'll be selling to someone like TG. I see and know how they run things around here. They literally have guys running halfway across this state from a single branch in Little Rock. I can't tell myself I can't compete with a company that has guys running 200miles one way to do lawns when my customer base is within a 25 mile radius and I do a much better job! I don't care how great a price they get on products. I can and will compete with that. Besides, do you really think they would buy you out if they thought it was a sinking ship? I don't think so...

Runner
08-23-2008, 12:48 AM
I'm not sure where the 30% figure is coming in, but here, we are seeing ALOT more than a 30% needed increase to stay afloat. Our raw material cost has increased 100% (doubled) in just this last season - since spring. Now, while that doesn't affect our entire cost, it does affect alot of it. Where we were at 12 dollars a bag in the spring, we are now at 24 dollars per bag. All we are hearing is how much worse it is going to be come the first of the year. it is DEFinitely going to take a different kind of sales in the future.

ted putnam
08-23-2008, 02:51 AM
2 years ago I called and got prices from TruGreen and Scotts. I just called again recently to see how much they have gone up, as I am a little worried about it myself. They both went up from around $80 to around $110.

My feeling is that when you raise prices, you may have wuite a few people shop around, but when they realize that everyone else has done the same, they will stick with you. A few may leave because they can't afford it at all, but really, this is a service for people who have the extra money to spend, and an extra 30% is not going to make them give up their nice lawn.

Many of my customers were do it yourselfers, and they realize that they just can't get the same result with granular stuff from HD and Lowes.


I've already seen what you've said happen in my business this year...earlier.Overall, my customer count went down a little, but my bottom line increased. Of course, increased fert prices negated that some. A 30% increase all in one wack is a little hard to swallow. Unless things get extremely crazy, I can't see where an increase of that magnitude is necessary, at least not with my business. I have heard of some who did not increase this year or did, but just a token amount. They are suffering right now. They did not stay informed and went on "business as usual", and now they're paying for their ignorance. If anyone folds, it'll be them. Lowballing or being complacent will get you killed in this business these days.

rcreech
08-23-2008, 07:09 AM
I'm not sure where the 30% figure is coming in, but here, we are seeing ALOT more than a 30% needed increase to stay afloat. Our raw material cost has increased 100% (doubled) in just this last season - since spring. Now, while that doesn't affect our entire cost, it does affect alot of it. Where we were at 12 dollars a bag in the spring, we are now at 24 dollars per bag. All we are hearing is how much worse it is going to be come the first of the year. it is DEFinitely going to take a different kind of sales in the future.

I am DEFINITLY not going to down play this fert increase...but fert can be a little deceiving on the overall cost of our service!

I got very lucky and hedges the market way back and got my fert bought reasonably...so I was just planning on covering replacement cost.

EXAMPLE

But say you charge $140/ac and use a 32% N and was buying your fert for $12.50/bag then your cost was $33.00/acre.

If the cost increased to say $23/bag it now costs you $62.53.

Now that is a $29.53 increase is fert costs but if you would raise your prices 30% you will increase the app charge by $42.00.

That is a net increase of $12.47 which would help cover future increases, fuel etc.

To me...that was the way I was going to go!

If you didn't get your fert bought right....or still don't have it.....maybe this doesn't look as good.

Plus who says you couldn't inform your customers also about the increase in price and also tell them that they will not be getting as much N. You could also pick up some serious $$$$$$ by the increase AND cutting back on N at the same time!

Please tell me if I am missing something.....because my head is spinning so much that I sure could be! I have never felt like this before, and that is one reason I don't feel good about the whole thing (where we are going)! My gut usually is right if I listen to it. Maybe I a wrong this time!

mikesturf
08-23-2008, 08:55 AM
Hidden reason next year could mean more work. This year you charge a customer $300 per year to fertilize and next year the price goes to $400. You properly explain and show that the increase is soley for fert prices and I am not making any extra money. Initially the customer accepts it. However, during the year, the customer will expect MORE service, exceptional weed control because they are paying so much, we might get more complaints... and in the backs of their minds they may be thinking I can go to Home Depot and do it myself.

cod8825
08-23-2008, 10:32 AM
It is time to start making our own fertilizer all we need is a natural gas well and a couple of other pieces of equipment.

whoopassonthebluegrass
08-23-2008, 11:27 AM
It is time to start making our own fertilizer...

Amen to that! I removed our toilets and now have my wife and kids overeat like crazy and then use big metal garbage cans to relieve themselves. It's unpleasant to work with, and a cut on my arm is festering really bad... but it's worth it to hold onto my profit margin.

Mscotrid
08-23-2008, 11:54 AM
Amen to that! I removed our toilets and now have my wife and kids overeat like crazy and then use big metal garbage cans to relieve themselves. It's unpleasant to work with, and a cut on my arm is festering really bad... but it's worth it to hold onto my profit margin.

Whoop, That is one visual I could have lived without...:cry::cry: lol

Terraformer
08-23-2008, 12:46 PM
I think Rodney is making a legitimate point and more importantly he's thinking beyond 2009. That said, I'm on the other end of the "professional applicator" spectrum. This is primarily due to the fact that I'm much smaller scale and I don't have many fert contracts to be concerned about. I did want to expand my business this year, to include full service fert contracts, but I couldn't pin down fertilizer costs so I just passed for this season. I also decided not to purchase a high end ride-on this year.

So I continued with my renovation and reclamation business. I quote each job based on the current price of fuel and herbicide product required. People hire me to resolve problems causing them grief (Example - property overgrown with noxious weeds - including thistle and sandbur). I also offer aeration and over-seeding services for large properties and some limit grading.

I guess you could say my focus is to provide services that homeowners can't do with their 52" garden tractor, or ZTR, Scott's spreaders/sprayers and weed whackers.

I thinking of more aggressively advertising these service and adding pesticide (i.e. flea, tick, mosquito, beetle and mole) services... these too are problems homeowners are ill equipped to deal with. I will NOT be offering contract/scheduled fert service for 2009.

Lastly, I'm considering about obtaining my "Right-of-Way" license. Since I live in a rural area, I would like to offer PGR, herbicide and pesticide services to nearby townships and municipalities. Currently, they mow roadsides with Ag tractors using hydraulic flail mowers that are not cheap to contract and operate.

I'll reconsider providing fert contracts when the market stabilizes.

Comments are welcome.

roccon31
08-23-2008, 01:06 PM
terraformer, i am in a similar situation as you, having added lawn renovation services this year. my primary focus is small excavating jobs-drainage, driveway repair, sealcoating, sidewalks, etc. i gotta hand it to you if this is all you do. it seems to be a hard sell as people just cant understand the costs involved in making a lawn! i can only imagine if the prices were going to keep going through the roof.

Terraformer
08-23-2008, 01:16 PM
Have you all heard of many guys getting out of the business?

I talked to a great friend that sold his business (1600 accounts) two years ago and also another person that works in turf product sales.

They both have many contacts....and they both said that they know of many guys that are thinking of getting out of the business.

Have you heard of many doing so?

Tell you what....I am really freaking out a little right now and not sure what to do!

A crystal ball sure would help about now! :lau

I already have the fert...but still have to raise my prices around 30% either way next year. I am really thinking that most people will drop the service when they see that big of an increase.

Does one cash his chips in now and run...or see what happens and take the chance of riding it down and crashing? :cry:

I could sell my business, 100 ton of fert and all my equipment and make out REALLY WELL...but if I wait "too long" it may not be worth much!

What are you going to do? What have you heard from others?

Hey Rod - I agree that it hasn't been a fun year with this type of business, but I plan on sticking around and offering more specialized services (posted earlier). I gotta believe that product prices will settle down, even fall back, otherwise manufacturers and distributors will price themselves out of the market. These prices are even hurting the farmers and retailers... I can't see it continuing long term.

ted putnam
08-23-2008, 01:27 PM
Hey Rod - I agree that it hasn't been a fun year with this type of business, but I plan on sticking around and offering more specialized services (posted earlier). I gotta believe that product prices will settle down, even fall back, otherwise manufacturers and distributors will price themselves out of the market. These prices are even hurting the farmers and retailers... I can't see it continuing long term.

My points in my posts...I agree totally!

whoopassonthebluegrass
08-23-2008, 01:38 PM
I gotta believe that product prices will settle down, even fall back, otherwise manufacturers and distributors will price themselves out of the market.

If it's true that the manufacturers are getting their asking price elsewhere in the world, then we've no reasonable expectation of prices dropping.

Terraformer
08-23-2008, 01:42 PM
terraformer, i am in a similar situation as you, having added lawn renovation services this year. my primary focus is small excavating jobs-drainage, driveway repair, sealcoating, sidewalks, etc. i gotta hand it to you if this is all you do. it seems to be a hard sell as people just cant understand the costs involved in making a lawn! i can only imagine if the prices were going to keep going through the roof.

roccon, if a painted a rosy picture I didn't intend too. Early this year I fully intended to offer a complete lawn maintenance service - less contract mowing. However, I too got very frustrated with the spiraling prices of ALL product and the goofy pricing practices of many of my local distributors. Then of course there was the double whammy of the insane fuel prices. This created a situation where I couldn't advertise and broadly market my services, because I'm not doing this to lose money. I'm not making much this year, but the word of mouth work I get is profitable. I will say it has led me to a different business model for next year.

tlg
08-23-2008, 03:47 PM
Fertilizer and fuel. The two things that are effecting us all are really beating up our margins. We will all have to raise our prices to cover the increases we have seen in this current situation. I think most customers will expect their prices to go up for 2009 and accept the increase. How much that increase will be remains to be seen. If you have stockpiled fert for 2009 you already have an advantage over the other guys because you have in fact predicted your business future. I think it's way to early to bail out at this point. I also think things will level off as the market adjust to the increases we have seen. It all boils down to how valuable your service is to your customers. If they want it they will have to pay for it. Lawn fertilizing customers have been spoiled with low prices for years . How many service companies will even show up for less than $50. For example: My wives dryer quit working the other day. Called the appliance repair guy. $80 bucks just to show up, $10 part and $35 labor for 15 minutes of work. Not bad. My point is I think we as owners have under valued our services for years. I say hang tough, be an exceptional manger, control the cost you can, and live to spray another day.

rcreech
08-23-2008, 03:49 PM
Hey Rod - I agree that it hasn't been a fun year with this type of business, but I plan on sticking around and offering more specialized services (posted earlier). I gotta believe that product prices will settle down, even fall back, otherwise manufacturers and distributors will price themselves out of the market. These prices are even hurting the farmers and retailers... I can't see it continuing long term.


Actually...the "fertilizer market" could care less about the distributors, farmers, lawn guys or retailers.

There is absolutly no reason for it do drop right now...as we can barely even get it! With demand higher then ever and supply lower then ever we are far from a market drop as of now.

The price is only driven by one thing...and that is who wants it the worst!

That is actually the reason I started this post! Because I THINK that is exactly what is happening before our eyes! We (the lawn guys) are going to get priced out and people are going to back of big time!

Scary thougth, but I can tell you that the fert market is out of control right now and probably won't change for atleast 24 months from what my sources I told me!

ted putnam
08-23-2008, 04:32 PM
Fertilizer and fuel. The two things that are effecting us all are really beating up our margins. We will all have to raise our prices to cover the increases we have seen in this current situation. I think most customers will expect their prices to go up for 2009 and accept the increase. How much that increase will be remains to be seen. If you have stockpiled fert for 2009 you already have an advantage over the other guys because you have in fact predicted your business future. I think it's way to early to bail out at this point. I also think things will level off as the market adjust to the increases we have seen. It all boils down to how valuable your service is to your customers. If they want it they will have to pay for it. Lawn fertilizing customers have been spoiled with low prices for years . How many service companies will even show up for less than $50. For example: My wives dryer quit working the other day. Called the appliance repair guy. $80 bucks just to show up, $10 part and $35 labor for 15 minutes of work. Not bad. My point is I think we as owners have under valued our services for years. I say hang tough, be an exceptional manger, control the cost you can, and live to spray another day.

Well said! My sentiments ecactly! In fact many of my customers have asked "Why haven't you gone up already...everything else has?" Most expect it.

tremor
08-23-2008, 05:21 PM
The Commercial Lawn Care industry is lllllooooonnnnnggggg over due for this. No other service profession has resisted raising their fees this long.

Last winter we were chewing the fat about price increases at a trade show. One of my oldest customers said he wouldn't be raising any of his "good customers". I resented that statement & told him so. When I raise the price of seed or fertilizer it isn't just for "bad customers". If costs increase then the price goes up for ALL customers. If there was ever such a thing as a "good customer" then it is the one who sticks with us when prices are going up.

Get this straight:

Ryegrass & Tall Fescue are going up again in 2009.
Urea & DAP are NOT going down for at least 18-24 months.
Insurance isn't going down.
Utilities aren't likely to go down.
Fuel will continue to bounce around but fertilizer won't be affected.

Here is a cold hard prediction.....

Some LCOs will pay over $28 for 12,500 sq ft of Round 1 if the don't start hedging.

Terraformer
08-23-2008, 06:36 PM
Fertilizer and fuel. The two things that are effecting us all are really beating up our margins. We will all have to raise our prices to cover the increases we have seen in this current situation. I think most customers will expect their prices to go up for 2009 and accept the increase. How much that increase will be remains to be seen. If you have stockpiled fert for 2009 you already have an advantage over the other guys because you have in fact predicted your business future. I think it's way to early to bail out at this point. I also think things will level off as the market adjust to the increases we have seen. It all boils down to how valuable your service is to your customers. If they want it they will have to pay for it. Lawn fertilizing customers have been spoiled with low prices for years . How many service companies will even show up for less than $50. For example: My wives dryer quit working the other day. Called the appliance repair guy. $80 bucks just to show up, $10 part and $35 labor for 15 minutes of work. Not bad. My point is I think we as owners have under valued our services for years. I say hang tough, be an exceptional manger, control the cost you can, and live to spray another day.

Hey tlg - I don't believe I'm know for being a smart ass, but the idea of having multiple wives scares the heck out of me - compared to the ridiculous prices increase we're al facing.:laugh:

Rayholio
08-23-2008, 09:31 PM
Yep.. A lot of people are going to drop out.. but the ones of us who are willing to work harder, MAYBE for less money in the short term will see anouther hay-day some time in the future.. and don't be afraid to raise your prices.. I do it every year.. It's really not a big deal, as people EXPECT it.

Whitey4
08-24-2008, 03:11 PM
Just got a mailer from Scotts lawn care... they want $48 per app for 2k of turf. Straight fert. It may be rough elsewhere, but with competition like this, I'm not going anywhere.

americanlawn
08-24-2008, 06:10 PM
Farmers here in the Midwest experienced the same thing in the 80's. Many went bankrupt and lost their farms cuz they lost money raising livestock. Corn & soybeans weren't much better. Now most Iowa farmers are "row crop" only -- no livestock. Very few small farmers exist today. My younger brother still runs our family farm today (540 acres of some of the best soil in the world, but it's corn & soybeans - not the 300 - 400 head of cattle I was used to when I grew up). My brother was lucky cuz everything was "paid off" for him (land, buildings, equipment).

I'm in the same situation (we owe no long term debt) except for one detail.... everything we own was EARNED from hard work & long hours by my wife & me......Nothing was 'given' to us Our home is paid off. Our 2 commercial properties are also debt free, and we owe just a little on a rental house that makes us money. Our trucks & equipment are also paid in full. We judiciously keep our customer base at just over 3000 (annually weeding out the unprofitable accounts & the PIA accounts). We always buy fert by the semi load (sometimes 3 semi's at a time), and always taking advantage of any prepay discounts. We are not a franchise, so we keep all our income. I always check out new stuff (equipment & products) to improve profitability.

Okay.......this may seem like I am bragging. I certainly don't mean to. I figured you guys may want to know where we're at. We will continue the struggle to operate at a profit, and I realize it means hard work and many hours per week.

I'm 54, and I worked 6 1/2 days this week (just got done a few minutes ago). I often put in 90-hour work weeks when I started my own lawn care business, but it was necessary in order to make a profit. I started out with nothing.....just a co-signed note from my Dad.

My advice: 1) work hard, 2) work smart, 3) buy in truckload quantities (even if you have to share with a competitor), 4) never put off what you can do today. Sounds simple, but it ain't easy.

ChemLawn Corp told us (in the old days) that a "recession" will never hurt the lawn care industry. And I agree, cuz they were right everytime.

Bottom line: This guy ain't rollin' over for anything. We're not afraid of hard work, and we realize that taking risks is a part of any business. I have never taken a dime of welfare money in my life cuz I was raised by Depression-era farm parents in Iowa...............anybody else that was raised the same knows iwhat I'm talking about. "Cut & run" ain't in our blood. :usflag::usflag:

whoopassonthebluegrass
08-24-2008, 06:18 PM
I hope you're right, Larry. I'm hoping we can all maybe look back at this point in the future and laugh at how nervous we all got...

americanlawn
08-24-2008, 06:55 PM
attaboy Whoopass -- lot's of fine folks on this site with legitamate concerns. Me..... I ain't worried. Everything always tends to work out in the long run.

Have faith bro. Remember the old saying, "separating the sheep from the goats"? or how 'bout this: "Good luck is created by hard work".

This is not the first time American Patriots have experienced struggles, cuz they always find a way. :usflag:

tlg
08-24-2008, 08:19 PM
Hey tlg - I don't believe I'm know for being a smart ass, but the idea of having multiple wives scares the heck out of me - compared to the ridiculous prices increase we're al facing.:laugh:

WOW!!!!! Guess I should have paid a little more attention in English class! On second thought the diction problem may have been some sort of Freudian thing as my wife wears many hats and has told me countless times that she does the work of many people ( wives ). This may have lead to the inference of multiple wives when in fact there is only one. The multiple personality thing has never really figured into anything as far as I can recall, but can't be ruled out as seeing her as more than one person or wife. I just wish one of them knew how to fix the broken dryer!:laugh:

whoopassonthebluegrass
08-24-2008, 08:45 PM
...my wife wears many hats...

Oh! So she's that batty old lady I see at church!

ted putnam
08-24-2008, 09:26 PM
Farmers here in the Midwest experienced the same thing in the 80's. Many went bankrupt and lost their farms cuz they lost money raising livestock. Corn & soybeans weren't much better. Now most Iowa farmers are "row crop" only -- no livestock. Very few small farmers exist today. My younger brother still runs our family farm today (540 acres of some of the best soil in the world, but it's corn & soybeans - not the 300 - 400 head of cattle I was used to when I grew up). My brother was lucky cuz everything was "paid off" for him (land, buildings, equipment).

I'm in the same situation (we owe no long term debt) except for one detail.... everything we own was EARNED from hard work & long hours by my wife & me......Nothing was 'given' to us Our home is paid off. Our 2 commercial properties are also debt free, and we owe just a little on a rental house that makes us money. Our trucks & equipment are also paid in full. We judiciously keep our customer base at just over 3000 (annually weeding out the unprofitable accounts & the PIA accounts). We always buy fert by the semi load (sometimes 3 semi's at a time), and always taking advantage of any prepay discounts. We are not a franchise, so we keep all our income. I always check out new stuff (equipment & products) to improve profitability.

Okay.......this may seem like I am bragging. I certainly don't mean to. I figured you guys may want to know where we're at. We will continue the struggle to operate at a profit, and I realize it means hard work and many hours per week.

I'm 54, and I worked 6 1/2 days this week (just got done a few minutes ago). I often put in 90-hour work weeks when I started my own lawn care business, but it was necessary in order to make a profit. I started out with nothing.....just a co-signed note from my Dad.

My advice: 1) work hard, 2) work smart, 3) buy in truckload quantities (even if you have to share with a competitor), 4) never put off what you can do today. Sounds simple, but it ain't easy.

ChemLawn Corp told us (in the old days) that a "recession" will never hurt the lawn care industry. And I agree, cuz they were right everytime.

Bottom line: This guy ain't rollin' over for anything. We're not afraid of hard work, and we realize that taking risks is a part of any business. I have never taken a dime of welfare money in my life cuz I was raised by Depression-era farm parents in Iowa...............anybody else that was raised the same knows iwhat I'm talking about. "Cut & run" ain't in our blood. :usflag::usflag:

If that doesn't inspire a person to hang in there...nothing will.

LawnTamer
08-24-2008, 09:36 PM
I appreciate Larry's optimism. This is certainly not a hay-day time for the green industry. I think a key question for long term planning has got to be the sustainability of this industry the way it is currently being run. I am no global expert, I don't pretend to be one, but here is what I see.

American suburbia has been propped up to the world as the ideal for decades. Movies, TV shows and magazines and advertisements all extolling the virtues of the American dream...ie a nice home on a little chunk of land with perfect lawns and 2 nice cars in the garage. Think of commercials, sitcoms, movies etc. This is how we are told we are supposed to live, from Tim and Jill Taylor to Ray and Debra Barrone. We have benefited greatly from this image, it has in essence created our industry. How many of our clients use us because they have a deep personal interest in healthy turf? Maybe 1 in 100. People use us, because it is part of the image. 'The neighbors all have a green lawn, the people on TV have a green lawn, so I gotta have a green lawn.' Agreed?

The US has unwittingly exported this ideal to the world. At the same time, we are exporting our wealth to other countries, primarily China and India. I live in a neighborhood where nearly everyone is employed in the software industry. These guys go to India about as often as I go to buy fertilizer. All their companies have call centers in India. Go to Wal-mart, and you will see that the world is made in China. The result is that we are creating a middle class in these huge populations, a middle class who has seen and wants the American dream and has the money now to pay for it.

Is the American dream lifestyle sustainable on a global level? Do we have the resources to sustain 3 billion suburbanites? As competition for the limited resources increases, Americans who are mortgaged out to the hilt will not be able to keep up.

I think Larry is right, the industry won't die, but it won't continue as it is now, or as it has been. As an industry, we will need to find ways of giving our clients and acceptably green and weed free lawn using far fewer materials.

rcreech
08-24-2008, 11:05 PM
I totally agree with you Larry!

But my point is....no matter how hard you work, if people can't afford our services....then we don't make money!

I already have people canceling now because their gas and food bills have gone up so much...what is everyone going to say when I tell them next year that my prices have gone up 40%?

That is what scares me!

I am at 320 right now...and I predict I will lose atleast 30+% next year (total guess). So now....I not only lost 1/3 of my income, but my business will lose a lot of value, plus my risk has doubled!

I agree with you totally, but I could cash out now and make serious money and continue to farm and run my seed and chemical business, and the kicker is I would actually GET TO SEE MY FAMILY! The only reason I am looking at this is a "business move" as I already have a good backup income.

I don't know, but it is sounding pretty sweet to me right now. I love the lawncare business, but it I see it getting really tough in the near future!

whoopassonthebluegrass
08-24-2008, 11:19 PM
I suspect the challenge we face is the antithesis of what Larry has become. I suspect MANY of us on here are completely dependent on a day-to-day subsistence from our company.

I, for one, have ZERO cash reserves to just "ride out the storm". I haven't built that house of bricks yet, and it'll only take one long, steady gale to collapse my house of sticks. There's no option for me to just take a hit for a season or two. If my profits drop any lower, then I'm either looking for a night job or losing my home...

rcreech
08-24-2008, 11:34 PM
I suspect the challenge we face is the antithesis of what Larry has become. I suspect MANY of us on here are completely dependent on a day-to-day subsistence from our company.

I, for one, have ZERO cash reserves to just "ride out the storm". I haven't built that house of bricks yet, and it'll only take one long, steady gale to collapse my house of sticks. There's no option for me to just take a hit for a season or two. If my profits drop any lower, then I'm either looking for a night job or losing my home...


Exactly!

Think about it with me for a second!

If you think your business is going to collapse...then do you sell out why you have something to sell....or ride it down and have nothing?

I don't know...I am asking?

Right now I have an awesome business, inventory, and a lot of equipment.

All I have been doing is running numbers for the last two weeks. To me the writing is almost on the wall. I can sell my fert I currently have in storage alone and make almost a years salary! And the price I would sell it at would be well below what one can buy it at right now, so I shouldn't have any trouble getting rid of it!

Then I have my business and equipment on top of that! Tough business decision!

MnLefty
08-25-2008, 05:16 PM
Exactly!

Think about it with me for a second!

If you think your business is going to collapse...then do you sell out why you have something to sell....or ride it down and have nothing?

I don't know...I am asking?

Right now I have an awesome business, inventory, and a lot of equipment.

All I have been doing is running numbers for the last two weeks. To me the writing is almost on the wall. I can sell my fert I currently have in storage alone and make almost a years salary! And the price I would sell it at would be well below what one can buy it at right now, so I shouldn't have any trouble getting rid of it!

Then I have my business and equipment on top of that! Tough business decision!

Rodney-

I'm certainly not trying to shove you out the door, but the tone of your posts in this thread leads me to believe you almost have your mind made up. If you truly believe the ship is doomed to sink, then why would you ride it down if you don't have to? You don't have any employees to look out for (right?), so nobody to protect but yourself. Even if you think there's a chance of a rebound in a couple years, think of the toll that will take on you mentally and physically operating in fear of the rug being yanked out from beneath. Every business venture will require some risk that is normally conquered by confidence. Sounds like your confidence, not in yourself but in your market/customers is slipping. As cliche as it sounds it goes back to "if you don't think you can, you can't." Now if I'm reading you wrong here, that's a different story, but to me it looks like you're looking for approval to sell, rather than looking for someone to tell you it's not going to be that bad.

If you've got other options (I know you do) and feel you can get a fair price for what you've built, I say walk away. If other things don't suit you, you can always build it again.

phasthound
08-25-2008, 07:12 PM
I appreciate Larry's optimism. This is certainly not a hay-day time for the green industry. I think a key question for long term planning has got to be the sustainability of this industry the way it is currently being run.

Is the American dream lifestyle sustainable on a global level? Do we have the resources to sustain 3 billion suburbanites? As competition for the limited resources increases, Americans who are mortgaged out to the hilt will not be able to keep up.

I think Larry is right, the industry won't die, but it won't continue as it is now, or as it has been. As an industry, we will need to find ways of giving our clients and acceptably green and weed free lawn using far fewer materials.

Wise words, LawnTamer. :clapping::clapping:

Those who can grasp this and make it work will be successful. This country became great with hard work and ingenuity, but we have become complacent and dependent on the government and super corporations. We really do need to stop listening to them (yes turn off your TV!) and begin to understand what is really going on in the nation and in the world. What has worked for us in the last 50 years will not work in the next 50.


I'll go back in my cave now. I'm only here to sell fertilizer. :cool:

nobagger
08-25-2008, 08:12 PM
Ive thought of selling a time or two but it had nothing to do with profits or lack of business. It all had to do with employees or lack of them! Once again (this time of year) my main other guy seems to take on coaching various sports teams and leaves me hanging while my other help went back to college and only able to help 3 days a week. My problem is I work a F/T 7-3 mon-fri job and we mow a ton of accounts. Every year the main guy "coach" says nothing will interfere with mowing and for the past two years its done nothing but! Sorry for the little rant but I couldnt help it. As far as guys getting out.....I dont blame them, every swinging d!*k that has a truck and any old mower is a landscaper and the people who want the "real" landscapers dont want to pay the price, who can blame them for wanting to get out!

americanlawn
08-25-2008, 08:24 PM
Hey RC -- If you sell, then try to get back into lawn service 2 or 3 years later, you would have a difficult time getting many of your original accounts back. Most of your customers would have gone to competitors, and if competitors do a decent job, many customers would hesitate to switch again. ie: You would have to rebuild a customer base. This would be an uphill battle, profit margins could be even less, and hours worked per week would most likely be higher than they are now. Maybe you could keep a select few, in a tight route to take care of part time???

brian_b
10-01-2008, 12:54 PM
I have been looking around for companies to merge or purchase in the Mid-Atlantic area. We primarily do weed & feed, aeration and seeding. I have been approached by a lot of cutters looking to get out.

Not so many weed and feed though. Most of the contacts for companies looking to get out of weed and feed have been coming from the North Central areas like Michigan, Wisconsin, and Ohio, the "rust belt" I think they have called it. Basically the areas that have been hardest hit by the economy not that we all haven't been hit pretty hard.

We have been looking for people who do not necessarily want to get out of lawn care but want to get out of their own business headaches and not go to work for some type of National Franchise.