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View Full Version : Bidding commercial HOA and condo accounts. Its not a great as you think


PROCUT1
04-26-2009, 04:56 PM
Years ago when i got into condo work, it was a difficult market to crack. I had a couple hundred residential lawns, a couple crews, lots of equipment, and it took me a couple of years pressing the management companies before I got my first invitation to bid.

The management companies were very strict on who they would solicit and allow to bid on a property. It was a pretty closed club of only the few mid to large sized companies competing.

You needed references for other jobs that size, which made it hard for anyone who wasnt already "in"

You needed to provide an equipment list, employee list, and the property managers actually would physically come see it to verify.

You needed higher than normal insurance coverage. You needed a few years experience on large properties.

Overall you needed to prove that you we;re equipped and able to handle this job easily. Nobody would take a chance on a small guy, or a new guy.

If you passed all of that you MAY be invited to bid. You would be bidding against other long term qualified contractors. And there was little price spread in the bids. You won the job based on your references and how good of a salesman you were.

When you got the job, you had it for a long time. The contractors were all pretty equal, all did equally a good job, and all were close in price.


The trend that I saw unfold is that the condo directors started putting pressure on the management companies to trim budgets.

The management companies started taking many many more than the standard 3 bids and they opened up the bidding to anyone who called and asked to bid.

The property manager would then present the board with 10 or so bids with a HUGE price spread and they would make their decision.

I found they started taking the attitude, (Its just grass, its not life or death)

So they started to take chances on less than qualified, less than proven, contractors who bid the job many times at half of what they have been paying. Their attitude was "If he does a good job, we save $20,000 a year, if he sucks, we'll get another guy, its just grass"

So you saw this huge upset in the industry of the big guys losing the work and everyone who mows 20 lawns on the side is now fighting for the "big condo work" so they could live their dream of being a "real contractor"

Now some of the guys who were under equipped did fall on their face. Others did a good job but didnt last too many years because they ran out of money not knowing they're working for a loss. Others lasted a real long time.

Either way, the customer saved tons of money.

The big guys held out and waited for the "little guys over their head" to fail and figured after the wave the work would come back.

When that happened, it wasnt the qualified contractors that the customer went back to.

Even though they paid $50,000 forever to have their place done, now that they hired this guy for $25,000, even though he failed, the customer now is not looking to go back to a qualified guy for 50k.

They put it out for bid and look for the guy who is going to do it for $25,000 like the other guy but not fail.

And this keeps repeating itself. Every year more and more guys wet their pants to get condo or commercial work, so every year the condo and property managers have a new pool of guys to try out.

The job now will always be $25,000. It will never get back up to $50,000 where it belongs.

The managers know they are dealing with eager starry-eyed guys and are able to put the squeeze on. They will even take that $25,000 bid and get the guy to drop $5000 and promise him the job. Most everyone says yes.

The customer will keep trying the cheap guys, and eventually, more often than not, will find a company to do it that cheap, do a good job, and stick around for a few years.

Where you used to see the guys around here that did condo work. It was 3 or 4 companies that had them ALL.

You dont see that anymore. Now most condos are being done by the same guy you would see mowing your neighbors lawn with his pickup and 2 machines.

The condo market is not much different than what everyone is seeing in the residential market. Except the costs of failure are much higher.

Field King
04-26-2009, 08:42 PM
Years ago when i got into condo work, it was a difficult market to crack. I had a couple hundred residential lawns, a couple crews, lots of equipment, and it took me a couple of years pressing the management companies before I got my first invitation to bid.

The management companies were very strict on who they would solicit and allow to bid on a property. It was a pretty closed club of only the few mid to large sized companies competing.

You needed references for other jobs that size, which made it hard for anyone who wasnt already "in"

You needed to provide an equipment list, employee list, and the property managers actually would physically come see it to verify.

You needed higher than normal insurance coverage. You needed a few years experience on large properties.

Overall you needed to prove that you we;re equipped and able to handle this job easily. Nobody would take a chance on a small guy, or a new guy.

If you passed all of that you MAY be invited to bid. You would be bidding against other long term qualified contractors. And there was little price spread in the bids. You won the job based on your references and how good of a salesman you were.

When you got the job, you had it for a long time. The contractors were all pretty equal, all did equally a good job, and all were close in price.


The trend that I saw unfold is that the condo directors started putting pressure on the management companies to trim budgets.

The management companies started taking many many more than the standard 3 bids and they opened up the bidding to anyone who called and asked to bid.

The property manager would then present the board with 10 or so bids with a HUGE price spread and they would make their decision.

I found they started taking the attitude, (Its just grass, its not life or death)

So they started to take chances on less than qualified, less than proven, contractors who bid the job many times at half of what they have been paying. Their attitude was "If he does a good job, we save $20,000 a year, if he sucks, we'll get another guy, its just grass"

So you saw this huge upset in the industry of the big guys losing the work and everyone who mows 20 lawns on the side is now fighting for the "big condo work" so they could live their dream of being a "real contractor"

Now some of the guys who were under equipped did fall on their face. Others did a good job but didnt last too many years because they ran out of money not knowing they're working for a loss. Others lasted a real long time.

Either way, the customer saved tons of money.

The big guys held out and waited for the "little guys over their head" to fail and figured after the wave the work would come back.

When that happened, it wasnt the qualified contractors that the customer went back to.

Even though they paid $50,000 forever to have their place done, now that they hired this guy for $25,000, even though he failed, the customer now is not looking to go back to a qualified guy for 50k.

They put it out for bid and look for the guy who is going to do it for $25,000 like the other guy but not fail.

And this keeps repeating itself. Every year more and more guys wet their pants to get condo or commercial work, so every year the condo and property managers have a new pool of guys to try out.

The job now will always be $25,000. It will never get back up to $50,000 where it belongs.

The managers know they are dealing with eager starry-eyed guys and are able to put the squeeze on. They will even take that $25,000 bid and get the guy to drop $5000 and promise him the job. Most everyone says yes.

The customer will keep trying the cheap guys, and eventually, more often than not, will find a company to do it that cheap, do a good job, and stick around for a few years.

Where you used to see the guys around here that did condo work. It was 3 or 4 companies that had them ALL.

You dont see that anymore. Now most condos are being done by the same guy you would see mowing your neighbors lawn with his pickup and 2 machines.

The condo market is not much different than what everyone is seeing in the residential market. Except the costs of failure are much higher.

I would like to add a perspective from a new lawn service owner! I am in the lawn service to make a few extra bucks in addition to my full time job, I have only advertised to residential customers! In this I have encountered 2 people who have said that they are unhappy with the quality of work being done by their current LCO for their HOA! They asked me if I did those jobs, I replied no as I do not have the equipment or time! Also I have recieved 3 of my 12 residential jobs due to unhappy customers, one did not like the fact his previous service had 3 guys jump out of a truck and blaze his lawn and leave clippings all over the drive and street and two did not like the job teens were doing on their lawn! I also had a call from a guy who complained about the quality of the service he was recieving from his LCO, I went to bid it (they mowed 2 days prior) and I could not believe how nice it looked, it was obvious they were very good at lawn care and I knew I could not do better so I passed knowing he was fishing for a lower price or was just hard to please, that is all just thought I would add how a new guy sees it so far!

hitechlm
04-26-2009, 09:18 PM
its very sad but its true, you hit the nail on head. I have seen, especially in the past couple years these beautiful properties turning into nothing but burnt out grass and weeds. Its starts with them taking bids from every joe blow with a mower doing it for have the price, then joe blow falls on his face like you said. Years later when they go back to the big companies that want twice as much as joe blow was charging the say they need to cut back to get it back to half the price, so they take out the fertilizer apps, the bed edging and the insect and disease, etc. now your mowing nothing but a $hit hole.

nosparkplugs
04-26-2009, 09:33 PM
Yep I experience this first hand each year, I have gained some contracts & lost contracts becuase property management companies & HOA's went with a cheaper bid only to not get the results they wanted for the money. I then get that phone call we all want. The last LCO was the cheapest, but his work was crappy, do you still want the contract. Stick to your business model, produce quality work that is not the cheapest, and respect yourself.

In this economy price point is ALWAYS first, you need lots of LUCK too, in that I mean the incumbent LCO does not hold up to their end of the contract. I do have a select few commercial customers whom are loyal, and for that I am thankful.


Years ago when i got into condo work, it was a difficult market to crack. I had a couple hundred residential lawns, a couple crews, lots of equipment, and it took me a couple of years pressing the management companies before I got my first invitation to bid.

The management companies were very strict on who they would solicit and allow to bid on a property. It was a pretty closed club of only the few mid to large sized companies competing.

You needed references for other jobs that size, which made it hard for anyone who wasnt already "in"

You needed to provide an equipment list, employee list, and the property managers actually would physically come see it to verify.

You needed higher than normal insurance coverage. You needed a few years experience on large properties.

Overall you needed to prove that you we;re equipped and able to handle this job easily. Nobody would take a chance on a small guy, or a new guy.

If you passed all of that you MAY be invited to bid. You would be bidding against other long term qualified contractors. And there was little price spread in the bids. You won the job based on your references and how good of a salesman you were.

When you got the job, you had it for a long time. The contractors were all pretty equal, all did equally a good job, and all were close in price.


The trend that I saw unfold is that the condo directors started putting pressure on the management companies to trim budgets.

The management companies started taking many many more than the standard 3 bids and they opened up the bidding to anyone who called and asked to bid.

The property manager would then present the board with 10 or so bids with a HUGE price spread and they would make their decision.

I found they started taking the attitude, (Its just grass, its not life or death)

So they started to take chances on less than qualified, less than proven, contractors who bid the job many times at half of what they have been paying. Their attitude was "If he does a good job, we save $20,000 a year, if he sucks, we'll get another guy, its just grass"

So you saw this huge upset in the industry of the big guys losing the work and everyone who mows 20 lawns on the side is now fighting for the "big condo work" so they could live their dream of being a "real contractor"

Now some of the guys who were under equipped did fall on their face. Others did a good job but didnt last too many years because they ran out of money not knowing they're working for a loss. Others lasted a real long time.

Either way, the customer saved tons of money.

The big guys held out and waited for the "little guys over their head" to fail and figured after the wave the work would come back.

When that happened, it wasnt the qualified contractors that the customer went back to.

Even though they paid $50,000 forever to have their place done, now that they hired this guy for $25,000, even though he failed, the customer now is not looking to go back to a qualified guy for 50k.

They put it out for bid and look for the guy who is going to do it for $25,000 like the other guy but not fail.

And this keeps repeating itself. Every year more and more guys wet their pants to get condo or commercial work, so every year the condo and property managers have a new pool of guys to try out.

The job now will always be $25,000. It will never get back up to $50,000 where it belongs.

The managers know they are dealing with eager starry-eyed guys and are able to put the squeeze on. They will even take that $25,000 bid and get the guy to drop $5000 and promise him the job. Most everyone says yes.

The customer will keep trying the cheap guys, and eventually, more often than not, will find a company to do it that cheap, do a good job, and stick around for a few years.

Where you used to see the guys around here that did condo work. It was 3 or 4 companies that had them ALL.

You dont see that anymore. Now most condos are being done by the same guy you would see mowing your neighbors lawn with his pickup and 2 machines.

The condo market is not much different than what everyone is seeing in the residential market. Except the costs of failure are much higher.

DennisF
04-26-2009, 10:16 PM
There is a new trend in HOA's here in Florida. Many of them are purchasing their own equipment and hiring a full time employee to do things like mowing the common areas, applying fertilizer, and doing general clean-ups around the club house and recreation areas.

One of the HOA's that went this route was paying an LCO $125,000 per year for mowing alone, plus paying True Green to apply chemicals and fertilizer. They hired a full time employee to do the mowing work and fertilizer apps, and another to maintain the recreation areas (pool, tennis courts, etc). The two employees were hired at $10 per hour and both are former LCO employees. The board of directors of the HOA put out a letter to residents that the association saved over $60,000 the first year.

I know the LCO that lost the account and he said that HOA's are no longer part of his business.

nosparkplugs
04-26-2009, 10:43 PM
Nothing wrong with saving money, But is the HOA now in the grass cutting business? or serving the home owners true needs, granted their saving money. All it will take is one accident, and the HOA will get the snot sued out of themselves, and wish they never got in ground maintenance:). I have a church/school that has ALWAYS/7 years going wanted to purchase it's own equipment, and have the members do the work, but every time their insurance company SAYS HELL NO.

Secondly Florida is a "F" up state anyway it's about in the worst financial shape it's ever been, and has been coined the foreclosure capital many times buy Obama. If your still in business good for you. I cannot stand going to Florida all the Old Farts, I will be down their in August for vacation pumping some deflated American dollars into the Geriatric State





There is a new trend in HOA's here in Florida. Many of them are purchasing their own equipment and hiring a full time employee to do things like mowing the common areas, applying fertilizer, and doing general clean-ups around the club house and recreation areas.

One of the HOA's that went this route was paying an LCO $125,000 per year for mowing alone, plus paying True Green to apply chemicals and fertilizer. They hired a full time employee to do the mowing work and fertilizer apps, and another to maintain the recreation areas (pool, tennis courts, etc). The two employees were hired at $10 per hour and both are former LCO employees. The board of directors of the HOA put out a letter to residents that the association saved over $60,000 the first year.

I know the LCO that lost the account and he said that HOA's are no longer part of his business.

PROCUT1
04-26-2009, 10:56 PM
Im seeing that as well. Condo complexes are starting to bring a lot of things in house to save money. They are getting rid of the management company and setting up their own office. They are buying lawn equipment and having the maintenance people that they already employ do the work. Same with snow. As much as it sucks to say. It does make sense in a lot of ways.

Why pay a lawn company if you already have full time maintenance people with time in their schedule. It kinda makes sense to divert them to lawn duty a day a week.

Same with snow. A complex can easily pay $50,000 a season for snow or more.
They already have maintenance trucks. Add a plow, use your own people and when it snows divert them to snow duty and then back to whatever else they do.

Not the answer anyone on a lawn forum wants to hear. But looking at it from the other side, I can see why a lot of complexes are going that route.

Other types of properties such as townhouse communities where the owners are 100% responsible and the HOA doesnt do building repair and maintenance will probably always contract out their mowing and snow.

nosparkplugs
04-26-2009, 11:03 PM
I have a new contract with an apartment complex that purchased their own Home Depot ZTR's weedeaters etc the employee's managed to blow up the ZTR's, and complained enough about doing it, and finally the Owner & manager of the complex realized it was a mistake. When I took it over it looked like a foreclosure.

This is the best thing going here in Memphis becuase it's breaking the contracts with current LCO's, and their rebidding it out after their done wasting money trying to save money. Yes i have been on the looseing end of this trend too.


Im seeing that as well. Condo complexes are starting to bring a lot of things in house to save money. They are getting rid of the management company and setting up their own office. They are buying lawn equipment and having the maintenance people that they already employ do the work. Same with snow. As much as it sucks to say. It does make sense in a lot of ways.

Why pay a lawn company if you already have full time maintenance people with time in their schedule. It kinda makes sense to divert them to lawn duty a day a week.

Same with snow. A complex can easily pay $50,000 a season for snow or more.
They already have maintenance trucks. Add a plow, use your own people and when it snows divert them to snow duty and then back to whatever else they do.

Not the answer anyone on a lawn forum wants to hear. But looking at it from the other side, I can see why a lot of complexes are going that route.

Other types of properties such as townhouse communities where the owners are 100% responsible and the HOA doesnt do building repair and maintenance will probably always contract out their mowing and snow.

DennisF
04-26-2009, 11:12 PM
Nothing wrong with saving money, But is the HOA now in the grass cutting business? or serving the home owners true needs, granted their saving money. All it will take is one accident, and the HOA will get the snot sued out of themselves, and wish they never got in ground maintenance:). I have a church/school that has ALWAYS/7 years going wanted to purchase it's own equipment, and have the members do the work, but every time their insurance company SAYS HELL NO.

Secondly Florida is a "F" up state anyway it's about in the worst financial shape it's ever been, and has been coined the foreclosure capital many times buy Obama. If your still in business good for you. I cannot stand going to Florida all the Old Farts, I will be down their in August for vacation pumping some deflated American dollars into the Geriatric State

If you think about it...it makes sense for an HOA to maintain the common areas. They already maintain the roads, entrances, pools, tennis courts, club house etc, so doing the mowing is the next step. They already pay for liability insurance on all of the common areas, so all that is needed is to have their insurance carrier add lawn maintenance to the coverage.

Look at it this way. Instead of outsourcing work...they are in-sourcing work and saving money at the same time.

ed2hess
04-26-2009, 11:16 PM
A lot of commerical are starting to bring stuff in house. A rather large Lexus dealer has two of his guys do the lawn. Then they wash cars the rest of the time. Large HOA has a three man team that works for them 24/7. Both of these properties look just as good and ones done by LCO. And some resturant and hotels let their employees do the work on off time. Some of those don't work so well but they do save money.

lifetree
04-26-2009, 11:18 PM
I have a new contract with an apartment complex that purchased their own Home Depot ZTR's weedeaters etc the employee's managed to blow up the ZTR's, and complained enough about doing it, and finally the Owner & manager of the complex realized it was a mistake. ...

They might have been able to make a go of it if they had bought commercial equipment ... the fact that they bought homeowner equipment is the mistake that they made !!

BCL Services
04-26-2009, 11:28 PM
Secondly Florida is a "F" up state anyway it's about in the worst financial shape it's ever been, and has been coined the foreclosure capital many times buy Obama. If your still in business good for you. I cannot stand going to Florida all the Old Farts, I will be down their in August for vacation pumping some deflated American dollars into the Geriatric State


Oh and Memphis, Tn is such a beautiful locale.

Think Green
04-26-2009, 11:30 PM
We bid a Ruby Tuesday's last week here in my city. The previous LCO, we know him real well, as he installs sprinkler systems and runs a small crew of men to do mowings commercially. This new manager calls us make a complete new contract, one that is not dedicated from Corporate Office to maintain their property. I asked alot of questions about why this other LCO either didn't come back or why he lost this account. With no response other than he quit because of odd reasons, is not leaving a good taste in my mouth, and the big red flags are raising everywhere. The property has 10,000 sq.ft. of turf (Hybrid Bermuda), tons of edging and line-trimming around all of the odd shaped parking and bed areas. The turf is scattered out over an acre and a half (Push-mowing and bagging with a 21" mower--Toro 2-cycler remulcher). The beds are well kept and just a might weedy. The mulch is faded red cypress. The shrubbery is out of shape and paper is everywhere. Winter weeds are everywhere, tall fescue is 24 inches tall in places, onion is out of control. The sprinkler system is the only thing that looks intact as it is buried. LOL!
The topic of several bids came up under his breath every time we asked him pertinant questions about scheduling and maintenance. So, we bid this thing for 52 weeks a year starting in April and will contract it to have a living person on that property each week to do any type of maintenance for the season. It came out to around 7,000.00 for the year. A little over 500.00 a month for the full monty! Basically, scheduled out to 135.00 a week before tax's. I told him that we do several Dr. Clinics and will offer references upon request.
A week has passed and the thing is done already, as someone has outbid this thing or as usual, they passed along this bid with others to the same LCO in hopes for him to lower his bid. Last year, we bid on 5 banks including the mother branch. The V.P. stated that this contract will be an closed bid and the board will decide who they want to view the other contracts. Their expenses would have been 16,000 for the year.
Bid another HOA and Condo complex the same season, all with new board members trying to lower their cost of doing business. This same condo complex called us 2 years previous to bid under a different manager. They nearly fainted when we offered them a bid for 15,000 the whole year.
A Doctor, years ago fired us after 16 years of faithful service mowing his 2 acre lawn, and doing the whole 9 yards and putting up with doberman pinschers, for a measly 100.00 a week. He said he was taken advantage of all those years, and he hired 4 hispanic men and bought his own equipment for less than he was paying us for a year. Yes, he saved money, but what about all the hassle and breakdowns he paid for!!!! He has someone else doing his lawn and he has added on grass........?Who Cares!
I agree with all that the price of labor and quality is thrown out the window with pride.
It is no secret that the higher dollar accounts are slowly reducing their expenses allowing for other sectors of bidding than before. This gives way for more bids from outsiders that are not equipped. To gain properties like this is a notch in anyone's bed post but the down side to loosing money is another notch. It is coming ever clearer that some of these companies are not looking into certified inviduals with insurance, all they care about is cutting the grass.......spraying the weeds.
I think that any account is fair game for any LCO to win, but if they do not do it with making money in mind, then they are like the other 8 LCO's last year that went under because of the financial hardship associated with fuel spike's and equipment costs.
We are not any better than the next guy. We have been doing this for many-many years, and find ourselves competing with properties that were once valued in the 1,000's per year, and now finding out they are worth 100's..

It is sad to say the least.................but somehow we still go on!

topsites
04-26-2009, 11:38 PM
Yes, isn't it lovely?

nosparkplugs
04-26-2009, 11:53 PM
were featured on 48hrs all the time :) & Shelby county has the higest number of concealed handgun permits in TN sure were much better off

Oh and Memphis, Tn is such a beautiful locale.

lilweeds
04-27-2009, 08:18 PM
Years ago when i got into condo work, it was a difficult market to crack. I had a couple hundred residential lawns, a couple crews, lots of equipment, and it took me a couple of years pressing the management companies before I got my first invitation to bid.


Pro Cut

I appreciate some of your comments. I'm sure you know alot about the business and the failing of one. Also I know you been there done that on a lot of issues. But really can we not bring the board down.

I have several commercial properties. Some I have out bid another company. Many I am doing for a bit less because I still do all the mowing by myself. Many of the companies I bid against are much larger, and I'm still only a few dollars less, sometimes more.

The commercial market is tight. Hell every market is tight right now and we all know it. We really don't need someone getting us down. That's all!

qps
04-27-2009, 09:24 PM
Pro Cut

I appreciate some of your comments. I'm sure you know alot about the business and the failing of one. Also I know you been there done that on a lot of issues. But really can we not bring the board down.

I have several commercial properties. Some I have out bid another company. Many I am doing for a bit less because I still do all the mowing by myself. Many of the companies I bid against are much larger, and I'm still only a few dollars less, sometimes more.

The commercial market is tight. Hell every market is tight right now and we all know it. We really don't need someone getting us down. That's all!

I disagree, his statement is right on the money, as a 15 year owner I have worked with 5 property management companies, in the last year a property I have serviced for 10 years was underbid by the new presidents buddie by
20K a year, mine and the second bid were compairable, his was cut throat, as he also is a nurse and works only weekends, has no shop, and sub's out all the other services, we offered full service, licensed applicator on site, own all of our equipment and sub out nothing...what I believe he is saying is that its not all cut and dried and not always everything is above the table on large HOA and Condo properties....alot if not what you know but who you know....sorry if that seems negative...but it's a statement from experience...

nnj18
04-27-2009, 09:48 PM
years ago when i got into condo work, it was a difficult market to crack. I had a couple hundred residential lawns, a couple crews, lots of equipment, and it took me a couple of years pressing the management companies before i got my first invitation to bid.

The management companies were very strict on who they would solicit and allow to bid on a property. It was a pretty closed club of only the few mid to large sized companies competing.

You needed references for other jobs that size, which made it hard for anyone who wasnt already "in"

you needed to provide an equipment list, employee list, and the property managers actually would physically come see it to verify.

You needed higher than normal insurance coverage. You needed a few years experience on large properties.

Overall you needed to prove that you we;re equipped and able to handle this job easily. Nobody would take a chance on a small guy, or a new guy.

If you passed all of that you may be invited to bid. You would be bidding against other long term qualified contractors. And there was little price spread in the bids. You won the job based on your references and how good of a salesman you were.

When you got the job, you had it for a long time. The contractors were all pretty equal, all did equally a good job, and all were close in price.


The trend that i saw unfold is that the condo directors started putting pressure on the management companies to trim budgets.

The management companies started taking many many more than the standard 3 bids and they opened up the bidding to anyone who called and asked to bid.

The property manager would then present the board with 10 or so bids with a huge price spread and they would make their decision.

I found they started taking the attitude, (its just grass, its not life or death)

so they started to take chances on less than qualified, less than proven, contractors who bid the job many times at half of what they have been paying. Their attitude was "if he does a good job, we save $20,000 a year, if he sucks, we'll get another guy, its just grass"

so you saw this huge upset in the industry of the big guys losing the work and everyone who mows 20 lawns on the side is now fighting for the "big condo work" so they could live their dream of being a "real contractor"

now some of the guys who were under equipped did fall on their face. Others did a good job but didnt last too many years because they ran out of money not knowing they're working for a loss. Others lasted a real long time.

Either way, the customer saved tons of money.

The big guys held out and waited for the "little guys over their head" to fail and figured after the wave the work would come back.

When that happened, it wasnt the qualified contractors that the customer went back to.

Even though they paid $50,000 forever to have their place done, now that they hired this guy for $25,000, even though he failed, the customer now is not looking to go back to a qualified guy for 50k.

They put it out for bid and look for the guy who is going to do it for $25,000 like the other guy but not fail.

And this keeps repeating itself. Every year more and more guys wet their pants to get condo or commercial work, so every year the condo and property managers have a new pool of guys to try out.

The job now will always be $25,000. It will never get back up to $50,000 where it belongs.

The managers know they are dealing with eager starry-eyed guys and are able to put the squeeze on. They will even take that $25,000 bid and get the guy to drop $5000 and promise him the job. Most everyone says yes.

The customer will keep trying the cheap guys, and eventually, more often than not, will find a company to do it that cheap, do a good job, and stick around for a few years.

Where you used to see the guys around here that did condo work. It was 3 or 4 companies that had them all.

You dont see that anymore. Now most condos are being done by the same guy you would see mowing your neighbors lawn with his pickup and 2 machines.

The condo market is not much different than what everyone is seeing in the residential market. Except the costs of failure are much higher.



awesome post man!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! !!!!!!!!!!!!!!!!

kaferhaus
04-27-2009, 09:51 PM
I disagree, his statement is right on the money, as a 15 year owner I have worked with 5 property management companies, in the last year a property I have serviced for 10 years was underbid by the new presidents buddie by
20K a year, mine and the second bid were compairable, his was cut throat, as he also is a nurse and works only weekends, has no shop, and sub's out all the other services, we offered full service, licensed applicator on site, own all of our equipment and sub out nothing...what I believe he is saying is that its not all cut and dried and not always everything is above the table on large HOA and Condo properties....alot if not what you know but who you know....sorry if that seems negative...but it's a statement from experience...

Only a few of the MANY reasons we won't even bid those jobs, to many "bosses" no matter what the contract says. Ego-manical board members and most wanting first class performance for a fraction of what that costs to provide. Down here it's been near impossible to make a profit working on these accounts and "newbies" continue to rush in to bid them and end up either getting fired or realizing they're losing their asses and quitting.

The aggravation alone is worth a 10% premium above what the job should pay under ordianary circumstances.

The newbies are welcome to them. It puts many of them out of business which is good for the rest of us.

qps
04-27-2009, 09:59 PM
Only a few of the MANY reasons we won't even bid those jobs, to many "bosses" no matter what the contract says. Ego-manical board members and most wanting first class performance for a fraction of what that costs to provide. Down here it's been near impossible to make a profit working on these accounts and "newbies" continue to rush in to bid them and end up either getting fired or realizing they're losing their asses and quitting.

The aggravation alone is worth a 10% premium above what the job should pay under ordianary circumstances.

The newbies are welcome to them. It puts many of them out of business which is good for the rest of us.

True...the 10 year account was a blessing due to the past president and board, they cared about the property and how it looked, health issues forced him out with others following due to the new presidents micro managing tactic's, he actually accused me in a board meeting to the the property manager of paying off him and or his boss...only because there was no way I could have kept the contract for 10 years without doing something under the table. If said in my presence I would have.....well I don't know what exactly I would have done but my first reaction would be to bit@h slap him silly...not the smartest thing to do but I would be careful of questioning a mans integrity without really knowing the man....

topsites
04-27-2009, 10:29 PM
For what it's worth I'm on Lilweeds side, matter of fact I had a whole page long
rant all typed out when I decided to just not say anything and I edited the
whole thing back to a simple "Yes, isn't it lovely?"

And I realize it could happen to any one of us, but it's just not constructive.

Yater
04-27-2009, 10:45 PM
Around here, these properties are good money for a solo or small operation. I think some operations are too big or have too much overhead to affordably take such jobs. It's a free market....fill your own niche (whatever it is).

Lawnut101
04-27-2009, 11:41 PM
Yeah all those jobs go for pretty dang cheap around here. I am sticking with residentials, and high end commercial work. I am trying to get one condo/HOA, but they don't bid out their stuff every year. They are just unsatisfied with their current service, because the company had a change of ownership. Otherwise, I don't really like bidding them.

topsites
04-27-2009, 11:57 PM
I don't really like bidding them.

Now I will say, whether constructive or not, I don't either.

They expect me to meet their terms, that's the first downer but it's a big downer, real big.
It's not even about asking for weekly service or that things be kept up well or
to certain standards, I could likely handle as much.

And they want this and that, fine, not really, but all right.

But when they start to demand workmen's compensation from a solo operation,
that's just a little more than I can swallow yet it still doesn't end there.

No, it's one thing after the next, it goes on and on about how exactly I am to perform.
These guys hand me a folder filled with sheets of qualifications, a big list more than several pages long.

And I guess that might be all right for certain folks, say if one likes everything all neatly spelled out.
But as for me, by then I wonder why am I even in business?

Lawnut101
04-28-2009, 12:12 AM
Now I will say, whether constructive or not, I don't either.

They expect me to meet their terms, that's the first downer but it's a big downer, real big.
It's not even about asking for weekly service or that things be kept up well or
to certain standards, I could likely handle as much.

And they want this and that, fine, not really, but all right.

But when they start to demand workmen's compensation from a solo operation,
that's just a little more than I can swallow yet it still doesn't end there.

No, it's one thing after the next, it goes on and on about how exactly I am to perform.
These guys hand me a folder filled with sheets of qualifications, a big list more than several pages long.

And I guess that might be all right for certain folks, say if one likes everything all neatly spelled out.
But as for me, by then I wonder why am I even in business?

Lol, well I haven't come across one like that yet. But one that sent me info had a part that said "The mower deck shall not be bigger than ______" That part was scribble out though, which I thought was pretty funny. Must have turned away too many companies with bigger mowers.

big acres
04-28-2009, 12:37 AM
Great post and insightful observations. Three HOAs I just signed we won as the HIGHEST bidder, though we missed many opportunities with HOAs that gave their admittedly crappy vendor another chance because of low price.

Commercial is tight as ever, and with the gloom and doom all over the news the last thing people want is to come home after work to see their own yard looking shoddy -this spells true defeat for them. I see HOAs as one of the most secure sectors right now.

Maybe it's a regional thing, but managers here still sign as many vendor contracts as they do their own, and good ones understand that you get what you pay for. Name another industry involing a fleet of equipment which has regressed 10-20% in pricing and maintained qaulity? It cannot be done for the long term.

I have had some commercial accounts who wanted us back, but brought the mowing in-house mainly not to save money, but to save someone's job. They will call us when times are better, and I admire their honesty, BUT for every account who says "we just brought mowing in-house to save money", I hear from one that says "we tried it in-house and it didn't work".

For the HOAs who think if they own their own equipment all they pay is $15 per hour for the labor -good luck. For the LCO who underbids by $20k - good luck. For the guys on here who have given in to the belief that they can only "live by price"... you will die by price alone.

This is a temporary situation, but only the strong will survive. There is a LS member with a great quote by his avitar... "The bitter taste of poor qaulity lingers long after the sweet taste of low price fades"... or something to that affect. This is true. BE THE BEST, CAST A WIDE NET (INVEST IN SALES), AND YOU WILL CATCH FISH WHO WILL PAY FOR STELLAR SERVICE!

ps. To the poster who wrote about a Dr. who felt "taken advantage of" for paying $100 for a two acre cut over sixteen years... I hope you told him you "felt taken advantage of" at every encounter with the Health care system of which he belongs.

Keep your chins up, be professional, and do not become the lowballer that you once loathed.

qps
04-28-2009, 07:37 AM
Now I will say, whether constructive or not, I don't either.

They expect me to meet their terms, that's the first downer but it's a big downer, real big.
It's not even about asking for weekly service or that things be kept up well or
to certain standards, I could likely handle as much.

And they want this and that, fine, not really, but all right.

But when they start to demand workmen's compensation from a solo operation,
that's just a little more than I can swallow yet it still doesn't end there.

No, it's one thing after the next, it goes on and on about how exactly I am to perform.
These guys hand me a folder filled with sheets of qualifications, a big list more than several pages long.

And I guess that might be all right for certain folks, say if one likes everything all neatly spelled out.
But as for me, by then I wonder why am I even in business?

you just contradicted everything you said in your last post??? then ask why am I even in business...:confused: I guess I chose not to sit on the fence post

delphied
04-28-2009, 08:39 AM
There is a new trend in HOA's here in Florida. Many of them are purchasing their own equipment and hiring a full time employee to do things like mowing the common areas, applying fertilizer, and doing general clean-ups around the club house and recreation areas.

One of the HOA's that went this route was paying an LCO $125,000 per year for mowing alone, plus paying True Green to apply chemicals and fertilizer. They hired a full time employee to do the mowing work and fertilizer apps, and another to maintain the recreation areas (pool, tennis courts, etc). The two employees were hired at $10 per hour and both are former LCO employees. The board of directors of the HOA put out a letter to residents that the association saved over $60,000 the first year.

I know the LCO that lost the account and he said that HOA's are no longer part of his business.

The key here is 10/hour. That is considered a good wage across America. Unbelievable. I will hop the next westbound freight train and see America from an open boxcar before I will do this work for 10/hour. The really funny part is that a majority of Americans like this situation.

justcamman
05-03-2009, 09:24 PM
my take is this. i am a 1 man operation with a helper on occasion. I have 2 patio home complexes. One of which I lost 2 years ago to True Green. Needless to say I am back cutting the property again. I do quality work. There are many lco that think since they are big they are the best. This is not the case. I can not handle all the accounts they might but all of my accounts know who the man is and if questions problems or complaints I am the one to fix them. If they have a special request I make sure they are done right. There is something said for a man who does his own work. I will never be rich but I know the quality of work my name is on. I have had my other patio home complex for 5 years and the one I got back i had for 2 years lost out and got back this year.....Hail to the little man!!!!I love my BAD BOY by the way

PROCUT1
05-03-2009, 09:34 PM
Very good point.

There is a job for every size company. And a company for every size job.

theturfboss
05-03-2009, 10:21 PM
I am one of those little guys who got a little bigger. Not large by any means... We have had the lawn & landscape maintenance contract on a local HOA for the past 7 years. It was price well and we made our target profit on the work. Last year, the incoming board president (who thinks this job will put him next in line for the presidency) wanted to "take a closer look" at the work. I received his email in the middle of weekly emails from the homeowners that want to comment on how nice the place looks. He had me re-write all the specs that we abide by and write some "prescription" services for the turf and landscape that we had been performing over the past years. He then sent our specs out to bid. Needless to say we lost the contract to another LCO that was operated by 3 high school kids. The advertise about their experience, professional grade service, and being experts in this field. How does a property manager or HOA see the truth in advertising in this? After some investigation we found the bid was 40% less than ours, while all the others were slightly higher. Are they making any money? Who knows. I cant at their price, but they operate out of their parents garages, have no employees or payroll taxes, and I am only assuming as a high schooler, they do not have to make as much as me or my employees that live in the world.
Something here is wrong...How so called property mangers or HOA boards actually think they are comparing apples to apples? Its been said on this thread a few times, but I think due to the high number of LCOs (full time, part time, legit, not legit, solos, minins, mediums, and grandes) have taken the price down so low in some cases that no one can make any money at it.

NOT to hijack the thread, but what if we had some sort of regulation in lawn mowing. You know, similar to how the licensing and regulation works to become a certified applicator. For those of us who operate a true business and have the pesticide licensing, we know that this is no big deal. What if there was regulation that required every one to just insurance? Pretty simple, but I bet it culls more than a few. What if we were required to pay taxes? Oh wait, some of us do. Maybe a basic license, with a little training on safety or something. I am not one to preach regulation, but I wonder if it would help to level the playing field. When a company gets to big and has monopoly on the market, the government steps in. You would think they would be interested in the millions of dollars that change hands for mowing that's not accounted for. Any thoughts?

ALC-GregH
05-04-2009, 08:53 AM
You would just pay more in fees or other stuff. Keep the government out or we'll ALL be paying more to own and operate a business. After all is said and done, you'll still have the same lowballers or people that DON'T pay what they're suppose to pay. In turn forcing all the legit guys to pay more fees and crap. Just because there's a type of registration and license fee to pay doesn't mean they (lowballer, illegal or other) will pay it. Think of it this way. Do you believe that every person out there that does plumbing or electrical is licensed? Do you think the guys that are licensed ***** about every Tom Dick and Harry doing repairs? I doubt it, if anything they probably ***** about them paying all the licensing fees and stuff when the other guys don't have a license.