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View Full Version : Biggest threat to the industry? Illegals, part timers or Big multiple crew LCO's?


HenryB
02-27-2010, 10:57 AM
To me undoubtley the most dangerous and underpriced are the big LCO's. I speculate they are more concerned with being the big shot and not watching their bottom line. Often the illegals and part timers do the work themselves therefore price a bit higher. On a side note often the bigshot LCO's are often young; not always some younger guys do a a great job pricing.

The-Other-Side
02-27-2010, 11:05 AM
I have had a problem with some of the big LCO's because they run multiple 3 or 4 man crews that can do massive amounts of volume. Therefore some of them charge a pretty low price but can still make money because of how much they do. They also still provide some pretty good quality as well. To customers they are a great deal.

I'm not say all of the large lco's run like this. There have just been a few around me that I know of. They just out bid everybody else. I cannot really be mad because if I want to I could run things the same way. I have chosen a different plan.

Schuley
02-27-2010, 11:14 AM
Its comming from everywhere by me.... usually its the little guys or illegals that I lose work to, (im also little, but not a scab) But this year its been 1 particular big timer lowballing everyone to get the work, i've heard rumors of some problems financially and that to me seems like the first sign of desperation before they fold. Lowball everyone because more work means more money right!!?? usually wrong....

ALC-GregH
02-27-2010, 11:25 AM
Lowball everyone because more work means more money right!!?? usually wrong....
LOL, your SO right. I'll never lowball. Either the customer wants me to do it for the price I quote or they don't. I didn't open a business to work for nothing. I'm making the same money I was when working for "the man" only I work 1/3 the hours!

mowerbrad
02-27-2010, 12:38 PM
I think any "company" that lowballs is the big threat to the industry. I don't care if the company is big, small, legal or not...the lowballing strategy that some of the companies are taking is what is hurting the industry. For instance, if I price 10 lawns at $30 each and then have some other company come through and price all those same lawns at $20 each, then people are going to get into the mind-set that the price for lawn care should be really cheap. If I priced all my properties at $20, I couldn't make any money and I'd end up going out of business. But if prices stayed in a similar "zone", then customers may realize the true cost of lawn care and not complain about my price because so-and-so can do it for half the price.

topsites
02-27-2010, 12:58 PM
I just ran into this crap today, someone asked me if I had a crew but it was the way it was
said where I caught the real meaning: It would be cheaper that way...
I didn't say anything but Whatever!

Because I didn't feel like explaining it at the time but I don't see how a crew makes a lick of a difference,
if a job takes 10 hours then it's 10 hours of labor that have to be covered whether I do it by myself
in 2 days or if I bring 4 helpers and we knock it out in a few hours it's still 10 hours of labor...

And some might say but the owner always gets paid more, and I say that's because I don't sit around lol
But it really doesn't matter because either way the price of the job doesn't change any.

At the auto shop it costs $100 to mount 4 tires on my car, doesn't matter how many mechanics actually work on it...
Anyhow...

On another note I'm guessing the quote I gave earlier didn't sit too well, but tough luck I'm not lowering
my price if I'm by myself vs. someone's crew, let them bring in their 10 helpers and bust it out for less.

White Gardens
02-27-2010, 01:04 PM
I was talking to another scaper in the area about these issues.

I think that the biggest problem is with any green-industry services is that there is no set "rules" or guide lines for the industry.

How are we supposed to move forward and charge more with inflation when people are still charging the same price for services from the early 90's.

I think that's why I haven't pushed the mowing side of the biz. Mowing accounts come and go, and once you invest in the equipment then you need to sustain a certain level of business to sustain your over-head.

wingetlawncare
02-27-2010, 01:19 PM
I'm new to the industry so I can't talk from years of experience but in my area it is the big LCO. Everyone I have talked with said they will come down to the price you say.

HenryB
02-27-2010, 01:27 PM
This is why I started this thread. Bigger LCO's are always complaining about illegals and part timers. When ironically they're the lowest priced ,least profitable operation. It's very hard if not impossible to get 200 or more good paying profitable customers in such a competitive field; hence they give really cheap prices. Often if they kept their 80 or 100 best customers, got rid of all the excess trucks, workers, toys and crap they'd make more money and actually have a life.

silverado212
02-27-2010, 01:39 PM
Around Cincinnati I have noticed it to be the lowballers. I see these guys with no overhead ie: INS, WC, TAXES offering a $35 yard to do it for $20. My equipment is paid for and I don't have the expense of a shop and home, just run out of my house. I do pay taxes, ins., and looking into WC. Flagged a bunch of these guys on CL last year just for fun and one replied "we are legit, we are bonded." I laughed. He was advertising $20 max on cuts. He is not registered with the state of OH.

W.L.M.
02-27-2010, 03:30 PM
I will do you one better, in my area we have a huge multi crew outfit that also happens to be illegal. They have 50 some trucks and the address the buisness is registered to is in one of the worst apartment complexes in town. The run straight illegal aliens for employees, they dont even ride in the cab of the truck they pull up to the account 1 white guy driving the truck he opens the enclosed trailer and 4 or 5 illegals pour out on mowers and trimmers. This company has I would say 80% of all the maintenance work in this town because their prices are so low the bids usually come in at about half what everyone else is.

indy2tall
02-27-2010, 03:39 PM
I would say, of the three, illegals are the greatest threat but quite frankly none of them are a serious threat when compared to our politicians and way too big government. I have a friend who is a part owner of a mower manufacturing business so I have first hand knowledge of all the utterly ridiculous regulations big government continually burdens them with. All of them inevitably drive up the cost of the products they build. These costs all get passed onto us and squeeze our bottom line. Many bigger ZTR's are edging up to and over 10000, commercially zoned real estate costs continually rising, etc...., it goes on and on. The huge LCO's rarely if ever even touch residential yards in this area so around Indianapolis they don't seem to be taking a bigger market share. Part timers and laid off guys starting out are certainly more prevalent right now because of the economy but they will dwindle when the economy improves. Next to politicians I would agree with silverado212 that legal residents who are lowballers are a bigger problem but they will always be around so I really don't worry about them. I am a mowing contractor not a landscaper so my comments are in that context. I price somewhere in the middle of the price spread when a customer starts out and I raise my prices between 3 and 5 percent EVERY year depending on the property. This increase keeps me up with inflation and if I want to make more money per customer I just have to figure out a way to become more efficient. I have found my customers all understand that costs go up each year. I always do an excellent job and have never lost a client due to my price increases.

indy2tall
02-27-2010, 03:48 PM
I will do you one better, in my area we have a huge multi crew outfit that also happens to be illegal. They have 50 some trucks and the address the buisness is registered to is in one of the worst apartment complexes in town. The run straight illegal aliens for employees, they dont even ride in the cab of the truck they pull up to the account 1 white guy driving the truck he opens the enclosed trailer and 4 or 5 illegals pour out on mowers and trimmers. This company has I would say 80% of all the maintenance work in this town because their prices are so low the bids usually come in at about half what everyone else is.

They have to be violating numerous zoning laws by running a business that big from an apartment complex, turn the dirtbags in. If they are keeping all these trucks elsewhere find out where and check the zoning, chances are they are illegal there too.

topsites
02-27-2010, 03:59 PM
I would say, of the three, illegals are the greatest threat but quite frankly none of them are a serious threat when compared to our politicians and way too big government. I have a friend who is a part owner of a mower manufacturing business so I have first hand knowledge of all the utterly ridiculous regulations big government continually burdens them with. All of them inevitably drive up the cost of the products they build. These costs all get passed onto us and squeeze our bottom line. Many bigger ZTR's are edging up to and over 10000, commercially zoned real estate costs continually rising, etc...., it goes on and on.

You know what I see too, thou?
I'm not entirely innocent, if nothing else one thing leads to another.

But...
Young adults who grew up while their parents spoiled them as children, coming into this world
with unrealistic expectations and basically wanting everything handed to them.

Refusing to work for less than ungodly amounts for what amounts to basically light agricultural and
menial labor, in short a false pride so built up in themselves that they can't, will not work for a day's wage.
That also drives up the price of things...

The demand is high as ever, so in my book the supply end must be low, not the service end, the production side.
Flood this market with a slew of products and what happens to the prices?
If they sold one Ztr for every ten that got made, what choice would exist?

But nobody's making it, there aren't enough raw materials to produce on the one end,
just the other day I heard copper and steel being referred to as "precious metals."
Don't get me wrong, they are not as abundant as they once were, but rare?
So you got the price of raw materials going sky high...

Dang, maybe I should have got into steel mining...
Anyhow...

Then there's not enough products rolling off the line, that results in high prices at the retail end,
meanwhile nobody's got the need for employees who don't want to work, this results in unemployment
and a whole group of folks don't got no money (never mind money to make any purchases) and I think
that about covers where one can easily see the whole mess we done got ourselves into.

HenryB
03-14-2010, 11:33 AM
So far lost 4 accounts this season. All to very big multiple crew LCO's. One guy I know so I asked why so cheap? (he cut my bid in half:dizzy:). He told me he's got to keep his guys busy. I asked what about having to make money? On a side note a Spanish guy, with his own company, I bumped into in Lesco told me I should get my prices up because I do really nice work:confused:. I'm convinced the goal of most big LCO's is to brag about crews, trucks etc not to make money.

MOW ED
03-14-2010, 11:49 AM
I read someone above said there are no rules, how can there be rules in the mowing part of the business? To have rules you need control and that usually means government. Plumbers have testing, electricians have testing, and the list goes on but the only part of our business that is regulated is the applications. There you need certs and licenses. It still doesn't prevent you from pricing however you want.

Really just about anyone can mow a lawn and there are customers for all types of mowers. The lowballers will find customers that like lowballers. Many people are price driven and that is there option. I am not low priced but I found my niche with my business. I turned a profit 13 out of 15 years with years 1 and 2 being light. I am a legal busines but I am not a "full timer" as some may call it. My rates are in line with the guys that run similar operations as I have.
Who is the threat? We all are in some respects because we have great issues in organizing. It is very difficult to get a bunch of us together (short of pizzin and moanin here) to talk about real change in this industry. I still think that we will never be able to regulate "mowing lawn". Its something everyone can do and this is still America where anyone can start a business. The best we can do is be persistent in our own business inspite of the percieved obstacles in our path. Good discussion.

Triplex
03-14-2010, 01:37 PM
I hate to see all these huge LCO's. Landscaping is one of the last things left where a smart, hardworking kid with no degree has a shot at a comfortable, middle-class life. Soon mowing will be a dead-end job instead of a path to becoming a successful small business owner, and some MBA will be running things instead of a guy who started out with a string trimmer.

topsites
03-14-2010, 01:48 PM
"we are legit, we are bonded."

I think that nails the problem, right along with the saying of "I've been doing this for xxx years.!"
Why, because EVERYBODY says that...
Speaking strictly in terms of the odds, something can't be right.

Thus it is my opinion that it is the dishonest business owner who hurts the Industry, be they big or small.

chris@perfectlawncare
03-14-2010, 02:00 PM
I hate to see all these huge LCO's. Landscaping is one of the last things left where a smart, hardworking kid with no degree has a shot at a comfortable, middle-class life. Soon mowing will be a dead-end job instead of a path to becoming a successful small business owner, and some MBA will be running things instead of a guy who started out with a string trimmer. I feel like mowing grass is a dead end job if you don't have your own company.
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ryde307
03-14-2010, 03:55 PM
I see alot of people complaingin about the bigger companies. I understand what your saying but for discussion reasons I will play the other side because in our area the problem is not really the big companies.
I am in an area where there is alot of money and a good amount of work . The real problem is part timers and people who are laid off or out of work or just anyone trying to make some extra "easy money".
We are in an industry that it honestly does not take alot of skill to get into. For a few 1000$ it is pretty easy to pass out 1000 fliers say your a business and go get 10-20 lawns to make some ok money. So everyone does it. I cant say I really blam them. We can all sit and complain but it isnt goign to do any good its just the nature of the industry we are in. Hell if I was laid off and had to oppourtunity to keep making my payments by mowing a few yards I would do it wouldnt you? I am not saying this is right believe me I wish everyone was legal and had to charge what we do to make a profit but they don't and thats something that is never going to change.
As for the big LCOS around here they are close on proce on some larger commercial they are cheaper but alot of them can be. They are efficient and have experiance. I agree some bid stuff cheap to get large accounts to market themselves oh we do so and so. Someone also made a comment that one told them they bid it to keep there guys working. You see this alot right now in the construction industry. The thing is work will come back and the economy will come around if the bigger companies lay off alot of employees odds are they are going to move on and find other jobs. This is now going to cost the original companies 1000's to rehire and retrain new hopefully good employees. So if they can bid work at a price they dont really lose money but dont make much either then they will do that to keep there guys working because IF they make it through all of this then they will be set up for larger growth and prfits when the work comes back around.
As for illegals we really dont have a huge issue with it around here or atleast that I see.
All of them are bad for us. But things are somewhatbad all over. The way I see it we can complain about it and probably get nowhere or we can just keep working pricing things right so that we make money and hope for the best.

SuperiorService.110mb.com
03-14-2010, 04:29 PM
I've only been on this site for a few days now. I've seen this same conversation about 5 times, lowballers and big companies. Most of the people on this site have a small 1-2 man crew it seems and have been in buisness for less than 5 years. I've been around since 1991 and was a big compnany in FL till 2008. I ran one crew but I had 5 really good guys and worked 7 days a week from before sun rise to after sun set and was making less than I was back in 2000. Not becuse of the size crew but becuse more and more people where starting to cut grass and do other maintanance crap. You guys talk about the cost of insurance and taxes and you pay then and they don't, that stuff is cheep and the more you make the more your taxes are. Everyday there are hundreds of people that start a lawn service becuse they have a mower and they make more money then a normal job so they work for less becuse they are still making more than their 9-5. I guess what I'm really trying to say is most of you are new to the buisness, making less or losing work has been around for years and years you guys have just not been around long enough. Now I,ve been in TN 2 years, this will be my second season up here and when I go out cutting lawns I go alone. This season with the contracts I have, not may get, and not including tree or bobcat work or any extras will be bringing in $5,295.00 a month working 4.5 days a week. Yes I had to bid low to get some of this work but only by $20.00 from the next lowest bidder. You don't need to get rich from an account, just pick the right accounts to go after. I don't even bother doing any residental properties but four for a guy that owns an insurance company. Theres still money to be made once you learn the ropes and tie your knots in the right places.

jsf343
03-14-2010, 04:31 PM
Around Cincinnati I have noticed it to be the lowballers. I see these guys with no overhead ie: INS, WC, TAXES offering a $35 yard to do it for $20. My equipment is paid for and I don't have the expense of a shop and home, just run out of my house. I do pay taxes, ins., and looking into WC. Flagged a bunch of these guys on CL last year just for fun and one replied "we are legit, we are bonded." I laughed. He was advertising $20 max on cuts. He is not registered with the state of OH.

This is right on the money! I brought this up in numerous threads in the past only to be told not to worry about the lowballers, in 6 months they will be out of business. I doubt it because behind them are 500 more.

JohnnyRocker
03-14-2010, 04:58 PM
I will do you one better, in my area we have a huge multi crew outfit that also happens to be illegal. They have 50 some trucks and the address the buisness is registered to is in one of the worst apartment complexes in town. The run straight illegal aliens for employees, they dont even ride in the cab of the truck they pull up to the account 1 white guy driving the truck he opens the enclosed trailer and 4 or 5 illegals pour out on mowers and trimmers. This company has I would say 80% of all the maintenance work in this town because their prices are so low the bids usually come in at about half what everyone else is.

These redneck idiots who hate mexicans, yet they hire them and hurt america. They should get the death penalty.

LwnmwrMan22
03-14-2010, 10:10 PM
IMO, it's just a cycle. We don't have many illegals where we're at. However, the smaller guys / part timers hurt the 1-2-3 crew LCOs who hurt the smaller / part timers.

I've tried to find a niche, and it worked for a while. Actually, I guess 2 niches.

The first was to get small to mid sized commercial properties where I could do EVERYTHING on the outside of the property for a package price, flat fee each month, 12 months.

The second was do go after large government / institutional mowing, stuff that others wouldn't be able to handle.

The problem is this. I do a larger school system (for this area) as well as 2 cities. I have large trailers (1) 26' flatbed that hauls a 60 hp Kubota tractor with a 15' trideck, and (2) 24' enclosed trailers lettered up the same to haul the zero turns.

When we mow the schools, we have a convoy from one school to another. When we're mowing the cities, we're constantly criss crossing the city on 2 different days to get everything done.

People see this and think "wow, I need to get those accounts, look at how much he's making". You then have a target on your back, because everyone thinks low bid gets the job. This keeps pricing low.

The truth is, there's not much money to be made here anyways. If a private contractor charges too much, these institutions will just take it back in house. You know you're on the right price when one year they bid it out, then the next they take it back in house, then bid it again.

So you have to find that line, and then hover on it.

The full service commercial accounts, while great money makers in the past, have driven the price back down due to the economy. Most of these places don't just through money willy-nilly at the landscape maintenance as they used to, they're price comparing now, which again, holds the line.

As a 2-3 crew LCO, I cannot compete with the small part timers or even full time guys on residential. I pull up to the curb with my truck, 24' trailer with $50k worth of equipment and I cannot do a 20 minute job for $35. The drive time alone will eat up that money.

This drives me to the larger properties where I can knock out 50 acres of turf, trimming, blowing, etc., in 4 hours.

If you think I can bid 50 acres of turf at $50 / acre per cut, you're mistaken. That would be $2500 / week or $50,000 / season (5 months) where I'm at. At that rate, the institution will take the work back in house.

So, it's driven lower for the price. But since it's public info, usually listed in the local paper after board meetings, then everyone sees how much is getting done for $xxxxx.xx and tries to do the math on the smaller properties.

BUT, the property owner doesn't factor in that the smaller the property, the more per acre or sq ft you actually have to get, to cover drive time, admin costs, insurance costs, etc.

So, the small guys get squeezed since the property owner already has it in their head of what they SHOULD pay.

richonsa
03-14-2010, 11:10 PM
Lawn care is easy to get into. The "barriers to entry" are low. The reason that there is so much competition is that it is SO easy to get a mower and start cutting. I know of some good size landscaping companies for which I have done accounting and tax work for. They make great money. If you think that these BIG LCOs run around just to look like big shots and don't care about making money, you're high on something. It's real easy guys. When you have many guys working for you, you make money off their labor. So, you have several 3 and 4 man crews running around, and they are knocking it out fast. Well, the key here is to organize the labor and keep costs low. Good time management is CRITICAL. Since they have everything in place, they just keep the guys running on schedule. They can cut prices back to out compete other crews. The lower they go, the more work they can get, the more revenue comes in. Guys, some of these crews are making smoking money. Want to hear something crazy? A firm I used to work with had a client that moves pine straw. They get it from down south. They bring it up to Metro Atlanta. They sell the straw to guys that distribute/sell it. They clear over 400k/year. Moving straw. 400K. Pine straw. ( I included this in the post to give an example of how you can make killer money doing something very mundane and seemingly unimpressive.)

Anyway, it isn't any one thing. Those big companies use guys that will work cheaper. The part timers are always there. The low ballers will never go away when the 'barriers to entry' are so low. You have to gain a competitive advantage in any business or you have to get out.

ryde307
03-14-2010, 11:17 PM
IMO, it's just a cycle. We don't have many illegals where we're at. However, the smaller guys / part timers hurt the 1-2-3 crew LCOs who hurt the smaller / part timers.

I've tried to find a niche, and it worked for a while. Actually, I guess 2 niches.

The first was to get small to mid sized commercial properties where I could do EVERYTHING on the outside of the property for a package price, flat fee each month, 12 months.

The second was do go after large government / institutional mowing, stuff that others wouldn't be able to handle.

The problem is this. I do a larger school system (for this area) as well as 2 cities. I have large trailers (1) 26' flatbed that hauls a 60 hp Kubota tractor with a 15' trideck, and (2) 24' enclosed trailers lettered up the same to haul the zero turns.

When we mow the schools, we have a convoy from one school to another. When we're mowing the cities, we're constantly criss crossing the city on 2 different days to get everything done.

People see this and think "wow, I need to get those accounts, look at how much he's making". You then have a target on your back, because everyone thinks low bid gets the job. This keeps pricing low.

The truth is, there's not much money to be made here anyways. If a private contractor charges too much, these institutions will just take it back in house. You know you're on the right price when one year they bid it out, then the next they take it back in house, then bid it again.

So you have to find that line, and then hover on it.

The full service commercial accounts, while great money makers in the past, have driven the price back down due to the economy. Most of these places don't just through money willy-nilly at the landscape maintenance as they used to, they're price comparing now, which again, holds the line.

As a 2-3 crew LCO, I cannot compete with the small part timers or even full time guys on residential. I pull up to the curb with my truck, 24' trailer with $50k worth of equipment and I cannot do a 20 minute job for $35. The drive time alone will eat up that money.

This drives me to the larger properties where I can knock out 50 acres of turf, trimming, blowing, etc., in 4 hours.

If you think I can bid 50 acres of turf at $50 / acre per cut, you're mistaken. That would be $2500 / week or $50,000 / season (5 months) where I'm at. At that rate, the institution will take the work back in house.

So, it's driven lower for the price. But since it's public info, usually listed in the local paper after board meetings, then everyone sees how much is getting done for $xxxxx.xx and tries to do the math on the smaller properties.

BUT, the property owner doesn't factor in that the smaller the property, the more per acre or sq ft you actually have to get, to cover drive time, admin costs, insurance costs, etc.

So, the small guys get squeezed since the property owner already has it in their head of what they SHOULD pay.

Good post. I think I may know who you are. Where are you located? Anyways good luck to you this year.

cuttin-to-the-Max
03-14-2010, 11:36 PM
KRAZY guys (low baller) here are taking our flyers outta mail boxes+dropping them in the street!!!!!!!!!! Many of the LCO's have teamed up against this guy! He's taking ALL OFF OUR BUSINESS $1O dollars a "pop!"/lawn front and back
10 DOLLARS!!!!!!!!! I cant do ANYTHING for 10 dollars! He took soooo many driveways from us last winter! If this keeps up we will all be out of business..we just can't do it that low! His work is crap but for $10 you cant beat it! (thats what the customers are thinking!)

We have all called him and complained hes a __________________________...... He wont even answer or reply to our calls this why you gotta make real good relations with your customers because of people like this...I have a good 30 who are confirmed but idk its gonna be hard this yr!

brucec32
03-15-2010, 10:56 AM
KRAZY guys (low baller) here are taking our flyers outta mail boxes+dropping them in the street!!!!!!!!!! Many of the LCO's have teamed up against this guy! He's taking ALL OFF OUR BUSINESS $1O dollars a "pop!"/lawn front and back
10 DOLLARS!!!!!!!!! I cant do ANYTHING for 10 dollars! He took soooo many driveways from us last winter! If this keeps up we will all be out of business..we just can't do it that low! His work is crap but for $10 you cant beat it! (thats what the customers are thinking!)

We have all called him and complained hes a __________________________...... He wont even answer or reply to our calls this why you gotta make real good relations with your customers because of people like this...I have a good 30 who are confirmed but idk its gonna be hard this yr!

Flyers in mailboxes, eh?