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joshman108
07-05-2011, 08:07 PM
Ok. So im entering my freshman year in college and im looking to expand my business, but there are so many things I don't know. You'll probably see me around asking lots of questions in the future but Ill just start with one.

Say I have a crew doing their thing. Do you pay them by the job or by the hour? I figure it could go either way. :confused:

And is it even worth it to try to run a business doing residential? I don't see any big companies doing this, which I figure either increases my chances of success, or is a sign I shouldnt try it. Because your standard yard is $30. Does that leave enough profit margins? Or is it better to focus on commercial?

Thanks! Im just looking for wisdom.

Patriot Services
07-05-2011, 08:18 PM
Keep it simple. Pay by the hour. Piecemeal usually ends up in corners getting cut or falling below minimum wage and overtime guidelines.
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joshman108
07-05-2011, 08:20 PM
thanks! I appreciate it

willretire@40
07-06-2011, 12:09 AM
Piece work only works good when you have a tight route.

straightlineland
07-19-2011, 10:00 PM
who is going to keep an eye on things while you are at school? handle problems/complaints? or do quality control checks? just curious...I would suggest hourly but i dont know how you are gonna make sure they are not milking the clock. just my opinion

Brown & Co.
07-28-2011, 07:25 PM
I've recently been thinking a lot about this issue particularly. I pretty much started the same way. AND started with residential now Im about half and half. i completely wish is was all commercial. My problem and maybe someone can add some of their experiences as well and some possible fixes...Starting off as a company cash flow is a tough one...well...it defiantly is when your residential clients end up paying a month late...your then having to foot their pay check as the owner for at least their first month working with you...and only a month if your money management skills are savvy. I would have not made it through the first month if i didn't know how to turn $5 to $20 and $20-80, and so on. I was able to just squeak by. I think this is when most owners get burnt out with their business.

Perhaps hire that first guy under the impression that you have and will continue to pay them BUT you cant pay them until the client that THEY performed service for pays you.

I dont think its right to do it that way though...when you screw with a mans paycheck all hell can and will brake out.

Yes for those exact reasons you stated...Profits are greater because the NEED ALL the services performed, AND performed regularly or it will cost even more than that at a later point in time for all the over growth. Plus the usually pay on time and in full no questions asked.... the problems with them is that it will take longer to approve of a quote due to the chain of command that most companies put in place. ALSO the LARGE corporate companies often take up to 3-6 months to initially pay because of that chain of command and all the cross checking, forms or external monetary fund expenditures and the like. Some need time stamped photos before and after if they are off site construction and contract companies.

As far as profits go its only more profitable because they need more services more often...if you dont have the labor force that will be your first limitation do doing commercial. The price per service never changes...because its the same thing (residential vs commercial) just more of it so you either supply for laborers to finish in the same amount of time... or the few guys you have work longer .... T&M Time and Money.

But so yeah ...if anyone could help out with what they did in that first scenario I'm sure it wont only be helping me but many others as well.

MR-G
07-28-2011, 11:14 PM
first get your cash flow somewhat positive....start by having all new accts open a "billing acct" with you...what this means is they pay with a credit/debit card each month, cut or whatever the agreement..also at the start of service a deposit in the amount of the first month is required.....(this covers your costs for month 1) at the end of month 1 ( or on the 1st day of month 2) you then run their card (you have on file) for the month 2 payment...their reciepts from the creditcard co. are their reciepts from you...hence no paper billing or postage...there are many ways of handling this type of billing..and its not for everyone...we have lost new bids due to it...however...i promise you that each and EVERY acct. we have is always current....we wait for none of our receivables.....oh and yeah..the credit card co. charges us a small fee...but its worth every penny...at 700 accts...its the only way....hope this helped....good luck.

MR-G
07-28-2011, 11:24 PM
I've recently been thinking a lot about this issue particularly. I pretty much started the same way. AND started with residential now Im about half and half. i completely wish is was all commercial. My problem and maybe someone can add some of their experiences as well and some possible fixes...Starting off as a company cash flow is a tough one...well...it defiantly is when your residential clients end up paying a month late...your then having to foot their pay check as the owner for at least their first month working with you...and only a month if your money management skills are savvy. I would have not made it through the first month if i didn't know how to turn $5 to $20 and $20-80, and so on. I was able to just squeak by. I think this is when most owners get burnt out with their business.

Perhaps hire that first guy under the impression that you have and will continue to pay them BUT you cant pay them until the client that THEY performed service for pays you.

I dont think its right to do it that way though...when you screw with a mans paycheck all hell can and will brake out.

Yes for those exact reasons you stated...Profits are greater because the NEED ALL the services performed, AND performed regularly or it will cost even more than that at a later point in time for all the over growth. Plus the usually pay on time and in full no questions asked.... the problems with them is that it will take longer to approve of a quote due to the chain of command that most companies put in place. ALSO the LARGE corporate companies often take up to 3-6 months to initially pay because of that chain of command and all the cross checking, forms or external monetary fund expenditures and the like. Some need time stamped photos before and after if they are off site construction and contract companies.

As far as profits go its only more profitable because they need more services more often...if you dont have the labor force that will be your first limitation do doing commercial. The price per service never changes...because its the same thing (residential vs commercial) just more of it so you either supply for laborers to finish in the same amount of time... or the few guys you have work longer .... T&M Time and Money.

But so yeah ...if anyone could help out with what they did in that first scenario I'm sure it wont only be helping me but many others as well. you will typical want to have next 2 months payroll already in your operating account....its a hard road to get there...but if your going to succeed its a must....and i dont mean being able to cash advance your credit cards to do it....has to be real ( interest free money)...and that will require time to build up that savings...see my next post for an idea of how we do it...lol (not the tv show)

Brown & Co.
07-29-2011, 12:42 AM
Yes set yourself uP a business plan...to include growth, expenses, startup cost, and all the other normal business plan stuff. Thank you for that great input it certainly would have been very beneficial to me starting up. I unfortunately had big eyes and a big head with great ppl skills and business grew so fast that I couldnt keep up with my local demand. Well I did actually keep up for the most part.
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fireMagic
08-06-2011, 08:06 PM
We are currently making some pay changes in our landscape and sprinkler divisions. Our time clock is now refered to as an ATM machine. Our profit margins are running between 26-35% gross, thats not bad but factoring our OH, we are now feeling some pinches. We have some very talented crew that we feel we can get to perform better if we offer them a flat rate per job based on the sale and let them determin there profits per hour. It get tricky when they have to fix something or its done wrong and they blame it on the designer not detailing something. Everyone is hourly right now, and I plan to keep our Maintenance division that way untill I can impliment a plan for them. As for the Residential Vs Commercial... its all about routing and drive time between yards. Our maintenance division is only 14% of our business and we do about 60% residential 40% commercial. I feel Maintenance is a cash flow/non-profit business. We purchased Isuzu Box trucks, had them painted our fleet color Screaming Yellow with graphics all over. Our cost did go up but having these rolling billboards has definetly made a diffrence. Good luck with your business. Danny

BradLewisLawnCare
08-06-2011, 09:36 PM
I saved a lot starting. Right now I mow resi and tell them I'll bill you the first and you pay by next first. So 8/1 mow bills 9\1 then pay by 10/1. Customers love it. Accounts receivable is like 10% of revenue. Mostly resi and like 5-10% commercial. Over 100k in rev.
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appletreelawncare
08-16-2011, 01:16 AM
Well I pay by the Hour although i have done every house on the routes several times and know how long it takes to get the job done right and yes they will milk the jobs unless you straight up tell them how long the jobs take on a regular basis give or take 10 mins if they milk it fire there ass right away and always let every one know why they got fired put that fear in your employees it keeps them knowing that they must do a fast and efficent job, stay a boss not a friend!

appletreelawncare
08-16-2011, 01:19 AM
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lukemelo216
08-17-2011, 12:50 AM
People on this site just amaze me sometimes. Pay your employees by what ever the state sets out as the rules, and FYI its usually as an hourly wage. I have seen so many threads like this its just sickning.

BradLewisLawnCare
08-24-2011, 10:40 PM
On mowing they log time in time out and travel time. Guy in passenger does before they show up and as they leave so takes no extra time. It's pretty good way for them to keep honest. After logging the same lawn 25times I can at least determine how long it takes and hold them totheyre own standards
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yardude
08-25-2011, 10:46 AM
I pay a straight commission. Certain jobs may not be as easy to pay in this manner, but mine works. We do residential REO's. This is a very small business where there are only 2 workers plus myself running the business. If my workers can get done 8 jobs a day instead of only 6, they make more. If the job isn't done correctly, the bank rejects the job which means they have to fix it or not get paid for it. I feel that having the reward factor helps keep the workers motivated & more gets done because of it. The workers are having to take charge & take responsibility & their paycheck reflects it. I could pay them $10/hour & possibly loose money, but my system is allowing them to to make closer to $12-13/ hour (sometimes more) & I am not loosing money. Also, my bookkeeping is far simpler than if I were having to keep track of hours etc... They are set up as independent contractors with me, where I don't pay out benefits or deal with their taxes. The company I contract out with pays for the liability insurance. The gas bill comes straight off the top. With my system, I am not loosing money but I am not getting rich either, but this is a part time business for me, as I work another full time job. I have always felt that if you can dangle a carrot by paying straight commission or pay out a monthly bonus based on profit, you will get more out of your workers in certain types of jobs.

vencops
08-25-2011, 12:52 PM
People on this site just amaze me sometimes. Pay your employees by what ever the state sets out as the rules, and FYI its usually as an hourly wage. I have seen so many threads like this its just sickning.


I'm with you.

I don't know if I'm more surprised by how many people are operating, illegally.....or by how many are also willing to admit in an open forum they're operating, illegally.

Patriot Services
08-25-2011, 06:49 PM
I pay a straight commission. Certain jobs may not be as easy to pay in this manner, but mine works. We do residential REO's. This is a very small business where there are only 2 workers plus myself running the business. If my workers can get done 8 jobs a day instead of only 6, they make more. If the job isn't done correctly, the bank rejects the job which means they have to fix it or not get paid for it. I feel that having the reward factor helps keep the workers motivated & more gets done because of it. The workers are having to take charge & take responsibility & their paycheck reflects it. I could pay them $10/hour & possibly loose money, but my system is allowing them to to make closer to $12-13/ hour (sometimes more) & I am not loosing money. Also, my bookkeeping is far simpler than if I were having to keep track of hours etc... They are set up as independent contractors with me, where I don't pay out benefits or deal with their taxes. The company I contract out with pays for the liability insurance. The gas bill comes straight off the top. With my system, I am not loosing money but I am not getting rich either, but this is a part time business for me, as I work another full time job. I have always felt that if you can dangle a carrot by paying straight commission or pay out a monthly bonus based on profit, you will get more out of your workers in certain types of jobs.

Did a CPA tell you this would fly? I thought IC's had to supply their own equipment. Its a unique sounding setup to say the least.
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yardude
08-25-2011, 07:18 PM
I have actually talked to my CPA & he feels I am fine. The 2 employees are my son & his buddy. They are using their equipment. When I was younger I worked for a respected realtor that ran a property management company. He ran his business this way. I was a maintenance man & he had me work as an independent contractor. All his maintenance men were IC's. His office help, secretaires etc... were not. This worked for him & I do not see much difference in the situation. It also benefits my workers in that they have some nice write offs they wouldn't have otherwise. Again I want to emphasize this is a very small part time business where we ave. 30 properties a week. If things grow, I may look into doing things differently but for now I believe I am doing it the best way for me & don't feel I am breaking any rules or regulations.

SPEEDSKI
09-04-2011, 12:48 PM
Did a CPA tell you this would fly? I thought IC's had to supply their own equipment. Its a unique sounding setup to say the least.
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This is one reason why REAL companies can't get the prices they really need anymore. I hope the IRS and the Dept. of Labor comes to your door since everything you are doing is illegal.

PLS-Tx
09-04-2011, 02:29 PM
KISS

We use a payroll service, everyone gets paid by the hour.

They fill out a time sheet each week, we email that into the payroll service and they take care of the rest.

This has worked well for several years.

Patriot Services
09-04-2011, 02:46 PM
KISS

We use a payroll service, everyone gets paid by the hour.

They fill out a time sheet each week, we email that into the payroll service and they take care of the rest.

This has worked well for several years.

Plus it gives the employee access to group benefits and discount clubs. Whether the employer contributes is up to them. Tax time is also greatly simplified.:usflag:

PLS-Tx
09-04-2011, 03:07 PM
Plus it gives the employee access to group benefits and discount clubs. Whether the employer contributes is up to them. Tax time is also greatly simplified.:usflag:

Yes it does.

Also, our guys have a debit card. So, they don't need to go to the back to cash a check or get money out of their account.

Sure does save a lot of hassle.

Our company policy states they can have their check direct deposited or mailed to them. We are going to change it, you must have a bank account because your check WILL be direct deposited.

inferno13xx
09-29-2011, 07:15 AM
I've recently been thinking a lot about this issue particularly. I pretty much started the same way. AND started with residential now Im about half and half. i completely wish is was all commercial. My problem and maybe someone can add some of their experiences as well and some possible fixes...Starting off as a company cash flow is a tough one...well...it defiantly is when your residential clients end up paying a month late...your then having to foot their pay check as the owner for at least their first month working with you...and only a month if your money management skills are savvy. I would have not made it through the first month if i didn't know how to turn $5 to $20 and $20-80, and so on. I was able to just squeak by. I think this is when most owners get burnt out with their business.

Perhaps hire that first guy under the impression that you have and will continue to pay them BUT you cant pay them until the client that THEY performed service for pays you.

I dont think its right to do it that way though...when you screw with a mans paycheck all hell can and will brake out.

Yes for those exact reasons you stated...Profits are greater because the NEED ALL the services performed, AND performed regularly or it will cost even more than that at a later point in time for all the over growth. Plus the usually pay on time and in full no questions asked.... the problems with them is that it will take longer to approve of a quote due to the chain of command that most companies put in place. ALSO the LARGE corporate companies often take up to 3-6 months to initially pay because of that chain of command and all the cross checking, forms or external monetary fund expenditures and the like. Some need time stamped photos before and after if they are off site construction and contract companies.

As far as profits go its only more profitable because they need more services more often...if you dont have the labor force that will be your first limitation do doing commercial. The price per service never changes...because its the same thing (residential vs commercial) just more of it so you either supply for laborers to finish in the same amount of time... or the few guys you have work longer .... T&M Time and Money.

But so yeah ...if anyone could help out with what they did in that first scenario I'm sure it wont only be helping me but many others as well.

i know what seemed to work well with me when i started was good planning if a resident wouldnt sign a 23 cut agreement with me and leave a deposit for the year i wouldnt take the lawn i spent 2 weeks selling and mowing lawns by mtself then once i had 25 year long contracts with deposits i hired my first guy, went from a push mower in the back of a honda civic to a reputable company in my area in about 4 years now have 200+ lawns, a landscape division and hardscape division. its all about planning and getting your own hands dirty.