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View Full Version : how do you guys do it?


burninbill
10-29-2002, 01:53 PM
We are in our second season and we a getting more accounts all the time. However with all the new equipment needed, from starting from scratch, we are finding it hard to pay ourselves the money we should get for all the hard work. Do you guys make your business struggle more or you own pocket? I know that you have to sacrifice for awhile before you can make the big bucks but living from check to check is getting old. Any advice would be very helpfull for a guys trying to make an honest living.

Thanks
Jon Walker
Cutting Edge Lawn and Landscape
Louisville, KY:confused:

greenman
10-29-2002, 02:18 PM
Have you compared your prices with others in your area? Maybe you can increase your prices. Maybe make a price increase the next season. Maybe try to bid on the "extras" more often (landscaping,ferts,and mulching pay really well).

Atlantic Lawn
10-29-2002, 02:25 PM
My feelings are get good equipment when you start.New equipment really costs you less in the long run(IMHO),there is no down time and no repairs to pay for.Each week you make your equipment payments into an account.Pay youself every week as well and don't forget to set aside all your expense money too, like taxes.There are good deals out there on used equipment but always remember when you buy used you're buying whatever life that machine has left in it.Owning the first half of a machines life is way better than the second half.If after a few years you are still livin' pay check to paycheck than something ain't right.It's essential to raise your prices rather than work more hours.One BIG problem with lawn care is pricing. When the bottom of the bunch drives the pricing you are doomed. Find another niche which values your labor.

scott's turf
10-29-2002, 02:29 PM
Think of how long the equipment that you are buying are going to last. Things will get better but be wise with your spending. If money is tight and you are not going to use a piece of equipment a lot than try renting it for the few times a year that you will use it. Don't get over your head. Buy used when you can and save money. If you buy all new equipment at the same time you will be digging yourself out of a hole for awhile.
Good luck

mowing king
10-29-2002, 07:16 PM
Keep a time card for each job and a time sheet for the day. Look at your total production dollars and divide that by how many hours you worked. That gives your production per hr. It should be between $34-$40 per man hr. Door to door.From the time you punch the clock to the time you punch out. These numbers are national avgs. so we know its done everyday.

If your numbers are lower you need to raise your prices,get a tighter route and mow faster. Pick any two of the three.

KirbysLawn
10-29-2002, 07:23 PM
I could charge $5 a lawn and have more business than I could handle and be in the same boat as you. Have you taken the time to figure your cost per job v/s what you are charging? If you have more business than you can handle I would take a VERY SERIOUS look at what you are charging!!! Especially since you say you are working for check-to-check, you could be digging yourself a VERY big hole.

I think you have underbid on your jobs if you are having the problems you describe.

kjfaulk
10-29-2002, 07:36 PM
I agree with everyone else, sounds like you are to cheap. Probally would be a good idea to look at what your charging verses everyone else. People do not mind paying good money for good service.

Bill Davis
10-29-2002, 09:16 PM
Just try to branch out into other areas such as mulching, sod, fert. and like you said it does take awhile to get established but you have to start somewhere.:)

Envy Lawn Service
10-30-2002, 12:29 AM
I got a shocker today when I went to a dealer outside my working area. We were jabbering about pricing a bit. Everyone began to talk in "blade minutes".

I was a little shocked at this approach. They we all agreeing that they charged an average of $1 per blade minute for running the mower which is $60 an hour. WOW!!! :confused:

I don't think the market in our area would accept that kind of pricing. I also can't really see how that can be a fair calculation. Also machines are different and have a different productivity level per minute or hour.

Pricing per Square foot for mowing seems more sensible to me.

What's some of your averages per SQ FT or acre?

Swampbeast
10-30-2002, 12:33 AM
Gee, I am no where near so fancy, I just go take a peek at the lawn, walk around it for a minute, figure out how much money it would take to make me want to work on this yard, then add $5, and there you go. My pricing system. Simple as heck and I have always made a very good profit.



:cool:

greenman
10-30-2002, 12:35 AM
$1 per blade minute would never work for smaller mowers and 21" ers. I'd stick with the sq. ft. formula.

LawnSmith
10-30-2002, 02:01 AM
we just eye-ball them. this is my 6th season and it didnt take too long to figure out a profitable pricing system.

if the soon-to-be customer doesnt like the price, its not worth having them as a customer.

RwADesigner
10-30-2002, 03:47 AM
I have for the past 6 months been tryin to figure out a perfect bidding system for my company. I have tried several different ways and none have been bad, but none have hit right on the dime. I always hear people in the market and on these forums mention a $45-60/hr fee.

Does this include overhead?
Materials?
Equipment?
Profit?
Your paycheck if it is your labor working for you?

Would someone please clarify some of these things for me. I dont want anybody to go into details on there specific charging...because i dont want to get into your business. But if someone would please help me out on this issue, i would be very grateful.

ranger520
10-30-2002, 05:02 AM
One thing that I have done to be profitable and set myself up for my second year in business is to keep close with my local rental company. For instance, i recently purchased a Ryan lawnaire iv for $469.00 with a honda engine. It is not the most beutifull piece of equiptment and it is a b***ch to run but it paid for itself in like 6 or 7 jobs. Now tomarrow I have a one hour or so aerifing job to do and I will make $90.00 for my time. Pur profit in my book. Rental places will commonly turn equiptment over every two to three years no matter what the condition. Just one way to put more money in your pocket.

Scott

Gravely_Man
10-30-2002, 11:56 AM
I would also seriously look at what you are charging. Getting new accounts is a good thing but getting them because you are selling yourself short might be the problem. Check the books, talk with your accountant and get prices from the competition that is making money and has been around for a while.


Gravely_Man

scott's turf
10-30-2002, 12:25 PM
Ranger, remeber anytime you are using any piece of equipment it is never pure profit. You will eventually have to replace this machine and will need money to do it.

ranger520
10-30-2002, 02:47 PM
once a piece of equiptment has paid for itself like 5 or 6 times over it is now pure profit. i do not care what anyone says. With a strong mechanical aptitude, your equiptment will last forever.

Envy Lawn Service
10-31-2002, 12:28 AM
Any machine, I don't care what it is or how old it is or how much revenue it has generated....It is NEVER pure profit...PEROID.

There are always expenses related to cost of operation, up-keep ect.

When a machine pays for itself, pays for a replacement and the money is laying in the bank to by another without ever cutting into your normal profit margins, that's good. If you've got that, reserves for major repairs and it's still out there earning money for you, it's iceing on the cake.

Trust me, it's far too easy just to say everything I make now that it's paid for is pure profit. Then when it breaks and you can't afford to replace it you feel foolish.

I had a friend to do that with a $12,000 piece of equipment. He said man this thing paid for itself quicker than I thought it would and I'm making good money now. A good bit of time went by, he made good money, saved money, expanded the business a bit.

Then serious bad luck hit. The machine broke. It was bad enough to just replace it. Long story short, the money wasn't there, he realized he hadn't been making quite so much as he thought he had. Now he's back working for the man.

Don't let this one bite you!!!

Lawn Wizard
10-31-2002, 12:41 AM
We are in our second season and we a getting more accounts all the time. However with all the new equipment needed, from starting from scratch, we are finding it hard to pay ourselves the money we should get for all the hard work. Do you guys make your business struggle more or you own pocket? I know that you have to sacrifice for awhile before you can make the big bucks but living from check to check is getting old. Any advice would be very helpfull for a guys trying to make an honest living.

I just finished my second season as well, and I always just pay myself a living wage. I figure by takin less money in pay and investing the rest back into the business (equipment), it will set me up in the future to take my fair share for all my hard work, and then some.

Doogiegh
10-31-2002, 01:21 AM
Originally posted by ranger520
once a piece of equiptment has paid for itself like 5 or 6 times over it is now pure profit. i do not care what anyone says. With a strong mechanical aptitude, your equiptment will last forever.

Ok, so how about this.. You buy a piece of equipment for $500. You "Make" $3000 with it, so it's paid for itself many times over, that I agree with... It was a "GOOD INVESTMENT" and it was "Capital" (money) spent wisely.. I'd gladly give anyone on here $500 if they could get me $3000 back in a short time...

But it is still not pure profit for every operating hour thereafter. You may emotionally feel that "I don't owe this machine a thing, it's been great to me", but on the day that it does die, you gotta go out and buy a new one.. which means you can't go buy something else on that particular day cause your $$ is limited, like it or not..

Or you use your mechanical aptitude to fix it which is time you will spend (labor) fixing it... Now you may say that your labor doesn't count cause you'd be working anyway... well let's say that you *could* of had an awesome night doing some outrageous stuff that would of been incredible, but NO..... you had to go fix the damn carb on the trimmer.... <G>

Now tell me that the machine didn't cost you anything. <G>

I understand your general point, but every single hour that you own a piece of equipment and it is running or in service, it is costing you something, even if it's only pennies an hour..

Gary

Envy Lawn Service
10-31-2002, 01:25 AM
Well said Lawn Wizard!!!

You must always always remember that there are other ways of increasing pocket wages besides taking them from needed business revenues. You must pay your business what it needs 1st and take wages second. After all, isn't it the business itself that pays you a wage to begin with???

Cheat it and sooner or later it will cheat you back!

Another prime example here... I do asset protection/financial planning in my main business. I am now an independent firm, but when I first started I was a "career" rep for a large company.

Now this company's board said hey we are not generating enough profit in our business. How can we increase our bottom line and grow our profit margins???

Well, they looked at where the money was going out of the company....payroll!!! They looked at decreasing out going payroll as a quick fix to a stale or down turning company. So they decided hey we need to keep our smart executives that are the brains of the operation. Lets cut out a bunch of reps, rid ourselves of their payroll and renewals. The we can downsize office space and save money again.

But see those reps are the ones generating income for the company, not just the brain people. It did fix things a while and get them out of a rut. But later on it ended up putting them in worse shape than before with decreased incoming revenue.

So they downsized and restructured again...and again. Now they are well on the way to doing it again. It amazes me! If they saw it didn't work to begin with, why do it over and over???

Our business equipment helps us generate our business revenue, of which our wages come from. Same idea really if you look at it. It takes money to make money and more of it when the business is new. If your business goes from having a 52" ZTR and a 21" push to only a 21" push, it seriously cuts into the ability to generate as much revenue. Common sense really.

Unfortunately, most of us don't have a business that is large enough to sustain much bad accounting or choices as listed above.

JimLewis
10-31-2002, 02:19 AM
Without reading the responses above, here's my answer to the initial question:

There comes a point in your growth where you have to either stop expanding, take the most profitable clients you have and just take care of these guys on your own (e.g. without employees.) and stop buying more equipment OR you have to continue to grow, hire employees, continue to grow, hire more employees, buy more stuff, etc.... and eventually you'll be making plenty of $ to pay for all of the employees and still have plenty of $ for you.

You gotta realize that you will never make it rich off of just one or two employees. Wealth is most often built by duplication. And if you do it right, you only make a little bit off each employee. But you get enough of these little bits and they can add up to be a whole lot!

Anyway, those are the only 2 ways to make good $ in this biz as far as I can tell.

ranger520
10-31-2002, 02:38 AM
I suppose I should elaborate on my previous comment. For every job that i do, I figure a portion of the income from that job that goes into a equiptment account. This account I use to purchase new equiptment, repair equiptment, and to purchase general maintinace items for equiptment. Like the piece of equiptment mentioned earlier, I have put aside 1/2 of what I need to purchase a new piece in the spring.

scott

KerryB
10-31-2002, 09:44 AM
I agree with most of what has been said, however, I must take exception to the act of just eyeballing a property and giving a proposal based on that alone.
I learned along time ago that there is no reality only perception.
If you measure a property you gain more than just eyeballing it.
You get to see every part of it, from top to bottom, you can list things you see that can be billed as additional services, you will have your measurements for spreading the proper amounts of seed,fert,pest,herb, etc. . But most of all the customer perceives that you know what your doing and not just pulling an arbitrary fiqure out of the sky.
This is not to bust anyones ego, maybe you can eyeball it accurately, so what?
I worked for a brick mason a few years back. He had been doing the same work for 50 yrs. He could eyeball a job to the T, but he always measured it. I asked why he wasted his time measuring? He said that the customer will trust a bid that was measured and arrived at in what he perceives as a proffessional manner, however, if he just eyeballed it they would think he didnt know what he was doing and not trust him.
So measure before you bid.

crawdad
10-31-2002, 10:00 AM
So, maybe I should have one of those measuring wheels, walk around and measure, taking notes, then eyeball it, price it as the market will bear, and they will respect the bid more?
Crawdad, always open to new ideas

Swampbeast
10-31-2002, 10:12 AM
Hmmm. Good point. So what should I charge per square foot? I have one of those surveyors tape measures, its 300 feet long, I could just use that. Hmmm, maybe get some of those fussy customers to shut up.


:cool:

Mueller Landscape Inc
10-31-2002, 10:48 AM
I know exactly what you are referring to when you are living "check to check".

Here is what I know; with any business you must have what vis called "working capital" That is money that is set aside to pay for operating expenses while you are waiting for you account recievables to pay. How much capital you need is a lesson in mathmatics. You must know your numbers. When guys are talking about blade minutes, they are referring to their production hours. They know how much money they are making down the the minute on every job they have. The differance between making money and losing money comes down to minutes.

Here is an example; 3 employees, they waste 15 minutes everymorning getting out the gate. That is 45 minutes everyday or 3 hour and 45 minutes per week and so on. Now if you know what your production hour rate needs to be you will know how much money they are costing you by their wasted time. That is what knowing your numbers can do for you. Hint!!! most LCO have no idea what their "real" numbers are because they don't do job costing.

Now getting back to your capital. When you are expanding your business, you will need more capital to make things run right. Remember that capital is "cash". What I am referring to is "cash flow". That is the "life blood" of any business. If you don't have a healthy cash flow you will have problems.

I would suggest getting a business plan program like "Business Plan Pro". It has a cash flow utility that will help you understand "Your" numbers. Remember that the numbers "NEVER" lie. You can simply be in denial over them or you can really know them. Those that know their numbers don't need to worry about low ballers because they can make educated business decisions on how to deal with their own markets.