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View Full Version : Has anyone chopped their company size down and done better?


dmk395
02-29-2012, 07:13 AM
I'm running 3 guys plus myself. My gross #s can be really high, but at the year end my net isn't as much as I would like it to be, plus I'm always chasing work to keep people busy.
I've had the thoughts of jacking up prices 10% all the way around this year, then if things go bad, just run a real lean outfit with myself and my best worker. That would cut down all my expenses, and eliminate the need for me to spend the weekends chasing work, as I would have enough already built it. In addition I could sell one truck, pay less for insurance etc. I'm really wondering if my net would be much different....anyone done something like this?

maelawncare
02-29-2012, 10:23 AM
I have thought about it many many times. I am the same size as you and having employees in a PITA. I often thought about just going back to just me.

Only problem with downsizing. Is you have less accounts. So if you lose one it hurts a lot more. I just lost a $1600 a month year round contract. If I was smaller and only ran 1 employee, I would be ruined.

There are plus sides and down sides. Best bet is to run a lean as possible. Dont put all you chickens in one basket and be honest with your employees. If theres not work for them that day, theres no work.

jsslawncare
02-29-2012, 10:38 AM
I did this 2 yrs ago and it worked out great. I cut hours worked, drive time+ mileage and, and, and, most import- crappy low paying yards, slow paying customer's or if I hated cutting their yard. New customer's had a price increase over what I would normally charge. The next year everyone got a $3 price increase and no one complained about it at all.

WheatBookkeeping
02-29-2012, 06:45 PM
If you decide to downsize, you may be selling (disposing) of some of your unneeded assets such as Equipment or Vehicles.

Have your bookkeeper make sure the accumulated depreciation for the asset(s) in question is current as of the disposal date. Then have him/her create a Journal entry that will remove the asset(s) from the books, and remove the accumulated depreciation from the books, and record the amount you sold the asset(s) for, and record any cost you incurred because of the sale, and record either a loss or gain on the sale.

The net result of the asset disposals (Gain or Loss on Sale of Assets) will appear on your Income Statement for the period in which the disposal took place.

It has a bearing on your taxes, so make sure your bookkeeper gets it right.

take care~

Bunton Guy
02-29-2012, 08:08 PM
I had layed off 4 guys and sold a truck back in 2008. Since then I had gotten rid of all late & slow payers. Net is up big time and headache is down big time.

It feels better to not be in such a rush in the mornings leaving to go get everything ready at the shop. Now I can take my time and get out because the show doesn't start till im ready.

larryinalabama
02-29-2012, 08:18 PM
Everyone encourges me to hire people and grow big. Im enyoying being solo and plan on staying that way. Im not getting rich but part of life is enyoying what you do to earn your living. Funny thing most of my business is on the "lake" and I plan to do fish a little this year while Im working.

jsslawncare
02-29-2012, 08:36 PM
Larry, I'm planning some fishing trips too this summer.

knox gsl
02-29-2012, 08:50 PM
This kind of confirms my business goal of getting 60-70 solid residential customers and a dependable full time worker.

dmk395
02-29-2012, 09:26 PM
I'm really debating on keeping one guy. I can stay busy with that, and take the best and highest clients. I will pay that one guy real well so he will be happy too. The problem with growth often is taking on lower paying stuff to keep busy, but your expenses still stay the same. Growing one more year, then at the end am gonna take a good long look and make a decision.

maelawncare
02-29-2012, 10:38 PM
Growing one more year, then at the end am gonna take a good long look and make a decision.

Exactly what I am doing this year. I will never go without at least 1 employee anymore. I just hate doing all the work by myself.

Exact Rototilling
02-29-2012, 11:03 PM
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MLI
03-02-2012, 05:04 AM
Ive been back pedaling since 08 from 6 guys, to 4 in 09, to where I am now which is solo. The gross has changed alot, but the net is close to same if not better. I was forced to trim all fat in company, and streamline everything. Biggest factor is alot less stress, down side maybe if I get hurt, but I think the business would suffer even if I had guys and got hurt! Theres so much craziness going on in the world that can effect business right now, that the smaller you are, the better! My plan is to be debt free this year.....wait and see what happens with the next president....see what happens with Iran and fuel prices, and re-group in a yr or so. BTW I'm in Weymouth Ma.

coolluv
03-02-2012, 08:04 AM
I often wonder how companies in this line of work grow so fast. I know why...they price their work cheap. My growth has been slow, but I price things on the high side. I'm not overcharging but I make money on everything. I don't take on bi-weekly customers anymore and I only offer full service with an agreement. But I think that is the best way to structure your business. (my opinion only)

Ive always thought.. what good is having a bunch of low priced accounts and having to pay employees to help with the load only to make a little more than you would solo. I don't want to be solo much longer but I can't yet justify adding full time help.

If your not making money off of your employees then you are pissing in the wind and you need to downsize. Employees are supposed to make you money and that is why you hire them in the first place.

Just my 2 cents.

Dave...

Exact Rototilling
03-02-2012, 10:50 AM
I often wonder how companies in this line of work grow so fast. I know why...they price their work cheap. My growth has been slow, but I price things on the high side. I'm not overcharging but I make money on everything. I don't take on bi-weekly customers anymore and I only offer full service with an agreement. But I think that is the best way to structure your business. (my opinion only)

Ive always thought.. what good is having a bunch of low priced accounts and having to pay employees to help with the load only to make a little more than you would solo. I don't want to be solo much longer but I can't yet justify adding full time help.

If your not making money off of your employees then you are pissing in the wind and you need to downsize. Employees are supposed to make you money and that is why you hire them in the first place.

Just my 2 cents.

Dave...

It's my goal this season to be able to bring on a helper. What has to happen first is 40% of my account are getting a price increase.

The book "the e myth revisited" by Michael Gerber address this very issue of problems with growth. There is a chapter or sub chapter called "getting small again". This way.many of the problems are cured since the owner is wearing all the hats and controlling the chaos.
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Exact Rototilling
03-02-2012, 11:28 AM
Ultimately author comes out says is this venture worth investing in? My goal is to have this determined by the end of 2012. If I conclude that the local market doesn't warrant a decent return for my current offered services with the added expense of a hired helper.....I'm going to look for greener grass elsewhere.

McFarland_Lawn_Care
03-02-2012, 05:00 PM
Subscribing...MLI - I got close to the same plan. Hired one more full time guy this season which will make 2 FT and 1 PT plus me. I'll be willing to grow about 20% at most, then think about having a manager run most of the day to day maintenance and I'll cover the weed/fert apps. I'm ALSO trimming some fat this season - gas is going to hurt. I'm gonna delegate more and micro manage less - nearly debt free and can't wait. Good luck this season folks!

coolluv
03-02-2012, 05:47 PM
Ultimately author comes out says is this venture worth investing in? My goal is to have this determined by the end of 2012. If I conclude that the local market doesn't warrant a decent return for my current offered services with the added expense of a hired helper.....I'm going to look for greener grass elsewhere.

Ive been wondering that since I started. This has to be the hardest business to make a decent living in. I know it takes a while and that is the point. How many years do you have to invest and also invest in the business before it pays a decent living. If you look at the business and the amount of return you get... it can be depressing. I have friends in other businesses that are doing waaaaayyyyyyyy better after only a year or two in business. I really is depressing...especially when it feels like your broke all the time and just eeeaaaking out a living.

Ive thought about moving on myself...... but to what? Plus I'm not getting any younger. So....point is.....I don't blame you one bit. Just too much competition and with business cost rising and prices staying the same or lower......it makes you wonder if your pissing in the wind or not. I don't like to quit so maybe I will stick it out a while longer.

I'm a glutton for punishment.



Dave...

dmk395
03-02-2012, 09:34 PM
MLI
Is your net really better? Very interested...did u jack prices on some and run real good equipment....no help at all?

MLI
03-03-2012, 09:38 AM
So many factors to consider. Yes raising prices, dropping slow/deadbeats, trimming equipment/rent for shop/cell phone with basic plan(no $80 per month smart phone)......thats all a good start. Pull the route in closer....so theres less windshield time. Im geared more towards maint. for alot of reasons that we dont need to get into. Once youve trimmed all fat in business....how many accounts do you have to service? Whats the min. you need to get it done? Equipment thats expensive to own will still be cheaper than employees(walkers,standers,etc) Do you run dumptrucks? We run pickups....half the money to insure,no special lic. etc/dot leaves you alone for the most part! Save on fuel, and can jockey around quicker than dumps!

We are in the same markert.....so im sure the hourly rates are close. Most of my lawns are under 3/4 acre....yours are prob. larger areas. If you want to compare notes pm me and I'll shoot you my cell #

bustutah
03-03-2012, 09:52 AM
I went from 2 crews of 3 to a solo operation. I have more money at the end of the year now and I don't feel guilty about no work for the guys. I think the owner and 1 helper is a good combo.
It is all about "winning in the margins" Check out the book

Exact Rototilling
03-03-2012, 10:53 AM
I went from 2 crews of 3 to a solo operation. I have more money at the end of the year now and I don't feel guilty about no work for the guys. I think the owner and 1 helper is a good combo.
It is all about "winning in the margins" Check out the book


So does this book advise getting small.again....?

Interesting ....? Michael Gerber's E myth Revisited basically lays out the long term plan is to have a business that runs well without your constant hovering and managing. Also it should.be you long term goal to sell.the business. :rolleyes:

I belive many of the principles Gerber promotes work for lawn care but really applies to brick and mortar type businesses.
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bustutah
03-03-2012, 11:00 AM
I've read the e-myth also. Honestly I just havn't figured it out yet.

Becuase of the employee cost and other companies low balling practies I think an honest company has a hard time getting ahead. I think it is possible I have just taken this route it gives me more $, less stress, but less time at home with fam. I have started another businesses lately and will probably focus my efforts on this.

MLI
03-03-2012, 12:10 PM
Exact....I understand that a business needs to grow and expand, and I agree with Gerber, but.....and a big but!!....is I dont think the time to expand is now. The times are tooooo volatile. Inflation is knocking at our doors, war with Iran is just down the street, things are falling apart in Europe...etc etc. Any one incident, and the house of cards will fall again putting us back into major recession. I for one don't want to be holding alot of debt when the **** hits the fan. Once the election is through, Iran is dealt with one way of the other, gas prices get more stable, etc....I'll expand once again

chipk1
03-04-2012, 10:12 AM
Everyone encourges me to hire people and grow big. Im enyoying being solo and plan on staying that way. Im not getting rich but part of life is enyoying what you do to earn your living. Funny thing most of my business is on the "lake" and I plan to do fish a little this year while Im working.

I am in the same boat! I have worked Solo for 11 years. I constantly listen to other local LCO's cry about employees not showing up and having to kill themselves trying to make up for that.

I have 65 profitable good paying accounts accounts. I own a home, my wife has not had to work for 6 years now.

Best of all, if I am ahead of schedule, I can take the day off or leave later in the day and not have to worry about upsetting my employees.

chipk1
03-04-2012, 10:19 AM
I'm running 3 guys plus myself. My gross #s can be really high, but at the year end my net isn't as much as I would like it to be, plus I'm always chasing work to keep people busy.
I've had the thoughts of jacking up prices 10% all the way around this year, then if things go bad, just run a real lean outfit with myself and my best worker. That would cut down all my expenses, and eliminate the need for me to spend the weekends chasing work, as I would have enough already built it. In addition I could sell one truck, pay less for insurance etc. I'm really wondering if my net would be much different....anyone done something like this?

Nowadays, less is more. It is a shame that our governments (Fed, state, and local) see it fit to tax and regulate the hell out of businesses anymore.

And people wonder why the unemployment rate is so high.:hammerhead::hammerhead:

I just refuse to do it!:nono::nono:

I will not submit to Obama:usflag::clapping:

Thank you very much...I feel better now.

dmk395
03-04-2012, 10:33 AM
For the guys who are running solo or one employee, what is your gross per day roughly? In an 8 hr day I can do 500-600 myself. My best employee can go out on his own and do 450-500.

bustutah
03-05-2012, 09:51 AM
Wow 500 would be nice. I'm grossing 375 a day 5 days a week. My biggest mower is a 32 walk behind. I was hoping moving up to a wright stander would improve my numbers. I have almost exclusively res accounts under 1/2 acre.

dmk395
03-05-2012, 10:32 AM
A 52 stander and you easily surpass 375 day. I'm thinking of raising a bunch of prices and by weed out the lower payers...

MLI
03-05-2012, 10:56 AM
Im same figures as you.....450-600 per solo set up (depending on tightness of mowing route). Last yr. we had 2 solo setups, and did quite well. For fall clean ups or larger jobs we will combine 2 workers into 1 truck(usually the dump)

Five Points
03-05-2012, 12:01 PM
Im same figures as you.....450-600 per solo set up (depending on tightness of mowing route). Last yr. we had 2 solo setups, and did quite well. For fall clean ups or larger jobs we will combine 2 workers into 1 truck(usually the dump)

I'm planning on going to asecond vehicle on the road to help me catch up on apps and garden maintenance. As well as mowing. Do you find two solos r more productive than a two man crew. Because my thoughts are two guys can do say 18 lawns per day verses two solos can do 10 each. (Im sure the amount per day can be higher but im averaging for my business.

Thanks Rob

dmk395
03-05-2012, 04:34 PM
My 2 man mow crew in 8-10 hrs does 20 lawns. Avg about $800 a day. If I go out solo and send another guy out on a solo route we can do 25 lawns in 7-9 hrs. Route is tighter etc. I'm raising rates a bit this year and gonna see how it plays out.

BBC.lawn.services
03-05-2012, 09:23 PM
Advantage of a two man crew over two solo guys is that you only need 1 truck and trailer rather than 2... Seems to me unless two solo guys are a lot more efficient they couldn't overcome the extra gas, truck, and trailer...

Exact Rototilling
03-05-2012, 09:48 PM
Advantage of a two man crew over two solo guys is that you only need 1 truck and trailer rather than 2... Seems to me unless two solo guys are a lot more efficient they couldn't overcome the extra gas, truck, and trailer...

I ponder these logistics constantly. I belive.there is a cross over point where equally motivated workers running solo can be faster than a 2 man crew but probably only on small Lawns which I prefer anyhow.
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Five Points
03-06-2012, 12:15 PM
Advantage of a two man crew over two solo guys is that you only need 1 truck and trailer rather than 2... Seems to me unless two solo guys are a lot more efficient they couldn't overcome the extra gas, truck, and trailer...

I thought that as well but i know a local company that works that way a few days a week. He has it goin on. nice set ups and quality properties and does very nice work.

My area is tight andthe extra vehicle is going to be fairly effecient. Im going to give it a go. the vehicle is a nice little jeep so its a toy aswell. It will allow us to be two places at once, at least some of the time

MLI
03-07-2012, 08:24 AM
A 1 man crew produces roughly 30% more revenue, or about $175 per day than each member of a 2 man crew. You have 20 working days in a month(without weekends)that comes out about $3500 which is enough to offset added equipment.

dmk395
03-08-2012, 07:16 AM
MLI
I'm getting the same #s as you. Are you running 2...1 man opps now?

MLI
03-08-2012, 09:21 AM
Thats the plan for now. One thing I like about the solos is anything that happens to equipment , or damage at customers property.....you know where to look! Its also a great way to judge performance. Some hot shots can make alot of money by doing what their suppose to, as opposed to hiding behind other workers in a group of 2 or 3.

Five Points
03-08-2012, 09:29 PM
A 1 man crew produces roughly 30% more revenue, or about $175 per day than each member of a 2 man crew. You have 20 working days in a month(without weekends)that comes out about $3500 which is enough to offset added equipment.

Thats encouraging, I will be looking forward to trying this. Ive got things planned out pretty well so I will never be to far from the other rig if there is a problem.

I also think i will have better response time to the extras that get requested, as before I couldn't get to them till all the grass was done. some weeks that was sat pm.

guitarman2420
03-10-2012, 12:22 PM
I think a lot of the factors in downsizing are based on what you want to do with your life and what are your priorities. For me, I prefer to have 3-4 employees. I'm 59 and I don't want to have to be out in the 98 degree heat in the middle of the summer. I've made that decision deliberately and understand I'm putting less $ in my pocket. If I was 15 years younger I'd do more of the work myself and keep more of the $.

There seems to be that "magic threshold" where a company can get large enough where the "economy of scale" kicks in and you can consistently make more $ by hiring more people and of course bringing in more revenue; but again it's a matter of priorities - are you willing to invest the time and $ to get there.
I've been in big time corporations before - "been there and done that". That's why I'm a landscaper. Low $, but high quality of life.http://www.lawnsite.com/images/smilies/sport-smiley-003.gif

dmk395
03-10-2012, 06:07 PM
If I were 59 I would do the same!

Daily Lawn/Landscape
03-11-2012, 10:28 AM
06' and 07' ran three crews. Slowly downsized to current day. I'm only mowing 7 small accounts and the rest is landscapinging. I now have 1 full time and will utilize 1 part time as needed. I have grossed more in the last 2 months Jan./Feb. in landscape than I would have grossed in 3 month of mowing 4 days a week 8-9 hrs a day.And I was one of the higher priced mowing crews in the area mowing with only 43 accounts. At my peak I was cutting 140+. I just got tired of counting on employees. And I am taking 2 vacations this year. I could not have done that if I was mowing 4 days a week.

Good Luck!

dmk395
03-13-2012, 09:16 PM
I have raised most prices 10 percent across the board. Gonna weed some out and see what happens...