View Full Version : New Lawn Man
08-21-2000, 02:43 PM
I am starting my commercial lawn care business in the spring. Used to do it as a kid in my hometown but I am moving on to bigger and better. I've got all the financial backing and have been doing local research on dealers. What I need is a good list of equipment. I am strongly looking at a big tex trailer 6*16 with gate, and front axle brakes. Leaning towards all Toro mowers (like the look of the new Z masters and their walk behinds. Looks like a good warranty to me) . Shindawa trimmmers and stick edgers seem the way to go. I will have between 40 and 112 commercial lawns by March (depending on who picks up my bids). May run two crews of two or three guys when i pick up more than 80 lawns.
I'm trying to break into the busines and could use all the advice you've got!!!
Oh ya I'll be going to college full time and working a part time accounting job too. I know my days will be long and distinguised:)
08-21-2000, 03:03 PM
First off, congrats on your decision of starting up in the spring. Its good to see that your doing your research early and getting your plan out of the way so you can have a track to stay on. Your starting off in the right direction!
Seems like your taking on quite a bit, but if you think you can handle it, more praise to you!
I wish you the best of luck this spring, and I wanted to let you know that you've come to the right place to get opinions on different equipment, procedures, and to get your questions answered in more ways than you can imagine!
Good Luck and Welcome to Lawnsite!
Good luck! If you have any questions, this is the place for answers. One comment, why don't you get 4 wheel brakes on your trailer? 4 has to be better than 2, right?
08-21-2000, 07:23 PM
I hope you have lots of energy! Best of luck, though, and more power to you.
Free advice, you judge its value. Consider getting backup equipment asap. I am by no means an expert, but my Father-in-law owns a fairly large commercial only service, and he sends his crews out with two of everything in case something breaks. Of course, he isn't mowing with the crews, but he feels that this policy is good insurance in case something breaks. I would like to see what the more experienced guys think about this.
BTW- have installed trailer hitches and brake controls for the last eight years, and yes, get a four brake system. It will be worth the extra money in the long run on tire wear alone, not to mention safety. I would also recommend a digital brake control for ease of use. Big Tex makes a good trailer.
08-21-2000, 07:39 PM
I would highly recommend looking into a wider trailer than the big tex trailer that you mentioned. I have ran into many situations over the last two years where that extra width is a savior with some of the extra "stuff" you begin hauling around, not so mention some 61" or 72" mowers that you may have to get to become competitive in the commercial market if you decide to get into it.
Make sure that your cash flow is steady enough during those winter months to take care of the equipment and maintenance costs. This is the number #1 thing that guys always misjudge on, then their scrambling in the winter time to dump equipment. Play it smart, less is better, you can always add more if the work becomes too much. Same goes for starting off small with fewer amount of people than adding as the season goes on. Don't know yet, but next year could be a drought year, have to plan for the unplanned!
Good Luck in your edeavors. Don't let the grades slide!
08-22-2000, 11:16 AM
Thanks for the tips guys:))
Don't be bashfull to unload your years of worthy experience on my feeble mind:)
One more thing do any of you base what you charge by seeing what the competition charges first, if not how do you set your standard for your services?
08-22-2000, 12:37 PM
Good question! I recommend doing some type of survey on local pricing if possible. Try to talk to some companies close by, but not in you direct area. If you just take a guess you could easily be lowballing the other services and cheating yourself also. Have a good idea what the local market is bringing.
08-22-2000, 03:38 PM
More power too you!! Too me that seems like a extremly big debt to put on yourself right of the bat. Maybe you should look into used equipment, its not the best, but it will save you a lot of money. If things go well, you can get new equipment, or trade your used stuff in. I also agree that you shoud talk to people around you about pricing, if you bid low, that brings everybody's prices down and creates less profit for everyone. Equipment is expensive, keep the prices up!!
08-22-2000, 03:48 PM
I am going to start asking around about pricing.
Thanks for the tips.
I am not worried about the expense for equipment becuase i am going new just for the fact that the used equipment around here that i've seen is shabby at best. (From what i know of Lawn equipment anyway) The only things that concern me is the lawn care part. I want to do a top quality job for my clients. The problem is i need to learn basic principals like fertilization, Taking care of brown spots, Sprinkler repare when to aerate when not to do it, how to bulk up a lawn to make it healthier. How to keep it healthy. what equipment to use to seed, how to seed, blah blah blah blah blah. Does anyone see my point. I Read everything i can and talk to who ever will listen.
08-22-2000, 03:52 PM
Are you crazy??!! After reading all these post about how we not making beans you still want to get into this business? Soon you will be talking to yourself and trying to figure out how you got yourself into such a mess of debt. You will be like Kramer and NNNNewman on Sienfield. Trying to figure out how they can get drink cans to michigan in a profitable way. You will be comparing that to how you can cut enough corners in the lawncare business to make ends meet. Maybe if you eat just banana samwiches every day for lunch you can make a profit. man, there are alot more profitable businesses out there where you can make alot more money than this. That are alot less labor intensive. Where you get find good employees and get more respect than a 9 year old kid with a pushmower..................................................
I havent been negative in a while. Whew! I feel better.
08-22-2000, 04:07 PM
THANKS i am feeling pretty good about myself now too!
Here's where i see the difference for me in his business.
1)I am Professional with my clients(the few i talk with anyway). Their all commercial business's. When i meet with them i look the part and so will their lawns. Their landscape is an image of their business and i garuantee that they want a professional image.
2)There is only a 25% margin in this business (That's 25% of your gross should be take home) I don't plan on cutting corners in this business because that's not me and i don't want my clients cuuting corners off my check.
3)in my area their is a need for professional lawn care. not these punk, grass stained, hill billy outfits I see everywhere. ((No offense to anyone))
Do the math: if YOU have 100 lawns a month and lets say @ $100 a week per lawn thats $10,000 a week well thats $40,0000 a month which in my mind says $10,000 in my pocket put 50% back to pay off equipment faster or whatever else comes up and $2500 in an account somewhere and i still take home $2500 a month for my small family (Which is just me and my wife).
08-22-2000, 04:14 PM
100$ per lawn. Excuse me i just fell off my chair laughing. The lawns would have to be huge. And if they are huge. Just you and your wife can't do that many of them in a week. remember this point the richer the people are. Usually the cheaper they are and the snobbier they are. From your last reply, I think you need a reality check or you are in for a huge dissapointment
08-22-2000, 04:22 PM
I know i am new but two days ago i talked to a local business and they OFFERED $100 per week to take care of their lawn, edging blowing (aerating twice a year,fertilizing, a little weeding of the shrubs and some trimming).Basics. Plus We discussed $25 hour for any sprinkler work. It's decent size 6400 sq yrds (i walked it off). The lawn looks like warmed over puke right now and they aren't happy with the service they get now. I am not trying to come off bostfull, i am looking for help in the basics i want to make this business work and work well.
08-22-2000, 04:28 PM
Originally posted by PB Landscaping
Do the math: if YOU have 100 lawns a month and lets say @ $100 a week per lawn thats $10,000 a week well thats $40,0000 a month which in my mind says $10,000 in my pocket put 50% back to pay off equipment faster or whatever else comes up and $2500 in an account somewhere and i still take home $2500 a month for my small family (Which is just me and my wife).
You should have put that "if" in bold caps, because that's a very big "IF"! You say between 40-112 accounts, it should be between 0 and 112 accounts. You may get some and you may not, it looks like your sure you have 40, are they signed? I'm going into my 4th year, I make a decent income at this but no where near $40,000 a month!
Do you have any clients yet? I thought you were starting next year. I'm not trying to bust your bubble but it appears you know nothing about lawn maintenance (from the 2nd to last post), and plan on making 25%, don't see it happening. Exactly what equipment do you have figured in and what's the cost, brand, etc.? Let's do some more math.
Liability insurance? ($1,000,000)
Blah, blah, blah.....
What else am I missing guys and gals?
Before you jump off this cliff you better make sure somethings there to stop you fall, or splat!
08-22-2000, 04:31 PM
PB there are volumes of information on here that will keep you busy for along time. Why ask such a broad question? Most of the answers you need are already here in the archives. Thats just one job you are talking about. To do the amount of money you are dreaming about will take a volume business. There is only so much time in the day for you and your wife to do so many jobs. Trimming hedges takes time. Edging takes time. Cutting one yard takes time. Look back on these post and get some realistic idea of how much time. Most of the guys on here that are making the big money have big crews. Want me to blow smoke up your ass? Or deal in reality?
08-22-2000, 04:38 PM
Smoke i can do with out.
Reality i i can use.
I don't plan on doing it myself or even having my wife help.
What i do plan on is (if need arises) Two crews, four guys each can do 35 lawns a week>(At least thats what i am told and see)
Charles and Kirby's lawn: I am young and ambitious and i can see that this might sem unreal but i see it happening. You know the saying go Big or Go Home!
I'll get back to you with all the numbers from your list:)
08-22-2000, 04:44 PM
PB-don't forget the business end of your operation. for the size operation you envision, and in your area, you will probably have:
city and state business licences,
liability insurance, as well as for all of your vehicles
insurance as an employee benefits,
local, state and federal sales taxes,
state and federal quarterly income tax payments.
personally, if I were you, I'd look for a business that is for sale. that would get you in the game real quick.
this post is edited to add the following:
sorry guys, I re-read the entire thread and some of my list has been previously mentioned.
by the way, for the members that have been around for a while, doesn't PB remind you of "Mattingly"?
[Edited by geogunn on 08-22-2000 at 08:56 PM]
08-22-2000, 04:45 PM
Yea, but "Go big too fast and go home broke!"
One other question, the $2500.00 a month figure, is that figured before or after taxes are taken out? Even if that before taxes, that's only $576.92 a week, if after taxes, well you can figure that out!
08-22-2000, 04:50 PM
Ya i figured before taxes. My bad:(
If you go through a payroll leasing company they take care of your insurance, workmasn comp., liability, ETC. At least the one i am connected with does. so i took care of that my truck i lease or will use the one i've got but think it's to small for what i need.I understand the growth factor am trying to keep it under control. which i am not to worried about.
Their are also two business's i am looking at to buy out and add to the clients i've talked with. They both pulled 7 figures gross last year.
08-22-2000, 04:52 PM
Just finding good employees in this hot of an economy is going to be a real challenge. We have companies begging people to come work for them Sign on bonuses etc. The benefits you have to offer will have to be good enough to compete with other companies. Reason for my negative firstt post. Very hard to net big money in this type of business. The major reason people are attracted to this type of work. Is working outside it seems. I do some landscaping work that is much more profitable. Some on here have a pesticide business included. You can make an okay income just in the lawn service business. But you could also make that amount working for someone else with out the risk.
[Edited by Charles on 08-22-2000 at 08:55 PM]
08-22-2000, 04:59 PM
I agree GOOD employees are hard to come by. But here i can get them from south of the boarder. they work hard and want to do a good job for their employers i'll use then as long as they work. and when they don't so does their check.
08-22-2000, 05:09 PM
One last post for a while. Leased trucks still must be covered under a commercial policy. Since you figured before taxes your income is going to be 30-35% less. If in school full time and working another job, how are you going to do QA checks, make sure employees arn't stealing your customers or equipment, and so on?
I'm 36 now, not sure how old you are, looking back at my logic and ideas when I was 20-25, some of them looked really stupid now, make sure this is right.
08-22-2000, 05:12 PM
Thanks i'll take all the input i can. I'll keep refining the
plan.Oh ya schools at night and the accounting thing is my own hours.QA checks i hope can be worked in ona suprise basis.
08-22-2000, 06:11 PM
I was just skimming the post that have been written so far and I think that it is great that you want to go at it full guns. But I believe that you should really listen to what these guys have to say. I have been in this biz for 2 years (on my own ) and 14 years total and let me tell you,,, Customers don't just jump in your pocket, you need to start small (enough to survive) build a reputation for quality work get the knowledge and licensing that will help you grow and continue expanding with the knowledge you have acheived. Quality will get you alot farther than quantity any day. Plus not to offend but wouldn't you hate to buy/lease all this equipment and after getting started only 1/3 of the 40 to 110 (possibles) come through. That my friend is a heavy dept. Even if you buy an existing company, be real careful what shape it is in ie; are customers satisfied(are they already looking), are the books in order (very important) what shape is the equipment in, do you have a good mechanic etc...... I could go on but I'm sure you got the picture. Just food for thought. Once again good luck and I hope it works out for you.
08-22-2000, 06:13 PM
08-22-2000, 06:24 PM
I wish I can get 100 $100 yards. My life would be so much easier!! Less people to deal with, less driving, less employees. Thats right buddy, wait until you deal with the public. If you have nightmares now, just wait. I have about 185 lawns I take care of weekly. It took me a good bit of time to get that many. Some of them I wish I never took on, but I guess that comes with the territory. You have high expectations, which is good, but lawn care guys are a dime a dozen. So don't bank on customers banging down your door!! Life is short, cut hard!!!
08-22-2000, 06:36 PM
Sorry another negative post.
Look at all the numbers....here is a start.
Four man crew doing 35 lawns per week
35 X $100 = $3500
Four person crew avg wage including taxes etc. $11
labor at 40 hour week = 160 man hours = $1760
Truck, trailer, mowers, trimmers, blowers misc.
approx. 1/4 monthly payment = $300
gas, oil week = approx. $125
the list goes on and on repairs, license ,recruiting ,training (how is going to do it)insurance,work comp
LABOR WILL BE OVER 50% OF YOUR GROSS assuming all show up.
My suggestion - Start small do it yourself during the day and take classes at night. Go from there
08-22-2000, 06:41 PM
Well, i am going to hang around this Forum and learn all i can and come spring time i guess i'll either eat my ambitious words or we will all kick back and get a big laugh at the new guy who made it work!
PS the more negative the better it gives me more to take into consideration!
08-22-2000, 07:17 PM
O.k., now I have to speak up. First, I would like to wish you the best of luck. But, did you say you wanted to run 2 four man crews? And just before that you were wondering how to seed and what equipment to use? Let me ask this.- Do you have ANY experience in the commercial grounds maintenance field? This doesn't include taking care of aunt Mabels yard. (I get that alot when they tell me "they've done this work before") First of all, LEARN THE OPERATION! Every procedure, every technique, every trick of the trade before you venture on this. Knowing this stuff isn't all of it, it also takes a GREAT DEAL of practice.(i.e. being good with a trimmer, being fast and effective with a blower, etc.) If you don't know how this works yourself first, you're going to have 8 guys out there in the field stumbling around over each other and costing you a great deal of money. Especially if they're "south of the border" Personally, I think 2 four man crews would be stumbling over each other on most jobs anyway. Depending on what equipment you run. It sounds to me like perhaps you should just go out and observe some companieS sometime. I get alot of people that see my outfit, and they want to jump on the bandwagon so they can be like us. Well, consider these things and again, good luck!
08-22-2000, 07:32 PM
You have some good ideas,just a few words.....SlOW DOWN..take your time and grow with it.
08-22-2000, 08:52 PM
Hey PB, you have to start somewhere and not everyone is going to give you $100 a lawn. Yeah, you might have some, but not all. I started this year and I'm doing pretty well but not as well as you're talking. I'd have to agree with about everything Charles has said, except the part about making "beans" for a profit. Mowing has been the biggest income for me, even though I don't have all that many jobs and not very many of them are very profitable. Doing all the things you're talking about like mowing, trimming, edging, etc. all takes alot of time. What is it guys, how many lawns can you do in a day? 15, 20 if you're lucky? If you have 100 accounts and you're doing all of the services you have stated, mowing 20 lawns a day, would still take 5 days to do all of them working maybe 12 hours a day. And then you have to do it all again next week. I like to work but not that hard. Like Runner said, learn the tricks of the trade, have some clue of what you're doing. I'm 14 and some people doubt me but I know when I get done the customer is happy. At least the ones that don't B!tch all the time. Yeah, that's part of it too. I it. People expect so much for so little. Do you know how to run any commercial equipment? If you're talking about 100 lawns, you're gonna need somethin' bigger than that 21" Craftsman. Have you ever run any sort of power equipment? Whether it be trimmers, blowers, hedge trimmers, etc.. Trimmers look easy but there is a trick to them and you have to find that trick. Do you have a truck? A trailer? Sanity? Just wondering. Things you will REALLY need in this biz.
My point is start somewhere. Don't expect everything. I was hoping to make enough money to buy equipment and right now I'm having an ordeal trying to get a backpack blower as some of you may know :). Just do good work and work you're way to the top. Next year I will have a few more jobs because I was told by numerous people that the old guy sucked. I'm trying not to be negative but you have to consider alot of things. So remember these things and kick @ss in this biz. Good Luck.:D
08-22-2000, 09:07 PM
PB NO large commercial/industrial accounts will give a scrub
with no references of work exp. the time of day.
Stick to mowing for old ladies for cash.
Plus a new guy with new equipment and lots of overhead
will never compete price wise with a est. contractor
with a lean operation.
I suggest you go to college and get a nice clean job as a corp. bean counter.
08-22-2000, 09:42 PM
Start small. Stay away from buying someone else's business. Whoever the dude was that started Burger King - he didn't break into the business by buying McDonalds.
Worry about getting enough work for you alone with one truck first, then worry about 2 crews of 4 guys. Why commercial only? A mix of commercial and residential (full service) is the way many successful maintenance companies operate.
I'm guessing you're not the only guy from Utah that cuts grass. There are established, proffesional companies out there now who'll be competing with you for every property you bid on, and you're dreaming if you think you'll land 100 commercial properties right off the bat at $100/cut.
Most new businesses don't realize a profit for the first several years of their existence. However, if you do pull a golden horsheshoe out of your ass on the first try then let the rest of us know exactly how you did it.
08-22-2000, 10:17 PM
Dont forget Social Security and advertising costs. Your plan seems to ambitious. When your out doing proposals you will find out the prices others are charging. If you get the job, your under the majority, if you dont get the job you are over the others. This will take time.
I would say your plan is realistically attainable in a ten year period. It took me a year with the lawn boy in the trunk before I bought a walk behind. This year I could have hired one helper, but would rather do the work myself.
School, another job and managing a new company with unsupervised personnel is a recipe for disaster.
AB Lawn Care
08-22-2000, 10:28 PM
I have been reading alot of these posts and had to give some input!I been doing lawn care since I was 12 and started my lawn care company full time 6 years ago.First off I'm glad you realize that you need to be professonal in this business to get ahead.You also have some other ideas that a good...........but!Here is what in my opinion is wrong with your plan.Your idea of "go big or go home" is what 3 other companys in my city have used in there business.All 3 are now either bankrupt or cutting lawns with a crapsman lawn mower now!An other thing I do not agree with is not doing any labor yourself and getting mexican workers to do all the work for you right off the bat.This comes form experince labor takes allmost 1/2 or more of your cash.Plus the cheaper your pay the cheaper you quality of work.Have you ever seen what workers can do to a mower in 1 year????????I have seen companys that have bought new walkers and in 1 year they look like they have been used as a bumper car all year.Here is an other saying I like.
"IT TAKES YEARS TO GET A GOOD CLIENT...AND IT TAKES 1 SECOND TO LOSE ONE"
Keep that in mind when you hire cheap labor.
As far as your question goes about setting your prices to what others are charging.Yes try to find out the avrage charge,but keep in mind most people will not pay top dollar for a new company in town.The company in my city that charges the most has been in business for more than 20 years.Don't even try to charge top dollar right off the bat.Commercial/Industrial companys will pay top dollar to these companys becouse they have seen there work,like it,and knows that that company will most likely not go out of business any time soon.You on the other hand are a new company they have never seen your work,don't know if it is any good and you have a 50% chance of being in business after your first year.That may come across strong but those are the cold hard facts!!!!
I hope this will help you!
08-23-2000, 01:07 AM
Thanks, AB. Wellput. That also reminds me of something one of my business professors once told me. "A satisfied customer will tell three people while an UNsatisfied customer will tell six."
[Edited by Runner on 08-24-2000 at 03:29 AM]
08-23-2000, 01:44 PM
Hey PB! I'm in the same boat. Hoping to catch a few cleanups this fall and market my butt off in the winter to start in the spring.
I've been on the forum for some time now and these guys have a lot of 20/20 to offer...
I will say this, from the posts and material (i.e. research) I've done, it's difficult to find the good help and once you have them it's even harder to have them produce good work, not destroy your equipment and not hack off the occasional customer for any number of reasons.
Lastly, in order to be a legitimate lmo, it takes a lot of money for training and business (i.e. tax, payroll, etc.). With these AND the marketing that you'll have, man that's a load of money to dish out while hitting the floor running... I had a lot of the same ideas: buy the equipment; get some temps; get some customers. After this forum, I thought it out and came to the conclusion: Work alone; Lock-in customer-base; buy the equipment I need; serve the small customer-base I've established (to death); and have slow- to moderate growth. Then add employees as I need them.
08-23-2000, 03:44 PM
"I suggest you go to college and get a nice clean job as a corp. bean counter. "
I second that. After school is done, if you still want to do this, you will have the know-how to hire a few crews and supervise them from your season skybox at Yankee Stadium.
08-23-2000, 03:53 PM
I'll third Stone's response about going to college. I did and have worked in the corporate world without any satisfaction. Now I have the education which helps when you try to communicate with some of your more educated customers. Puts you on a level many other "scrubs" (I know, I know I didn't want to use the word, but for lack of anything better I did :)) can't reach. I don't regret for a minute going to school and then going into this. I mean the money I paid (okay my parents paid) to go to college could have set me up with a pretty nice business, but as The;lawnguy said now I can have that Skybox for the Eagles Games. Actually I prefer sitting with the "real" fans in the 700 level. :)
08-23-2000, 04:13 PM
Scag, from a 40 year old mans view. Or at least my view. $40,000 net to the owner and under when running your own business is what I consider "beans". Now 60,000$ and up is getting into real money.
08-23-2000, 04:36 PM
Dude, how can you say that mowing makes more money than "other jobs" as you put it??? Do you even offer any other services?? It made me laugh when you asked him if he knew how to run commercial equipment!! :) That was funny coming from a 14 year old who borrows the mower he uses to do his $7 accounts. Sorry!
I agree with you one one thing, that he should start small, but not as small as your thinking of a 21" crapsman in moms trunk! Sorry Again! Okay, all the anger is out, on to posting on real threads!
08-23-2000, 06:01 PM
Guido-Since I don't have any overhead, I can make pretty good money for someone MY age. And yes I do offer other services. Yeah, I haven't run any commercial equipment but the way he's talking he's going to need to figure it out. Just from looking at some of the mowers out there I could run one. No, I don't have a Crapsman, I bought a Toro and haul it in a truck. No hatchbacks allowed.
Charles-I guess you guys have alot more to worry about I do. Still, $40,000 wouldn't be too bad for me.:)
AGG Lawn Maintenance
08-23-2000, 08:18 PM
P.B. You can make $100 a cut per lawn if you pick up small apartment complexs. Just watch on the amount of lawns you take on. I know guys the do 200-300 lawns a week. By the time you do payroll,gas,trunk insurence,business insurence and taxes your better off doing 70-80 lawns. Like Bill Phagan said millon dollar landscaping business owners might only take home say $30,000 a year. It all depends on your overhead. Good Luck!!! Do your research. The net's the place to get your info(lawnsite.com is too) Travis AG&G Lawn Maintenance
08-24-2000, 04:24 AM
If you have unlimited backing, why don't you go into a business where you can make some real money.
Even in the green industry: Landscaping, Fertililizing or Irrigation business all are far more profitable than mowing.
The fact that you're contemplating "112" customers and a trailer with "front-axle brakes" shows you are a tactical thinker and not a strategic thinker, which is bad for business, but good for accounting.
The fact that you're talking to a customer willing to pay $25/hour for irrigation work when irrigation contractors charge 2x to 3x that amount is an indicator of what kind of jobs you'll wind up with.
Lots of income, no profit.
08-24-2000, 05:56 AM
Scag, u be happy with a new GI JO with the Kung-FU Grip:)
Jerrys Lawn Service
08-24-2000, 09:11 PM
Better learn to walk before you try to run or else you'll
be screaming I've fallen and I can't get up!
08-24-2000, 10:07 PM
Sounds pretty ambitious, which is good! You can't run with the big dogs if you stay on the porch. Just don't trust all your projections and estimations. I can write volumes on that. And, be careful of any partners, backers, etc. except if you have a brother or something. I am speaking from negative experience in the partner department, but I work well, daily with one of my brothers.
If you think your plan is good, put it to the acid test. Walk into a bank (without a .38) and lay it on a commercial loan officer. See how they react, and if they would finance your operation. If you have accounting skill and knowledge, why not put it to the test; it sounds like you have a business plan, and some degree of reason (although, like the rest of us, maybe one or two loose screws- just kidding).
I think you need a little bit more elbow grease and hands-on experience than you suspect. I am not speaking out of turn, because I started small, before college, ran my company and got a B.S. in Political Science in 1991, then decided to keep landscaping while all of my friends got good desk jobs on Wall street or in Washington. Personally, I wouldn't trade what I do (even with its problems) for a monkey suit job (at least not now!!). We have quite a mix of customers - commercial and residential, and I don't mean to sound negative, but there is no real easy way. Even the best equipment, the best guys, and good accounts require hard work and dedication. We have decent equipment, and I keep staff for several years without too much turnover, so I consider myself to be lucky in that regard. Still, each new day is as exciting as the last. One day we had 8 flat tires between 4 different crews. How was that for productivity?
It is quite impossible to factor the unforseen, or intangibles in this business. You are entering the market during high times economically. What is your contingency plan for zero growth years? Have you been realistic about your business plan, or did you calculate straight line growth. How about the cost of keeping yourself on payroll, without billing yourself out. I haven't studied your market, but even Lawrence Stone probably needs/gets more than $25.00 per hour, and he's the no overhead KING. My operation lies somewhere between no overhead and too much (we have a lot of expenses now) - but I keep plenty of older, paid for machines running, rather than just buying new ones. Once you become an employee of your company, the overhead kicks in and begins to compound. True, I take some risks, and I like to buy new stuff, but I've dumped my profits directly into the business since day 1, and it is starting to payoff. Even with my current situation (partner problem), the goodwill I've developed over 20 years can't be taken away from me. You can't just buy goodwill, and if you take all the profit out of your business right at the start, you can't buy the goodwill later. Most of all, based upon the goals you've shared here, you'll burn out quickly unless you pace yourself - I see this happen to a lot of guys.
I haven't been around the forum much in the last couple months, because of work, but I suggest you ask more questions, then formulate a plan. I am sorry to jump all over you, but anyone can just fund some equipment purchases, then start up. Even the best laid plans need to be followed by a good leader, and then adjusted as necessary during the implementation. Good luck, and ask questions now before you jump all the way in.
08-24-2000, 10:41 PM
Try a 2 or 3 man mowing crew. When I mowed it seemed much more efficient to me. Too many people on a crew and you always have someone standing around. Also watch debt very closely. I too would start smaller until you get experience. This way you will learn how to schedule and run crews. Don't expect crews to jump through hoops when you are not there.
My $.02: Best of luck of course. Regarding the not having any idea of how to properly maintain grounds. Maybe put your plans on hold for a year or 2. Find a large company near you that is doing high quality work, and work for them to learn the ropes. You can sample different pieces of equipment to help you decide on what you like, & learn a lot of the little (and major) tricks of the trade. Otherwise you will need to find & hire a good manager to run your 2 crews for you. (Less money for you again, at this rate we're all going to leave you with $10.00 per week :)) Even if you do find 8 employees with real commercial experience, every company does things different. Out of those 8 guys I would bet only 2 or 3 of them use a trimmer in the same manner. Your crews will look like they are running a Chinese fire drill without a good manager guiding them and ensuring QC. (You know what, I don't even know what that saying really means, so if it is offensive in any way, I apologize) How are you going to do a surprise QC inspection if you don't know what to look for. Also, check your pricing. If customers are falling over to get you to be their LMO, maybe you are the lowballer of the area, and maybe they are taking advantage of you. Maybe those $100.00 lawns are really $200.00 lawns. Commercial property managers & owners are educated about these things, although they won't let on if they don't have to. Ahhh... So many things to ponder. I wish I knew about this site when I started 4 years ago (if its that old). That's enough for now.
08-25-2000, 08:41 AM
>I haven't studied your market, but even Lawrence Stone probably needs/gets more than $25.00 per hour, and he's the no overhead KING
Labor burden per hour $15
Equip. and misc overhead $5
Total costs per hour=$20
Sell price is $25
Gross profit margin is 20%
Even at $25 per hour I am still making money (not much).
But if I want a certain job I have the ability to lowball
and STILL make a profit.
Sell price of $35/hr Costs $20 margin 42%
Sell price of $50/hr costs $20 margin 60%
If some of you are having trouble figuring out gross profit margin I suggest you go to staples/office max and buy
a $8 business calculator.
If you want to be sucessuful you should be able to figure
gross profit margin b/4 buying any lawnmowers.
08-25-2000, 10:38 AM
Here's an add on to Lawrence Stone's post about profit margin.
A lot of people think that if you buy something, like a tree for instance, for $ 100.00, to make 30% you would add $ 30.00 to the cost as markup. This is not 30% gross profit margin, however, as Stone has pointed out. The $30 in addition to cost is only 30/130 = 23% gross profit. In order to have a gross profit of 30% on that or any other item you need to have a markup factor of about 1.42x (1.42x100=$142. 42/142=30%).
While it may seem obvious at this point, it is worth stating that the amount of gross profit is what pays for overhead. If you are an employee/owner - your wages should be considered an expense (overhead), and if you set your company up correctly, you should be able to optimize your company's tax liabilities, while taking the profit out as wages. Sometimes, as in the case of an LLC, there is pass through taxation, so the owner, or partners realize their wages as profit after expenses (like a DBA). We are an LLC, but moving away from this system, because it pays off to all partners with profits, while the profits should be calculated after the employees (including any partners or owners) are paid.
As long as you are taking home as much money as you desire, your company really doesn't need to have an excess profit, or that money will be gobbled up by the IRS. If you are going to take the business end of operations seriously, you should carefully consider how much to pay yourself (whether or not you actually take the money is another story - For a long time, I took very little cash out of operations). This will tell you how profitable your company is, or could be. The best way to understand this concept is to imagine your company as a stand alone enterprise (without your involvment). How much would it cost to replace yourself with a competent individual? It is not reasonable to pay yourself nothing or meager wages just to show that your company is profitable.
08-25-2000, 04:32 PM
Good advice from a few experienced guys gets one to thinking. Thanks. I have still got questions?
08-25-2000, 09:51 PM
Now I have questions, but dont know what to ask.????
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