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mtdman
01-14-2004, 05:14 AM
So, I need some help trying to figure this out. Bear with me.

I can mow about 15 lawns per day, solo. That's with busting my butt off for about 9 hours a day. When my former partner worked with me, we did about 20 a day in 8 hours.

So, I'm thinking about trying to hire a part time helper this year. But, here's the problem. If I add a helper, from experience that's only going to add maybe 5 lawns per day in production. And I'm thinking that the labor is going to cost me around 80 to 90 a day, with all the insurance and comp and everything. Which leaves me about $30 to $40 in profit once I pay the employee (averaging about $25 per lawn, city sized residential lots). Personally, that's not that great of an upswing to me.

If I were to be able to do 25 a day with an added worker, for about 9 to 10 hours of labor, that would be a little better. But my experience tells me that 25 a day is somewhat unrealistic, and averaging that many might not happen. In which case I'm back to the above profit margin.

So, what should my plan be? Should I try for the 25 a day with the worker, and hope that we could do it? I was planning on 2 or 3 days a week with a helper, if I could hit that 25 a day it would be worth it to me to pay the worker. Should I move toward bigger properties where I can charge more and make more money per account? (I've stuck with smaller properites last year, yards I could manage on my own.) At some point I'm going to get to an equalization point where I'm making my max per hour, no matter if I'm doing 20 at 25 or 10 at 50.

I guess I am just having a hard time figuring out this whole employee thing. I kinda think it would be better to run a whole second crew or send an employee out on his own, but I'm not at that point yet.

Keep in mind I'm just talking about mowing, no landscaping or fertilizing.

Any advice or help would be appreciated.

JimLewis
01-14-2004, 06:24 AM
TJ, I feel your pain. You're realizing the same thing I realized a few years back. And I think I can explain it a little for you.

First, the numbers. Like you, I found that I (or 1 guy) could do about 15 per day alone. Like you, I also found that 2 guys can do about 20 lawns per day. I also experimented with 3-man crews. I found they did only about 23 per day.

So it seems obvious that a 1-man crew is the most productive, right? And it is - sort of. But there are good reasons why a 2 man crew is better.

First of all, realize that you should be thinking long term. If you plan to grow and create a larger company with several crews one day then you need to do what's easiest to duplicate. Even if you just plan to keep it just you or you and a helper, there are REALLY good reasons to keep the helper, even though he's not quite doubling productivity, like we'd want.

First of all, there's the issue of absenteeism. If you have a 1 man crew and that man gets sick or injured and is out for 4 days, you're going to be 4 days behind schedule. But with a 2 man crew, if one of them is absent for 4 days, by the end of the 4th day you're only a day behind schedule. Not bad! You're customers are a LOT happier. This is the first big benefit.

The second thing to consider is the duplication thing. It's easy to say, "Well, sheesh. If a 1-man crew is so productive, then instead of having one 2-man crew, I think I'll just create two 1-man crews! Then we'll get 30 done per day!!!" Yah, that SOUNDS good. And there's still the huge issue of absenteeism above. But even disregarding that issue, the next big issue is that in order to split these 2 guys up into two crews now for every employee you'll need a new truck, a new trailer, a new blower, a new trimmer, a new edger, etc. etc. etc. Whereas, with 2-man crews, you only need one truck, one trailer, one blower, one trimmer, one edger, etc. for every TWO employees. This makes a huge difference as your company expands.

There are more reasons I've thought of over the years but I can't remember them all. But the two reasons I mention above should pretty much spell it out for you. It's wise to have 2 man crews, even though productivity doesn't quite double.

mtdman
01-14-2004, 07:26 AM
Thanks for your input. How do I become more productive then, to make more $$ while I have that person with me? From a certain standpoint, it's not worth the hassel of adding another crewman if the profit is going to go up marginally.

:D

John Gamba
01-14-2004, 07:45 AM
Tom
I have found that i could do three an hour with a person weedwacking and by my self i did two. the extra yard payed for the worker & gas.
I also found that customers talked to me less because i didnt have a weedwacker in my hand at there front door.
I also found that i had more spring cleanups and fall cleanups= More money at end of the year AND i was able to take on more accounts because of the extra Hans. And i wasn't as tiered at the end of the day also.

If you do want to grow you will have to give up something to get something better! I'm not saying loss money but for about a season you should try it and see about getting more accounts.
People look at you different and take you more seriously when you go after commercial .
John

Team Gopher
01-14-2004, 08:52 AM
Hi Mtdmaster,

If you have some time to read and plan your business growth. Read The E-Myth. It will be very helpful.

Razorblade
01-14-2004, 01:18 PM
This is such a great post as I have been asking myself when can I justify adding an employee and I'm sure there are a lot of others doing the same. This does help us new or smaller companies and I just wanted to tip my hat to those who reply with there experience!

mbricker
01-14-2004, 02:33 PM
2001, last year I had employee, I put the pencil to the lawns we were doing to see why I seemed to be making less money.

Came to the conclusion that 2 people worked well on stops that would be 1 1/2 hr. (or larger) for 1 man, cost me $ on stops that were less than 1 1/2 hr. by myself. More than 1 lawn per stop would figure the same as 1 larger lawn. I didn't have enough larger lawns to be able to put all of them on the same days. (Or enough stops with multiple lawns)

But now some lco's here are not paying help straight hourly for the day. They are paying straight percentage on the job, so nothing is being paid for windshield time. Size of lawn wouldn't be as much of a factor. I haven't tried this yet.

But my biggest reason for working by myself is that no one I ever hired was able to keep up with me a whole day.

mtdman
01-14-2004, 04:11 PM
Originally posted by Team Gopher
Hi Mtdmaster,

If you have some time to read and plan your business growth. Read The E-Myth. It will be very helpful.

Thank you for the advice. I have had several people suggest this.

I have always heard mixed things from larger LCOs. About half say they don't make that much off having employees, the other half claim they make all kinds of $$ from their crews. I don't know what to believe, and I can't seem to make the numbers work. It's my fear that I wouldn't be able to significantly increase my production with an employee, and any potential extra profit would evaporate. Along with any added headaches/hassels brought with the employee. Which I why I'm asking.

:D

rodfather
01-14-2004, 04:43 PM
Great info from jimlewis and john gamba.

I will say this and only this...I have a helluva better lifestyle now with employees than 9 years ago when I started out solo. Period

JimLewis
01-14-2004, 05:14 PM
How do I become more productive then, to make more $$ while I have that person with me? From a certain standpoint, it's not worth the hassel of adding another crewman if the profit is going to go up marginally.

You're right. One employee doesn't earn you all that much more money than you're making now. In some cases, depending on your structure, costs, etc. just one employee may not make you any more money when all is said and done.

But there are other things to consider. First thing is that the employee, regardless of whether he's making you a lot more money or not, is definitely lightening your workload. With just one helper, you're doing half physical the work you used to do. Even if the hours per day you work don't decrease, the amount of energy you put out each hour definitely will.

The second thing to remember is that although one employee may not make you a whole lot just by himself - several usually will! The concept of duplication. You may have to build up your business to 3 or 4 or 5 employees before you really begin to see good $$ coming from duplication. But it is there.

The third thing is that employees free up your time so that you can focus some of your time on expanding your business. I remember I was so overjoyed when I was finally able to hire 2 employees. Then, I had basically replaced myself. After I trained them, they were doing 90% of the work. And I was freed up to go expand the business. I could go do flyers, go give estimates, work on marketing, work on follow-ups, etc. And that's when we really started to expand rapidly.

Eventually, with employees, you reach a point where you're making more from their combined work than you could have ever made on your own just staying solo.

mtdman
01-14-2004, 05:55 PM
So the point isn't necessarily to make a lot off 1 employee, but to make things easier on yourself. The more employees, the better the return of investment, in theory?

I'm pretty much at a point where in the next few years I need to either grow the business or wrap it up. I can't bust my butt like crazy for the rest of my life, and I need to be able to create something that will raise my income as I get older, while I work less. Either that or go find another gig, and I really don't want to do that, I thoroughly enjoy this.

The insight so far has been very helpful. I think there are a lot of solo folks like me that just don't know how to figure this growth thing out and I certainly appreciate the advice. Keep it coming, please.

:D

JimLewis
01-14-2004, 07:47 PM
You got it! Best wishes to you.

BigEd
01-14-2004, 08:23 PM
Originally posted by John Gamba
Tom

I also found that i had more spring cleanups and fall cleanups= More money at end of the year AND i was able to take on more accounts because of the extra Hans. And i wasn't as tiered at the end of the day also.



Right,before I added a helper I hesitated taking on more mulch jobs,cause that was very labor intensive and hard on 1 person.During the mowing season my production went up but not as much as I thought at first, but that extra production payed that employees salary for the times I need him most(clean-ups,mulch installs)

My production went up alot on clean-ups and mulch adding another person,and thats where my money is made!

mowinmoney
01-14-2004, 11:10 PM
Could you purchase more productive equipment to increase your daily capacity without having an extra employee at this point,.

hoagie
01-15-2004, 12:18 AM
Yes GOPHER... the E-myth is a great read.

mtdman
01-16-2004, 06:45 AM
Originally posted by mowinmoney
Could you purchase more productive equipment to increase your daily capacity without having an extra employee at this point,.

That was a thought of mine as well. The next step would be to get a riding mower, which I am not sure would help on many of my residential lawns. I think that kind of machine would be better with lawns that are larger than what I am doing now. But once we get to larger lawns, once again I begin to think of adding an employee to make life easier.

JimLewis
01-16-2004, 07:14 PM
Just ordered E-Myth for Contractors. Read some reviews online first. Sounds like a pretty good book and a quick read too! Thanks for the referral guys.

Shadetree Ltd
01-16-2004, 07:45 PM
Some pretty good advice has been given. The emyth contractor book is definately a good read. I always use the philosophy that I do not want to own a job, I want to own a company.

Scott

mtdman
01-16-2004, 08:53 PM
I got the Contractors and Revised Emyths on Amazon the other day when Gopher recommended it. They look like good books. Maybe Gopher should get a commission?

:D