PDA

View Full Version : Trimming the fat


tiedeman
02-27-2004, 09:17 PM
Well, I have been thinking about trimming the fat with my business. We just moved into our new shop which has added a big budget woe. And with gas prices at $1.84 here, insurance rates increases, and the new city tax that we will encounter, I have thought about letting go my top manager. I have been thinking about bringing in another guy and training him and paying him less. I would save approx $500-$750 a month by bringing in a new guy.

I have also thought about going back to a one man operation to save on expenses and pocket some extra money. The problem that I will face is the lack of help, no free time, etc. Currently I have one full timer, one part-full timer, and one part timer that help out during the year.

What do you guys think of the situation? Have any of you run into something similar to this? And what did you do?

specialtylc
02-27-2004, 09:26 PM
With 3 employees you have a TOP MANAGER. seems like over kill.
Put the manager to work.

tiedeman
02-27-2004, 09:27 PM
well, really there are only two employees, the other is a fill in maybe like 5-8 hours a week.

GreenMonster
02-27-2004, 09:27 PM
I hope your top manager isn't a Lawnsite member:o

Has he been loyal, dependable, and helped you grow your business and be profitable? If so, the least you owe him is to make him aware now, before the season gets rolling.

Is $500 a month worth the headache and investment of the hiring process & training? Will you be able to keep that next individual happy enough to stay on board? How long until his paycheck is the same as the guy you have now?

Kelly's Landscaping
02-27-2004, 09:30 PM
If the guys is not efficient then fire him but if he is efficient what good its it to save a few dollars an hour on a new guy when the new guy is slower and takes longer to complete the job. What you need is more work and more income when I have adversity I push ahead I donít retreat I watched to many ex employers retreat them selves out of the market.

tiedeman
02-27-2004, 09:31 PM
well, the manager really hasn't been around long with me. I am the only one that made the business grow.

The story behind the pay of the manager: He was working at an appropriate wage, well I don't know if a lot of your remember that I was bought out last summer, in which he lost a job, but then I backed out of the deal. So I still had all my customers with nobody to work and I needed someone fast. The only way that he would come back would be a $1.75 raise from his current pay. So needing someone, I said yes. Well, I am starting to regret that I agreed to it.

GreenMonster
02-27-2004, 09:38 PM
Originally posted by tiedeman
well, the manager really hasn't been around long with me. I am the only one that made the business grow.

The story behind the pay of the manager: He was working at an appropriate wage, well I don't know if a lot of your remember that I was bought out last summer, in which he lost a job, but then I backed out of the deal. So I still had all my customers with nobody to work and I needed someone fast. The only way that he would come back would be a $1.75 raise from his current pay. So needing someone, I said yes. Well, I am starting to regret that I agreed to it.

Well that changes things a little doesn't it? Tough business to be paying people more than they are worth....

tiedeman
02-27-2004, 09:42 PM
exactly green man. I just don't know what to do. He's a great worker, but the whole hourly wage throws me off. I would even like it if it was reduced at least 75 cents, but I know that he wouldn't go for it. To make matters worse we just moved into a new shop, which we reallly really needed badly, and I know that he will say that if it wasn't for the shop then he would be paid the same rate.

GreenMonster
02-27-2004, 10:17 PM
Originally posted by tiedeman
exactly green man. I just don't know what to do. He's a great worker, but the whole hourly wage throws me off. I would even like it if it was reduced at least 75 cents, but I know that he wouldn't go for it. To make matters worse we just moved into a new shop, which we reallly really needed badly, and I know that he will say that if it wasn't for the shop then he would be paid the same rate.

If .75 reduction would satisfy you, is this simply a mental thing. Assuming he works a normal man year (2080 hrs) that's $1500 a year. Is that make or break? It would cost you more than that to hire and train someone else.

Can his rate be better justified by giving him more responsibility?

Your hands were tied when you brought him on last year. I guess you need to weigh all the factors and decide if they're still tied now.

tiedeman
02-27-2004, 10:22 PM
you are forgetting fed, state, unemployment expenses, as well as increase in workers comp. I think that I would be a little bit more understanding except he drew unemployment from me this winter and I have projected my rate to jump about 2 to 3% because of that.

Albemarle Lawn
02-27-2004, 10:25 PM
Hire more help and see how well he runs things.

If he is not worth his pay, get rid of him.

It would not be fair to ask him to take a pay cut for reasons like other expenses. It will backfire on you because he will "sabotage" your operation....lazy out, break things secretly, devious stuff and slacking off.

GreenMonster
02-27-2004, 10:27 PM
Originally posted by tiedeman
you are forgetting fed, state, unemployment expenses, as well as increase in workers comp. I think that I would be a little bit more understanding except he drew unemployment from me this winter and I have projected my rate to jump about 2 to 3% because of that.

Actually, I didn't. I figured being in MI, he probably didn't actually work a full man year.

I think if you're gonna keep him, the only way you can be happy is by giving him more responsibility -- make him earn that $1.75.

Or, maybe you just can't be happy with him at his current rate and the expense and headache of someone new is a cost you'll have to burden for your own piece of mind.

kootoomootoo
02-27-2004, 10:36 PM
The guy only has to sell a few accounts to make up the difference.
You can nickle and dime straight to the poor house if you become unreliable in customer eyes.

gogetter
02-27-2004, 10:45 PM
If you're only talking about saving $.75 to $1.75 an hour, it would seem there should be some other way to make that up.

Maybe something else that could be done to make things more efficient? Even just small things.

Anything that could save you time? Is there any equipment that isn't being utilized to it's fullest that might be better to just sell?

Or the opposite, is there a piece of equipment that could be upgraded to something faster/more productive?

Ask the manager to brainstorm too, and see if he has any suggestions where things could be improved upon to be more efficient (tell him his job's on the line, he'll come up with some stuff!!! LOL! J/K).

Maybe raise prices just a little, $2 per lawn. Or price ALL new jobs $5 higher then you previously would have.

I don't remember if you're licensed for applications, but if so, how about trying the PGR's to reduce trimming and edging time?

Get one of those truck toolbox/gas tank combos to reduce time stopping at gas stations everyday.

I'm just throwing out random ideas. Reason being, if this guy is good, do you want to risk the next guy NOT being so good?

Good luck. Keep us posted.

Mdirrigation
02-27-2004, 10:58 PM
Since he already experienced in lawn care , he will either go to the competition or strike out on his own.if he does the latter he already has a customer base , yours. since he doesnt have the overhead you just aquired he could go out and undercut your prices and easily make more in 2 days than you pay him in a week. The easiest way to cut cost or trim the fat would be to start at the top . Pay yourself less until you recover from the added expenses and gain more clients. The last person to take a paycheck is the owner. Employees can make or break a business losing a good employee over 50 dollars or 100 per week isnt cost effective. Where the time you will spend to place an add, interview , hire and train a replacement who may not stick around isnt worth it.

Federal express started with one mans business thesis that the teacher failed him on. One main part of his thesis Customer FIRST, Employee SECOND , and Company THIRD. Without the customer there is no need for the employee and therefore no company exists.

tiedeman
02-27-2004, 11:32 PM
Originally posted by Mdirrigation
Since he already experienced in lawn care , he will either go to the competition or strike out on his own.if he does the latter he already has a customer base , yours. since he doesnt have the overhead you just aquired he could go out and undercut your prices and easily make more in 2 days than you pay him in a week. The easiest way to cut cost or trim the fat would be to start at the top . Pay yourself less until you recover from the added expenses and gain more clients. The last person to take a paycheck is the owner. Employees can make or break a business losing a good employee over 50 dollars or 100 per week isnt cost effective. Where the time you will spend to place an add, interview , hire and train a replacement who may not stick around isnt worth it.

Federal express started with one mans business thesis that the teacher failed him on. One main part of his thesis Customer FIRST, Employee SECOND , and Company THIRD. Without the customer there is no need for the employee and therefore no company exists.

actually he can't work for any competition in a 30 mile radius for at least 9 months after termination. Policy handbooks, gotta love em

Mdirrigation
02-27-2004, 11:48 PM
very good , I use them too . Sign of a smart businessman

bastalker
02-28-2004, 03:47 AM
If you would be happy with lowering his salary .75, or $30 a week, then consider getting rid of the fill in that works 5-8 hours a week. Get him to pick that slack up, or pick up the slack yourself.

Whatever this guy was doing for you for 5-8 hours a week, I'm sure your manager can do....

GarPA
02-28-2004, 04:15 AM
at the risk of being too simplistic, look at your revenue after expenses, with, and without him. You sure dont need a layer of mgt between you and a few worker bees. Perhaps consider all part timers. We use local college students at peak season for the grunt landscape work. But they dont get near the equipment...the old guy (me) gets the easy work

Grassmechanic
02-28-2004, 08:29 AM
Originally posted by tiedeman
actually he can't work for any competition in a 30 mile radius for at least 9 months after termination. Policy handbooks, gotta love em That will never hold up in court. You can't deny someone employment elsewhere.