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buckeyes04
10-27-2004, 11:29 AM
I feel some discouragement towards the business.

I guess I just want to know that starting a lco business that it's going to be secure. I see so many lco's everyday and it makes me wonder if I can hang with the best of them. Altough I am starting out part time, I would love for it to go full time. Once you get customers do you tend to keep the same ones year after year? Then each year you add more and it keeps growing? I mean if it worked that easy than the job security would be there. Plus, I guess if you continue to market and advertise year after year you will become consistant. At least that's what you hope. Any word of advice or encourgement would be greatly appreciated.

WigginsLandscaping
10-27-2004, 11:46 AM
My feeling on this issue is that some customers will come and go. I have customers that have been with me for sometime now and some that have disappeared. Good work, good consistent work will be what makes or breaks you. Keep your prices competitive and your work excellent and you'll be fine. I found that without alot more than i mentioned that my business grew in no time. Just let it grow and mature without rushing things. Good luck.

out4now
10-27-2004, 11:51 AM
Read Rich Dad, Poor Dad or if you have little time get it on CD and listen while you drive. Business is risk. Managing the risk is what you want to do. No risk=no reward. The best thing to do is be efficient and keep hanging in there. The more business savy you are the more likely I think you are to succeed. Scrubs will always be there, nothing can really be done about it. They fall out all the time though. You can make it. Write out a business plan.You may find yourself modifing your operation from time to time. INvent some ways to drive the competition nuts. I read a book by a guy named Driving your competion crazy and it had some interesting points in it. I also had a class over the summer that a retired guy was teaching (he was in his 40's) and he said the way they got one up on their competitors was to change the process they used because the other guys could see that they had similar equipment and about the same amount of employees but what they could not see wa the process no matter how hard they looked they always looked right past it. He said the way that they screwed small competitors was to lower prices until their competitor had to be operating at a loss and then suddenly raise prices, flooding competitor with orders. The little guy so happy to finally have so many orders lost on evry single on ea nd each time he filled one stepped closer to bankruptcy. A month or two doen the line they would buy the little guy out for next to nothing. There are lots of guys here making it and you probably can too w/good work and fair(not cheap) pricing. jm.02

buckeyes04
10-27-2004, 01:22 PM
So I have to become a lowballer in order to make it in this industry? I say that with a little sarcasm, but that's kind of what your telling me. Lower prices until the smaller guy goes out of business and then raise prices. Well, I am that smaller guy trying to grow my business. I'm not in this to screw people over. I want to do fair and honest work. A smart person could have told me to lowball and then raise prices again. But why do that? It doesn't make for good business and I am not going to be one of those greedy, unprofessional, lco companys out there.

MMLawn
10-27-2004, 01:48 PM
I also had a class over the summer that a retired guy was teaching (he was in his 40's) and he said the way they got one up on their competitors was to change the process they used because the other guys could see that they had similar equipment and about the same amount of employees but what they could not see wa the process no matter how hard they looked they always looked right past it. He said the way that they screwed small competitors was to lower prices until their competitor had to be operating at a loss and then suddenly raise prices, flooding competitor with orders. The little guy so happy to finally have so many orders lost on evry single on ea nd each time he filled one stepped closer to bankruptcy. A month or two doen the line they would buy the little guy out for next to nothing. There are lots of guys here making it and you probably can too w/good work and fair(not cheap) pricing. jm.02


If that guy took credit for that then he lied, because all he taught you was the Wally World Model. What they do and all this was is a varation of that, is they start buying product X from XYZ Company and they slowly boost their orders to a level that X company drops all primary accts ect Wally. Then when they do that Wally says, uh we cannot continue paying a $1 a pc for that widget we will only now pay .75 for it and BAM X Company is stuck and must drop the price to Wally or go out of business.

Buckeyes, no you do not have to lowball at all to gain business. Just give a fair price and quality work.

buckeyes04
10-27-2004, 01:50 PM
Thanks I appreciate it.

JacobsLandscape
10-27-2004, 02:12 PM
:) If you do honest, hardwork and give people the quality that they expect then good customers will come. You will lose some... but you may replace them with even better customers. I felt the same when I started last year but I always try to remember this....Do not work for nothing cause nothing pays the bills. Here is another...Work smarter not harder. I would much rather have 20 $40-$50 a week accounts than have 40-50 $20 accounts.

Can I get an AMEN !!! :D

Gravely_Man
10-27-2004, 02:42 PM
In the perfect world you bid each job at the correct amount and you never lose clients. This means you just add new customers each year until you reach your saturation point but your quality is still at a very high level. Since this isn’t the perfect world you will lose some customers, hopefully the ones that are just switching to the “cheaper guy” and quality issues are not arising. You have to do a high quality job at an affordable price. Don’t give up and work hard.


Gravely_Man

pfifla1
10-27-2004, 03:32 PM
i think staying in the middle, showing up when you say, and keeping your head on straight you will be successful, recently i lost a few clients due to various reasons not stemming to me, and i do this part time while finnishing up my masters, so it was a good hit to me, but recieved 2 new clients this week, you will be fine as long as you know what you are doing, you cant start out as a big dog you get there over time.

fga
10-27-2004, 03:42 PM
you are always going to lose some. for any reason. I've lost plenty over the years, some my fault, others not. If you are looking for stabilty, just have to know when to make certain decisions, when to step up, when to do extras...

i once thought it was all about honesty and hardwork... then i realized how insane people can be, how they will with hold a nickle if you let them. I've been burned a few times after doing honest and good work. now i try and look at it more as a business, or atleast i'm trying (see current thread of mine..).

grassyfras
10-27-2004, 03:56 PM
I'm finding its all about sales. Have a sales plan. Example mow for really cheap, but make them use so many other services that are higher priced. Its sort of like spending 5 bucks on a mixed at a bar when food is 5 bucks too. I dont do this but I;m trying similiar things out such as this. What burned me in the past was showing up to lawns not needing to be cut or customer thought it didnt need to be cut. Then your out of a cut. Those cuts add up, make your lawns look worse and causes more time against you next time you are there. Find a way around this, come up with a sales goal, do what you say your going to do.

out4now
10-27-2004, 04:17 PM
So I have to become a lowballer in order to make it in this industry? I say that with a little sarcasm, but that's kind of what your telling me. Lower prices until the smaller guy goes out of business and then raise prices. Well, I am that smaller guy trying to grow my business. I'm not in this to screw people over. I want to do fair and honest work. A smart person could have told me to lowball and then raise prices again. But why do that? It doesn't make for good business and I am not going to be one of those greedy, unprofessional, lco companys out there.

You don't have to do that, it was only an illustration of business tactics. THe guy that told us about it was teaching us theory of constraints. Actually he did use Wal-mart as an example but they were in a munufacturing sector. Not all business ideas aplly toeveryday situations. I was trying to illustrate how a company bigger than you can do you in. It's an old trick as said, don't fall for it. Do fair and honest work just be leary of what your competitor is up to. That's all. It's a low barrier to entry market with high elasticity in demand. What I'm telling you is stick it out over the long haul. It would help to have some stockpiled cash ready or some form of investment to subsidize income in tighter times. Sorry if I confused you.

Soupy
10-27-2004, 04:25 PM
If the demand is low for LCO's in your area then you might want to rethink getting started. You wouldn't open a sandwich shop if there was a subway on evrey corner already.

I suggest you start off small. Don't run out and buy equipment until it is needed. Grab a push mower, trimmer and blower and see were that takes you. If the demand is there then you can grow as you go.

karen1122
10-27-2004, 05:58 PM
out4now,

Interesting observations regarding the market, business strategies and tactics. Although, I believe that the dynamics may be better explained by looking deeper at the different market segments. Trying to make sense of the characteristics of several distinctly different segments can be very confusing and may be the source of buckeyes04 desperation.

The overriding characteristic of the LCO market is that the barriers to entry are so low. Every kid with his family's lawn mower can be competition. More importantly they can be a defining feature of the "Low Price" segment. Here the focus is heavily weighted to cost. Anything above a service level of a cut is generally outside the segment.

Don't get me wrong as there have been many very successful businesses built to address this segment (i.e. Walmart, Home Depot and even several of the high volume LCOs who post here). The overriding focus of the business is to attack these customers with a low price, a minimally acceptable service level and do it profitably. Customers who require a higher service level are not likely to be happy and will switch to another supplier. Alternatively, the risks are that another supplier will undercut the price and take the business. For this reason these business must do everything it can to minimize its costs: minimum direct costs, efficiency in execution, low overhead, efficient processing of receivables, etc.

The second prevalent segment is the "Value" segment. Here customers are looking for more than just a cut. They can value additional services like: consulting advise, one-stop-shopping, top-noch quality, flexibility in scheduling, etc. Generally, customers in this segment are willing to pay for the higher level of service and are more loyal in the long run.

buckeyes04 - now comes the tough part; deciding which segment you want to serve and acquiring customers who fit your business plan. On your side, it is very hard not to try to do it all because you see an opportunity to make quick cash, but in the long run this will kill you (too high of cost to be competitive in the low cost arena and too little service to compete in the value segment). On the customer's side it is even worse as it is very difficult to put a customer into a single bucket and once they are there many tend to temporarily vacillate back to the other segment.

Sorry for the long post which is actually an oversimplification of the LCO market. In short - pick what you can be the best at, work hard and stay the plan.

lawnworker
10-27-2004, 07:18 PM
In some markets one can get all the work they want. This means lots of man hours and employees. Many have found they make just as much or more working solo.

The business takes awhile to learn and grow. even if your just mowin, learning to read peoples personalities will go a long way in your success.

After some years, you can choose customers that are easy to deal with.

blair smock
10-28-2004, 10:01 AM
Just read your post last night, Just for fun, when I came into work this morning (full time job) I decided to count how many LCO's were on the road on my way in. I counted 23 trucks with trailers and equipment=Mainly stuff looked pretty beat to hell but commercial equip. Also 2 cars with trailers and a pickup truck with a walkbehind. This was about 30min worth of driving, from westerville to columbus. I guess my point is their are a heck of alot of people in the biz in OH. I my self am part time, ended up having surgery on my shoulder about a month ago and was happy that I still had my desk job. Next year FULL Time (one handed for awhile) and I can wait. Do good work, show up on time and always try to be fair, let me know if I can be of any help! Blair

stizostedion_vitreum
10-28-2004, 11:59 AM
Karen's post hit home for me. I believe the majority of failures in business are caused due to a business' failure to identify exactly who/what they are marketing. There are huge differences between mowing a lawn and servicing an account. All I'm trying to say is identify what/how your company will specialize and market the heck out of it.

snippy
10-28-2004, 12:00 PM
I counted 23 trucks with trailers and equipment=Mainly stuff looked pretty beat to hell but commercial equip. Also 2 cars with trailers and a pickup truck with a walkbehind. This was about 30min worth of driving, from westerville to columbus. I guess my point is their are a heck of alot of people in the biz in OH. Blair


I can't beleive I get any work at all the amount of people I see in my area mowing lawns, from franchisees to Grandpa with his trusty old mower hanging out the boot, we've got dozens of them, it must be a huge market around here thats all I can say :confused: