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Soupy
03-09-2005, 03:31 AM
There has been a lot of talk lately about how low prices/quantity as being profitable. I have said that low prices are bringing low profit for many companies in the green industry. Most of this talk is related to the mow only side because that is what most are trying to do lately.

I would like to get some friendly discussion going on this topic. What are some of you guys thoughts on this.

I will start by saying my previous mentions of low profit caused by low prices is a little out of text. I know that company (A) with many low profit lawns can gain more net profit over company (B) with a lot less high profit lawns. But I would like to discuss the idea realistic. Do you guys think a new, or fairly new company (or even a small established company) can create/gain such a high quantity of lawns in todays market using low prices? My answer would be no and this is were my suggestion of low prices brings low profit came from in previous threads.

The reason I say No is because the market is saturated with guys mowing and offering low prices already. You can not come in and build such a large customer base on low prices unless you go even lower. That brings the question of how low can you go? And how many customers do you need based on these low prices to make it worth it.

Lets hear your thoughts on how low prices can be profitable in todays market. Remember, I am talking todays market, not 20 years ago. So we can leave comparisons to past companies out. I personally don't know any large companies in my area that charge a low price. The low price guys in my area are the guys working on the side, or retired men supplementing their income. Most don't stick at it very long. But long enough to keep prices down.

Turf Dancer
03-09-2005, 03:41 AM
This thread leaves to much unasked. Most of the residential lawns I service are average for here, they take 25 to 30 minutes with a 21" mower. There are a few under the table guys who keep prices low they are doing these lawns for $12 to $14 so it is hard to get $20 to 25 for them even if you are legitimate.

Soupy
03-09-2005, 03:56 AM
I know I left things out. I want it to be a discussion and not just a question. If you think it is/not possible give some brief comments on why. I was going to add that we should base this scenario on 8K lawns etc. But thought I would leave some things up for discussion.

What size lawns are average for you? I guess a low price outfit using only 21" mowers would go after the under 10K lawns to keep profitable with labor rates. don't know, because I don't see it happening. I guess they could go after larger lawns with larger mowers and lower rates. Larger lawns would probably be the idea market actually because competition is slightly smaller. But there might not be enough of these large lawns in an area to meet the quantity criteria.

What do you think a company would have to price your 30 minute lawn at to gain a large amount of customers. Lets say 2000 at least.

Turf Dancer
03-09-2005, 04:13 AM
2000? Well there are about 4500 houses in this town! So to get 2000 would be impossible! For the record most of the residential lawns are around 3000 sq ft. and they are all bagged! No mulching here, I am going to switch all new customers to mulching and all my commercials are going to be mulched this year also. That should help keep costs lower. Less trips to dump. I am setting my minimum to $20 this year.

Soupy
03-09-2005, 05:00 AM
This thread leaves to much unasked. Most of the residential lawns I service are average for here, they take 25 to 30 minutes with a 21" mower. There are a few under the table guys who keep prices low they are doing these lawns for $12 to $14 so it is hard to get $20 to 25 for them even if you are legitimate.

This is part of why I think it is impossible to compete with low prices on a large scale. There was a thread last weak about the need to raise rates on current customers. A couple of guys said that they didn't think we needed to raise rates and can make up the profit from low prices by being more efficient and gaining more customers.

With guys like you mentioned (and they are a dime a dozen) how does one gain a large quantity base. With all the lawn companies out there already charging bottom prices where are all these customers going to come from? Remember I am talking about many customers. I still believe that a strong business will survive on a smaller scale with high profit prices.

Eho
03-09-2005, 11:55 AM
I think that a good mix would be the ideal situation for a company. Example: I've seen people say you can mow 30 lawns at 50 dollars or fifty lawns at 30 dollars and make the same amount. I see ther point, but you have to have the ability to be very selective to do this. Like I said, you can be profiable either way( with a lot of small, cheaper accounts, or with fewer bigger, more expensive accounts) I say as long as you are mowing as many as you re capable of, the size shouldnt matter. Just charge what you feel is appropriate for the size of the lawn. The ideal situation is to have enuf business to be selective about choosing what type of lawns you want.
EHO

lampeslawnservice
03-09-2005, 12:24 PM
Yeah the low priced competition is driving our prices down. The unemplyment here in southeast Iowa is really bad. Factory after factory shutting down. In a town of 30,000 with one or two good factory jobs left, everybody is going to wal-mart and hauling around mowers in the trunk of their car. Nothing against them, because they can operate that way. Me I have comitted to my prices and have to convince homeowners why they should pay a higher price for their lawn care. It's frustrating, especially when people don't see you trash a spindle, clean out decks, sharpen blades, and all the other fun stuff after you leave their house.

lampeslawnservice
03-09-2005, 12:25 PM
By the way I have not let my prices slip!

Randy Scott
03-09-2005, 01:02 PM
Personally, low-dollar pricing is for the guys who couldn't succeed on quality work and salesmanship. Their last desperate attempt is to gain market share by cheap prices and cheap service.

Apparently it works for some and I guess it is profitable for them. Unfortunately, for me, as hard as I would try, I couldn't do that. Quality and being the best has been in my blood my whole life. I couldn't mentally be known as the millionaire company of poor quality. Sounds whack, but my pride would get in the way.

Mo Green
03-09-2005, 01:06 PM
Personally, low-dollar pricing is for the guys who couldn't succeed on quality work and salesmanship. Their last desperate attempt is to gain market share by cheap prices and cheap service.

Apparently it works for some and I guess it is profitable for them. Unfortunately, for me, as hard as I would try, I couldn't do that. Quality and being the best has been in my blood my whole life. I couldn't mentally be known as the millionaire company of poor quality. Sounds whack, but my pride would get in the way.
I feel the same way. I have a hard time not doing the best I can.

Soupy
03-09-2005, 03:09 PM
Good post guys. But you have not answered the question. Do you think it is possible in todays market to build a lawn service built on quantity? We all understand how one theoretically could profit from this type of business model, but can it be done today?

My goal here is to open some eyes, maybe mine. My thought of the week is that the market is saturated. I know, I know, we have known this for years, but it gets worse every year. Will the day ever come when someone realizes that there is no market/demand left.

I'm focusing on the company that wants to be serious and build. I understand that we will always have guys jumping in every year to make a few bucks to supplement income. But, can a serious individual survive in todays market on a low price quantity plan? Do they have any real chance of surviving with any plan if starting from scratch? If so, what advise would you give them?

bobbygedd
03-09-2005, 03:17 PM
why can't u guys open your eyes, and see what's going on all around you?

Soupy
03-09-2005, 03:25 PM
why can't u guys open your eyes, and see what's going on all around you?

Would you like to tell us something Bobby? The whole point to this thread is to open some eyes. I know what's going on around us, and that is what I want to talk about.

I could have just spilled my thoughts and been done, but I want this to be a discussion and not just me throwing my own thoughts out. People tend to enjoy a conversation when more then one person is doing all the talking.

bobbygedd
03-09-2005, 03:30 PM
mr. soupy, what is going on around us, is that businesses in fact are making billions with the low price, mass quantity concept(mcdonals....), BUT, they are doing it, by offering an inferior product, for this dirt cheap price. don't think for one minute, you can offer top quality, at a discounted rate, and make it.

Randy Scott
03-09-2005, 03:32 PM
Apparently it works. There are plenty of people out there where price is the only thing that matters. They realize you get what you pay for. I also think it will be dictated by certain regions and markets. Whoever that guy is on this website that does all the mowing for cheap prices is successful. I can't think of his name or company. Sounds like he's doing fine.

It's just not for me.

Flipperneck
03-09-2005, 03:32 PM
OK so you get 150 Lawns for 30 bucks instead of 100 for 45 bucks. You push your employees harder and pay less and you have a 50/50 shot they show up every morning. Do alot more paperwork and have alot of cheap customers that try to squeeze as much out of you as possible. Your equipment fails that much sooner so a larger chunk of your profit goes to equipment. When the grass is out of control you either do a horrible job or their isn't enough hours in the day thurdays route is getting mowed the following wednesday its even long takes you longer. Whats my profit margin now? How many customers fire me? This isn't a all adds up on paper kind of business. The higher price is the insurance that you don't go down the tubes.

promower
03-09-2005, 03:33 PM
The way I see it is the more customers you have the higher your cost to run the company. Dealing with quantity rather than quality you would have to run a very fine line. The goal for quantity based companies is generate a little profit from from several accounts and vice vera for quality based companies. It can be done but it takes a very smart business man to make the plan work. People jumping into this work with no previous business expierence or strong business plan and think they can just go for quantity will probably fail. Quantity based comapny can make just as much if not more profit then a quality based company, but it takes a a lot of planning and number crunching. The work may be the same but in reality it is 2 completely different companies doing business with different goals in mind.

CRM Lawncare
03-09-2005, 03:35 PM
Spoke to a guy I cut last year this weekend. I cut his acre lot for $45.00 (basic mow, blow & go). He told me he had hired a guy to cut the lawn for $20.00 a cut. He said that the guy used a craftsman push mower and he was there about 3 hours total. I used to be in and out in about 30 minutes. The homeowner asked me how this guy was gonna make any money. I told him he wasn't and to go ahead and start looking for someone else. This is one reason I quit the business. Tons of these guys in my area with middle class folks who don't care as long as the grass gets cut.

In my neck of the woods, quality doesn't matter just price.

DFW Area Landscaper
03-09-2005, 03:41 PM
I think it is possible to build a service on quantity. The number one problem I've had the last two years, and several other LCO's in my area face, is an empty schedule. I met several LCO's last year who only had enough work for Thursdays and Fridays.

If you've got the revenues, things should take care of themselves. Advertising. Advertising. Advertising.

If you can't find the money for advertising, it's gonna be tough in any business. Since we can't count on our location to bring in new customers, we have to rely on advertising.

Later,
DFW Area Landscaper

Fantasy Lawns
03-09-2005, 03:44 PM
Actually one of the biggest cost goes down (percentage wise) with more sales .... ==> Overhead

You may decide to increase some cost but these are off set with larger sales .... ie right now fore me I could run up to 5 crews out of my present location but the monthly lease is the same .... my yellow page ad (if I kept it at the present size) would eat up a smaller percentage of my total gross

There is also savings in some "In direct cost" when you buy in volume you have a greater ability to "negotiate" a lower price ie 2 cycle oil by the 55 drum .... fuel bought at 1000 gal a time ... uniforms purchased by the gross ....etc

I'd say Walmart is the best example of volume discount pricing .... n alot there product is OK fore normal daily usage

Soupy
03-09-2005, 04:16 PM
More great post, and a couple are understanding this thread. But some of you are talking about how quantity base business can work. We all know that. But can it work in the lawn business in your area?

Walmart, McDonald's etc are apples and oranges. They started many years ago and is totally different kind of business.

If prices are at a all time low in your area. Can a company come in and snag up enough customers to succeed as a quantity base lawn business?

Also, premium service isn't the issue. How does one gain enough customers when there are 50 other guys offering the same service at the same unbelievable low price. How would this quantity base lawn business get enough of that market to make it worth while?

Another way to look at it, would be if you decided to drop your current plan and go for quantity do you think it would work? Forget about quality or the fact that you wouldn't want to do anything but the best job. Hypothetically, could you gain enough customers to make it worth it?

I would like to use Fantasy Lawns as an example (I hope you don't mind). He runs 5 crews and I'm guessing has a few hundred lawns or so. Lets say he charges a premium price but does an average job that is acceptable to his clients (I'm not suggesting he does any of this, but using his 5 crew as the example) he has a very high profit business ran with an acceptable amount of effort. He is getting a good return on his money/time invested. Can a quantity base business come into his market today and build a more valuable business by trying to compete with the lower prices? Basically can one get the number of accounts needed at the low price to give an acceptable return on money/time invested.

I also want to clarify that it isn't about the biggest net profit at the end of the year either. Like the other member mentioned the added work load would bring the overall value down. A company cutting 2,000 lawns at $1 profit would make more money then one cutting 900 lawns at $2 profit. But which would be more valuable (offering the best return on money/time)?

Also, someone mentioned a guy on this forum that has a couple of thousand customers. I am assuming he is talking about justmowit. Let's just assume justmowit gets a good return on his time/money invested. He has been doing this for awhile. Can a company copy that today in your market.

By now you should all know were I am going with this thread :)

DFW Area Landscaper
03-09-2005, 07:09 PM
Soupy,

It all comes down to two variables: Customer Acquisition Costs and Churn.

Your customer acquisition costs are going to be a lot higher with a higher quality service. There is almost no way, at least from what I've seen, to sign a home owner up to a long term deal where you automatically bring in seasonal color, mulch the beds every so often and trim the shrubs every so often without doing an in-person estimate. That in-person estimate is very expensive. Even if a solo operator is doing this himself, it's still costing him time away from his family. Once he tries to grow the business, he'll have to hire a person who can speak fluent english, do accurate estimates for labor and materials and close deals. That won't come cheap.

If the churn rate within the customer base is extremely low, I think a landscaping company could probably make this work. However, if you start getting cancellations after you've invested that much to provide a higher quality service, you're in trouble.

In my area, the demographics don't favor the high quality, automatically maintain everything, service offering. Most of the homeowners in my area are in their 30's and 40's. The number one reason I lose customers is due to homeowners deciding they're going to start doing it themselves (because they've just roped themselves into a new car payment). They're also very likely to sell their homes so they can chase their paycheck across the country. The vast majority just don't have time to mow the lawn. They want to outsource that. But they will mulch the beds and trim the shrubs themselves.

If the demographics were older people, in their 50's+ and with some degree of wealth, the high quality, do everything automatically when it needs it business model might make a lot of sense.

I'm trying to be flexible enough to service both types of accounts. It may not work out in the end. Time will tell.

Later,
DFW Area Landscaper

Flipperneck
03-09-2005, 07:23 PM
Yeah it pretty much comes down to whichever one would benifit you in your area. I've always worked for people that did full service in high end residential neighborhoods and was paid well. Other people I've met that worked for the quickie mow and blow companies tended to make alot less and where the kind of guys that disappear for three days and come back to work smelling like booze with a black eye and a court date.

Turf Dancer
03-09-2005, 08:27 PM
I think to an extent this is possible. There is a guy one town over that has several blocks. He used to have one block where he had like 20 of 22 houses on it! It took him 3.75 hours to do all of them and bagging at that. He got $18 a piece for them. $96 an hour on volume 1 guy. That is very good for this area. Heck I have days that I don't do that dollar amount. Sometimes you have to find a niche, he did and he stays busy and makes a good income for this area.

Soupy
03-09-2005, 08:29 PM
DFW, I mentioned that this was focused on Mow only. Lets forget about high quality, or full service. Lets focus on a mow job that pleases the customer in your market.

The whole point I am trying to discuss is, Is there a demand in your market to pick up large quantity of lawns period?

I understand completely how a low price quantity business plan works. But can it be done now in todays market? With prices already hitting bottom and beyond, how can a business plan like this work?

Bobby mentioned the low, low price scenario by offering a whack mowing, with trimming once a month in the front and once every 3 months in the back (I think that is what he said). Is there a big enough demand for that to gain large quantity?

I'm afraid to mention a # of customers to be considered large quantity, because there is to many variables. I for one don't know how many one would need to benefit. I'm guessing a couple thousand and that would have to be achieved fast to stay profitable and not lose to much on initial investment.

I'm really wanting to focus the possibilities of getting into this business today and trying to get enough customers by offering a low price (because that seems to be the only way to gain customers fast). Compared to the bulk of LCO's that have been in it for many years and have built a nice customer base on good paying cuts. Like the guy doing a few hundred customers charging $35+- on 10K lawns. Or even the guy cutting 5K lawns for $25. Can a company go in and compete against the many small companies offering the same 10K for $20+- and the 5K for $12+-.

I am focusing on this business plan because it has been mentioned that this is the way to go lately. But how? How are they gaining the large quantity of customer? What are they going to offer that all the other companies are not to gain all these customers.

Come on, you guys have got to get were I am coming from. Is there any market left in your area????? The low price customers have a million companies to choose from.

Also when I say I am focusing on this plan. I mean in this thread as the focus of topic. I am in no way looking for answer to try to implement this plan. I know that it would not work for me in my market. I just want you veterns to talk about if you think it can be done today in your market. Could you if you wanted gain a large quantity of customers without loseing money or making such a low profit it wouldn't be worth it?

bobbygedd
03-09-2005, 08:35 PM
my "level b" service plan allows you to take on all commers. you will have a product for everyone. if the client does not want to spend $30-$35 a week for a level A job, then offer them level B service for $18 or $20. the level B service would also eliminate the need for a helper on those properties (no wacking or edging) and you'd be able to do more of them (fatigue factor cut down to less than half-no wacking or edging) and would eliminate the need to dismiss certain clients.

Soupy
03-09-2005, 08:48 PM
my "level b" service plan allows you to take on all commers. you will have a product for everyone. if the client does not want to spend $30-$35 a week for a level A job, then offer them level B service for $18 or $20. the level B service would also eliminate the need for a helper on those properties (no wacking or edging) and you'd be able to do more of them (fatigue factor cut down to less than half-no wacking or edging) and would eliminate the need to dismiss certain clients.

Yea, I knew what you meant and how you would use it. But in this thread you mentioned it, and I took it you thought that someone could use it for quantity. Theres no doubt you will gain customer in that market to add to your other customers, but I want to know how someone new is going to benefit by getting into lawn business today?

OK, I said it. How are these new guys going to survive? If I won the lottery and had millions to invest. Would it be smart to get into lawn care now and setup the biggest dam operation money can buy. Would I be able to gain enough customers in any given market easily? Or would it be a big crap shot. Or would I go for the few hundred customers paying well and have a nice little profitable business? Or would I say the hell with lawn care the market is saturated and I would have better luck opening a different business. I know, you all would invest and sit back and take it easy, but that would not answer my question.

bobbygedd
03-09-2005, 08:50 PM
if u won the lottery and had millions, why work?

Soupy
03-09-2005, 08:58 PM
I wish Walker-talker would post his thoughts on this. He has a great ad campaign (at least I think so) and is trying to gain at least 27 new customers this year so he can go full time. I wonder if he thinks a company in his area could gain a large quantity of customers today and be profitable doing it?

tinman
03-09-2005, 09:35 PM
Soupy,

I think a new guy could jump in & do well even with ALL the LCO's running around town., IF he does his homework & advertises efficiently. In other word, wastes no money on stupid ads and takes advantage of all "free advertising". People are always looking for a new lawn guy because the guy who used to do it got sick, stopped doing lawns, died, moved, I lost his #, etc. So he who advertises & markets well will find enough clients.
I'm trying to focus more & more on marketing....tracking every call, getting out as many fliers as possible, upselling, etc.

Soupy
03-09-2005, 09:49 PM
Soupy,

I think a new guy could jump in & do well even with ALL the LCO's running around town., IF he does his homework & advertises efficiently. In other word, wastes no money on stupid ads and takes advantage of all "free advertising". People are always looking for a new lawn guy because the guy who used to do it got sick, stopped doing lawns, died, moved, I lost his #, etc. So he who advertises & markets well will find enough clients.
I'm trying to focus more & more on marketing....tracking every call, getting out as many fliers as possible, upselling, etc.

How much do you think a company would need to start a business in your area? Marketing, equipment, etc. Would you invest that money in lawn service, or do you think there would be better opportunities out there?

tinman
03-09-2005, 09:59 PM
How much do you think a company would need to start a business in your area? Marketing, equipment, etc. Would you invest that money in lawn service, or do you think there would be better opportunities out there?
Maybe $7000 or less if they focused on very small lawns. This is not counting a truck which most guys already have.

Have to admit I would focus on a different business just because of the # of LCO's running around. Still a service type biz but one without so much competition & a service that pays more per "stop"-----pressure washing would be my choice probably,

Soupy
03-09-2005, 10:19 PM
Maybe $7000 or less if they focused on very small lawns. This is not counting a truck which most guys already have.

Have to admit I would focus on a different business just because of the # of LCO's running around. Still a service type biz but one without so much competition & a service that pays more per "stop"-----pressure washing would be my choice probably,

$7,000? your market must be good, because I would say a minimum of 10 grand just for marketing. But I am assuming you are talking about starting a business aimed at high priced lawns working solo or with one helper. Because you mentioned that only one truck would be needed. I am also assuming your $7000 leaves little room for equipment bigger then 21".

You have had experience working a lawn service, but yet you say you would not start one today. Your previous post implied that you thought it was a good idea for a new guy to start one. I'm confused. I'm guessing you don't think today it would be very profitable to start a business, but one could create a good job for themselves.

newbomb
03-09-2005, 10:21 PM
I have been around the towing business most of my adult life. This business is faced with this delema as well. For years, I have watched bargain tow companies come and go, charging $35 for a tow any reputable shop would charge $60 for, until of course they go under. Doing a lot of work at lower prices only gets you worn out equipment, broken bodies, no help, and little profit. Mowing 60 lawns versus 30 lawns is double wear and tear on equipment and people, regardless of any profit margin.

In some areas of the country, the demand for reputable mowing companies may be low. This then, would not be the place to open a mowing business. All markets have cheap customers who want something for nothing. In most markets I believe there are enough people who are willing to pay fair prices for good reliable service. Let the cheapskates hire the low ball companies. The cheapskates will then be out of business soon enough and reputable companies don't have to deal with cheap customers

The lower price higher volume theory is a poor business model for any trade. The large retailers buy direct and get volume discounts from manufacters. In any trade you will not get a discount on fuel ( you could buy in bulk but not for an operation with less than 100 lawns a week), no discount on insurance, no discount on equipment repair, no discount on uniforms, no discount on medical, etc. The point is, in this line of work you pay through the nose for all your operating expenses. If you do more work, it costs more to operate. If you do more work cheaper your profit goes down. When your profit goes down, you cut corners. When you cut corners, your reputation suffers. When your reputation is ruined, you go out of business.

Build a reputable business on fair market prices. If your area won't support that, do something else. If you want to prove a point by having the most customers, work cheap and get them. You will have a great story to tell at the next place you work.

hortboy
03-09-2005, 10:22 PM
My company has many low priced lawns and I'll tell you why I have 3 property managers on my books . 1 gives me 50 accounts. 1 gives me 25 and the last one about 15. That is a total of 90 accounts. The prices range from $13.00 to $35.00. Now keep in mind these are multi family rental units. A $13.00 lawn will be done in 10 mins and we can often get 5 done an hour. All these 90 accounts take myself one other guy 1.6 days to do. So you guys to the Math. Our drive times are kept to minimum and they are grossing me almost $2300.00 for 12.8 hours multiplied by two men. That equates to $89.84 per hour worked. So I believe if you find a niche and can do lawns for rock bottom prices and make money at it legally than do it. This is a capitalistic society.

Soupy
03-09-2005, 11:29 PM
My company has many low priced lawns and I'll tell you why I have 3 property managers on my books . 1 gives me 50 accounts. 1 gives me 25 and the last one about 15. That is a total of 90 accounts. The prices range from $13.00 to $35.00. Now keep in mind these are multi family rental units. A $13.00 lawn will be done in 10 mins and we can often get 5 done an hour. All these 90 accounts take myself one other guy 1.6 days to do. So you guys to the Math. Our drive times are kept to minimum and they are grossing me almost $2300.00 for 12.8 hours multiplied by two men. That equates to $89.84 per hour worked. So I believe if you find a niche and can do lawns for rock bottom prices and make money at it legally than do it. This is a capitalistic society.

This thread isn't about what the current companies are doing. But since you brought it up I will try to fit it into this thread. Property managers would be a good way to get started. But that is not enough to fill a schedule. That is good money for that 2 days but what about the other days. What happens next year when they lose their 3 prime customers to the guy offering $8 a pop. I used to work for property managers too. I know that most go up for rebid every year no matter what.

Yes, if someone could land 3 customers like you have then that would be a great start. Someone with a lot of connections would do well starting today too. I know a guy that is a Shriner's (sp) and gets all his work from that and keeps real busy.

hortboy
03-10-2005, 09:36 AM
Soupy, You correct to some degree. My personal mission w/ all my customers is open lines of communication. I have had these prop. managers on my books for 3 years and every year a 1.5% price increase. The key is when something is out of the ordinary, like garbage spilled from cats or dogs , or broken window or tenants parking on the lawn, you call them and inform them of the situation. Your maing there job easier and it shows you care. There are may nights I spend an hour on the calling customers just to report findings and it often leads to new service sales. You need to become personal w/ your customers so they aren't firing my company they are firing me.

DFW Area Landscaper
03-10-2005, 01:00 PM
Soupy,

Not sure what you mean by high quality mowing and low quality. If you do a low quality mow, which I would say is doing things like blowing clippings into the street and causing trimmer blight and not fixing sprinkler heads you break, your customers are going to cancel. They don't think to themselves, "well, it's a cheap price, so I shouldn't expect them to disperse those clippings piled up all over the lawn". You've got to provide a good enough service such that customers don't cancel over quality no matter what you're charging.

The biggest difference I can see between what some may consider a high quality service and low quality service is the crew's ability to speak english. But that usually leads to customers asking you to do things that aren't included with a $20 cut anyway, like "please use a broom on the front porch because your blowers are causing dust to enter my home". Or them asking for free advice. Or the old folks expecting to visit with the lawn guy for 10 minutes every week yo break the boredom of their lives. Schit like that.

BTW: If had it to do over again, I think I would have cut my losses at the end of last season. I've put $80K into the business this season. If I were to invest that kind of cash in a small business today, I think I'd look real hard at the auto repair industry. Those guys are getting $75 to $85 per man hour of book time. Good mechanics can finish jobs in half the book time, so they're grossing over a $100 per hour. They're never asked to drive out to a customer's home to do a free estimate either.

Later,
DFW Area Landscaper

Soupy
03-10-2005, 01:37 PM
Soupy,

Not sure what you mean by high quality mowing and low quality. If you do a low quality mow, which I would say is doing things like blowing clippings into the street and causing trimmer blight and not fixing sprinkler heads you break, your customers are going to cancel. They don't think to themselves, "well, it's a cheap price, so I shouldn't expect them to disperse those clippings piled up all over the lawn". You've got to provide a good enough service such that customers don't cancel over quality no matter what you're charging.

The biggest difference I can see between what some may consider a high quality service and low quality service is the crew's ability to speak english. But that usually leads to customers asking you to do things that aren't included with a $20 cut anyway, like "please use a broom on the front porch because your blowers are causing dust to enter my home". Or them asking for free advice. Or the old folks expecting to visit with the lawn guy for 10 minutes every week yo break the boredom of their lives. Schit like that.

Later,
DFW Area Landscaper

DFW, I will have to go back and read my post, but I don't think I mentioned Quality. I did say that a company would have to provide a quality that suits the customer for the price. But the main discussion is can a low price/quantity business model work in an industry that already has low price? Can a business using this plan obtain enough customers to be worth it. How can they gain the amount of customers needed when there are many guys offering low prices on a smaller scale just to provide a $15+- job for themselves? That is what this discussion was suppose to be about, but not to many caught on to that. I guess that is my fault for having poor INTERNET communication skills? I don't know.

I just wanted to get some discussion going and it isn't no big deal. I thought it would nice to get views on this just because I have been reading post about competing by quantity. One thread a guy suggested that we do not need to raise prices to offset inflation, but rather adapt and and more customers and efficiencies. Other thread mention talk about doing something like what Justmowit does too. I thought we would discuss what the veterans in this industry thought about those ideas. Can a new company copy justmowits ideas or is it to late for that. By the way justmowit is a good example because he claims to offer a quality job at an affordable price. I didn't want to drag his name into this though. But could a company get 2000 customers in a couple of years time by not going to far down on prices and not making it worth doing?

I also want to add that there is no correct answer. Different areas will have different results. I just wanted to get a discussion going about the idea and do you think if it would work in your ara. I said no, but I don't live in a huge city with 2K lots etc. Someone else might think it isn't to late and would work.

It's kinda like with Walmart. Can a company successfully come in and compete on the same level? I think not, they have missed that boat, but they can come close by offering a slightly higher price and a little better quality. But no one will survive trying to beat walmart at the low, low price game. So that bares the question. Is it good to go after quantity/low price, or go after higher price customers that care more about just price. A company like this would work on a much smaller scale. The low price scenario would need a larger market that I am not sure is available.

By the way, I guess I can see were you keep getting the quality issue from. The higher priced lawns would defiantly demand higher quality. But lets focus on just getting the job done. Is there a market for either low price/quantity, or high-price with less quantity and operating on a small level in any markets today?

Sorry for repeatedly asking the same questions over, and over. But it doesn't seem like you guys understood the questions I am asking. Maybe I should have started a simple thread with a poll asking if there was a market left in your area. But I wanted a discussion that might benefit people reading it. I'm not saying either way that all markets are used up or not. That is what I want to discuss.

Just trying to change things up a bit from the same old threads discussed day in and day out.

PTP
03-10-2005, 02:06 PM
Soupy, Interesting thread.

Yes, I think that a company can build on quantity and acceptable quality.

I think that marketing makes all of the difference. If you only charge $1 per mow and don't tell anybody, the low price won't help you to gain any customers. But, if you know your numbers and can offer a reasonably low price, then you have a good chance if you do the marketing.

Since someone mentioned justmowit, I believe that he spent $75,000 last year on marketing. You don't get 2000 customers by handing out 200 flyers and then waiting for things to happen.

I think that it can be done if you offer the customer what they want and charge a reasonably low price to serve them and continually put this offer before them.

jayandlo
03-10-2005, 02:12 PM
There is room for both the quality and quantity type of Lawn Service. The key is demographics. What I mean is this. If you're constantly running into low ballers stealing your accounts, then you are working in the wrong areas. You have to target the area that you market to by the cost of their home. As you go up in home cost you'll find fewer lowballers. You will not even be considered in certain neighborhoods using homeowner equipment.
It may be time to realize that your business may have matured past the point of servicing some of your current clients. It may be time to move on.

marko
03-10-2005, 02:57 PM
Soupy, I think with a high advertising budget you can do quite well. Not 2000 accounts overnight but within 5 - 6 years I think it is possible. Justmowit seems to only have doubled (or just missed it) the years he has been in business. Yes the guys mowing in cut offs, with a mower in their trunk, not paying taxes, etc do hinder our business, but if you can approach their price level, act professional, good equipment, run efficiently, and sell the fact that you are licensed, insured, etc I would think most would hire you over the other guy. Most of these guys quit mid year, go broke, or fill up so fast they cant take anymore customers. Most do not know how to run a business so do not hire employees etc. Their mentality is, "wow I can cut 2 yards an hour for $10 each and I'm making $20 an hour." There is no reason why 3,000 sf of turf can not be mowed for $15. Mention $15 on this site and batten down the hatches because most will hammer you. I don't drop for anything under $25... is a common mantra on this site. I say good, don't drop, more for me!!! I can do one of these yard by myself in 15 minutes. I wish all my yards were this size with 5 on each street. As your business grows and you move more into management, who cares how big the lawn is, if your employees are mowing 12,000 SF with 3 21" for $30 and making a profit, too bad for the guy that was charging $60.00. Maybe he was a price gouger instead of the competition being a low baller. I strongly believe anyone who is a good business owner can run a company lean and mean and make a profit with volume. I am headed to a just mow it type operation (I plan to start small as a one man show in the beginning) then take it day by day and add employees along the way. Anyone who is entrenched in a market for several years will be hard to get out when another LCO takes up this type shop and try to underbid by a dollar/week. As the credit card people can attest, once its an automatic deduction, every week, the customer barely knows it is happening. They come home, see the grass cut, and don't really think about it. If your doing a good job I don't think they will switch to save $27 a year ($1 cheaper x 27 cuts) and like you said, how low can you go???

Soupy
03-10-2005, 03:35 PM
Soupy, Interesting thread.

Yes, I think that a company can build on quantity and acceptable quality.

I think that marketing makes all of the difference. If you only charge $1 per mow and don't tell anybody, the low price won't help you to gain any customers. But, if you know your numbers and can offer a reasonably low price, then you have a good chance if you do the marketing.

Since someone mentioned justmowit, I believe that he spent $75,000 last year on marketing. You don't get 2000 customers by handing out 200 flyers and then waiting for things to happen.

I think that it can be done if you offer the customer what they want and charge a reasonably low price to serve them and continually put this offer before them.

Now we are getting somewhere. That $75,000 sure will kill the profit on low price lawns. Can a new company without name recognition gain the customers with that $75,000 without stooping to the low price customers? I ask this, because the low prices in my area would not allow for a $75,000 a year marketing budget. Would there be any profit left over?

Justmowit has been doing this for a little while. They have name recognition etc. They also claim to be in the mid price range. So lets get off the low price scenario. Can a new company come in and price in the mid range and still gain customers on just marketing? Maybe justmowit will join us and share how many customers he gained with that $75,000 and name recognition. I wonder if he thinks a new company would get the same response.

Soupy
03-10-2005, 04:14 PM
Soupy, I think with a high advertising budget you can do quite well. Not 2000 accounts overnight but within 5 - 6 years I think it is possible. Justmowit seems to only have doubled (or just missed it) the years he has been in business.

if your employees are mowing 12,000 SF with 3 21" for $30 and making a profit

As you mentioned justmowit has been in it for a little while. But lets please not turn this in a justmowit thread. We don't know the real core of his business, crap we don't even know if him and his father are making a real profit. It isn't right for us to assume anything about his business. It would be great if he joined in, but lets not assume anything.

How much profit would you expect off the 12K lawn charging $30 and using 3 man crew with 21" mowers? Also, how much of your operating expenses would you put toward marketing?

PTP
03-10-2005, 04:33 PM
As you mentioned justmowit has been in it for a little while. But lets please not turn this in a justmowit thread. We don't know the real core of his business, crap we don't even know if him and his father are making a real profit. It isn't right for us to assume anything about his business. It would be great if he joined in, but lets not assume anything.

How much profit would you expect off the 12K lawn charging $30 and using 3 man crew with 21" mowers? Also, how much of your operating expenses would you put toward marketing?
I assume that justmowit is telling the truth in his statements. If he is, he stated before that they grossed 1.4M and netted 420K last year.

Soupy
03-10-2005, 04:56 PM
I assume that justmowit is telling the truth in his statements. If he is, he stated before that they grossed 1.4M and netted 420K last year.

Oh, I didn't realize they publicly shared their net income.

justcutz
03-10-2005, 05:33 PM
I don't know how well a quantity style business would work in me area. Most of what I am expecting for my first year will require a bit of traveling. If I can obtain several properties in a condensed area by bidding low I would save on travel time and fuel expenses and it would be worth it because I can pass the savings of limited travel and fuel consumption to my customers and still make the same profit. The key is getting the condensed clientele. If I don't get several customers at one stop and have to travel that would kill my business. But on the other side of the coin I can use it as a marketing ploy. If I let potential customers know that the more people in their neiborhood that I have I can reduce the price of service and essentialy offer a quantity discount for people. Don't know how that would go over when bidding lawns but I would only consider mentioning the quantity discount approach in a neiborhood that can support it otherwise the price is the price. If they want my service then they'll pay the price.

JustMowIt
03-10-2005, 06:58 PM
Soupy, I think with a high advertising budget you can do quite well. Not 2000 accounts overnight but within 5 - 6 years I think it is possible. Justmowit seems to only have doubled (or just missed it) the years he has been in business. Yes the guys mowing in cut offs, with a mower in their trunk, not paying taxes, etc do hinder our business, but if you can approach their price level, act professional, good equipment, run efficiently, and sell the fact that you are licensed, insured, etc I would think most would hire you over the other guy. Most of these guys quit mid year, go broke, or fill up so fast they cant take anymore customers. Most do not know how to run a business so do not hire employees etc. Their mentality is, "wow I can cut 2 yards an hour for $10 each and I'm making $20 an hour." There is no reason why 3,000 sf of turf can not be mowed for $15. Mention $15 on this site and batten down the hatches because most will hammer you. I don't drop for anything under $25... is a common mantra on this site. I say good, don't drop, more for me!!! I can do one of these yard by myself in 15 minutes. I wish all my yards were this size with 5 on each street. As your business grows and you move more into management, who cares how big the lawn is, if your employees are mowing 12,000 SF with 3 21" for $30 and making a profit, too bad for the guy that was charging $60.00. Maybe he was a price gouger instead of the competition being a low baller. I strongly believe anyone who is a good business owner can run a company lean and mean and make a profit with volume. I am headed to a just mow it type operation (I plan to start small as a one man show in the beginning) then take it day by day and add employees along the way. Anyone who is entrenched in a market for several years will be hard to get out when another LCO takes up this type shop and try to underbid by a dollar/week. As the credit card people can attest, once its an automatic deduction, every week, the customer barely knows it is happening. They come home, see the grass cut, and don't really think about it. If your doing a good job I don't think they will switch to save $27 a year ($1 cheaper x 27 cuts) and like you said, how low can you go???

Wow! You really have a handle on the subject. Yes, it is happing now in our market, we went up $1 on new customers & many others are going down a dollar to reap the harvest. Price is not even close to answnering the phone when people are in need, & offering to have a truck there tomorrow without the delays of a physical estimate that takes several days.
MJ

txlawnking
03-10-2005, 07:32 PM
MJ, you and Marko hit the nail on the head. It is all about marketing!!
Maybe to more acurately answer your question, Soupy, NO I don't think ALL areas are viable for a High volume / Low price business plan.

Case in point: Southern Brazoria county Vs. Northen Brazoria county:

South: Large lots, lots of driving, predominately chemical industry driven wages ( prone to layoffs; this hurts you two ways 1 Your customer gets downsized, he mows the lawn 2 Contractor gets laid off, he starts a scrub outfit ) Lots of rural areas, and cheap elderly people who want to talk all day..

North: Tight subdivisions, very small lots, average home cost in the $150 +, Diverse income, lots of people driving to and from work in Houston ( no time to spend mowing )

All in all, unless you live in an area with a very high average income, and deal with estate sized lots, IMHO a Mickey D's marketing campaign, and a reasonable cost, high volume operation will net more income every time.

Soupy
03-10-2005, 07:55 PM
Ok, the market is great in Texas, and decent in Chicago. The Texas one caught me off guard. Anyone else still enjoying a good market.

Justmowit, someone said you spent $75,000 last year on marketing, is this true? I did notice a post were you mentioned gaining about 375 customers last year. If those numbers are correct then it cost you about $200 per customer, right? This leads up to my next question. How much do you think someone would need to start off on the right foot in your area?

I understand that $200 per customer is not bad when divided between the 2087. I am guess that it brings it down close to $2 per cut. I am not sure how many weeks you have, plus I know some are bi-weekly. I'm just trying to get in the ball park. A new company would not have the luxury of having the past customers absorb such a cost. If a new company started and got 375 (probably less because they don't have your name recognition) customers that would be $6+ per cut just for marketing. You say you have $4.25 counting everything except labor. This leads up to the question. If you think the market is still there for new guy, do you think it will stay good for the 6-7 years to give a new company like this time to grow?

IMO, it seems like there is going to be a lot of new guys in texas following the same niche this year and the years to come. I wonder what impact this will have on a that market?

By the way guys, thanks for the replies. The thread is starting to go in the direction I was hoping. Maybe we can learn something about certain areas.

Soupy
03-10-2005, 07:59 PM
MJ, you and Marko hit the nail on the head. It is all about marketing!!
Maybe to more acurately answer your question, Soupy, NO I don't think ALL areas are viable for a High volume / Low price business plan.

Case in point: Southern Brazoria county Vs. Northen Brazoria county:

South: Large lots, lots of driving, predominately chemical industry driven wages ( prone to layoffs; this hurts you two ways 1 Your customer gets downsized, he mows the lawn 2 Contractor gets laid off, he starts a scrub outfit ) Lots of rural areas, and cheap elderly people who want to talk all day..

North: Tight subdivisions, very small lots, average home cost in the $150 +, Diverse income, lots of people driving to and from work in Houston ( no time to spend mowing )

All in all, unless you live in an area with a very high average income, and deal with estate sized lots, IMHO a Mickey D's marketing campaign, and a reasonable cost, high volume operation will net more income every time.

These are the type of post I am looking for :). I messed up by getting into the whole loss price thing though. I should have kept it simple and asked about the market in general.

txlawnking, so is there market left in those areas for either business model?

txlawnking
03-10-2005, 08:13 PM
You are gonna hafta be Trump, to do it as an upstart ( for need of Marketing $$$$).. BTW, there are really only about four major metropolitan areas in Tx that this aproach is really viable: Houston/Harris county, the DFW metroplex, And Maybe Austin, and San Antonio..

BTW, the distance separating Northern Brazoria county from Southern... is about 40-50 miles..

When I started and failed last year, I made some VERY expensive mistakes. First, I foolishly gave heed to peoples advice that had the exact business model I learned to hate ( "high quality", low volume ), I put myself $10,000 in to debt on new equipment, ( I should have spent 5 of it on marketing, at least) And most importantly, I tried to make it work in the wrong area...

If you can't make money where you are, MOVE!!!


I just wish I had heard the wise words of Terry and MIke Justice before I made those mistakes... I'd probly be on my way to accomplishing my initial goal, same as theirs: To create an asset, a Business, Not a JOB for myself...Oh well, live and learn.

I won't make those mistakes again :)

Mueller Landscape Inc
03-10-2005, 08:17 PM
You are gonna hafta be Trump, to do it as an upstart.. BTW, there are really only about four major metropolitan areas in Tx that this aproach is really viable: Houston/Harris county, the DFW metroplex, And Maybe Austin, and San Antonio..

BTW, the distance separating Northern Brazoria county from Southern... is about 40-50 miles..

When I started and failed last year, I made some VERY expensive mistakes. First, I foolishly gave heed to peoples advice that had the exact business model I learned to hate ( "high quality", low volume ), I put myself $10,000 in to debt on new equipment, ( I should have spent 5 of it on marketing, at least) And most importantly, I tried to make it work in the wrong area...

If you can't make money where you are, MOVE!!!


I just wish I had heard the wise words of Terry and MIke before I made those mistakes... I'd probly be on my way to accomplishing my initial goal, same as theirs: To create an asset, a Business, Not a JOB for myself...Oh well, live and learn.

I won't make those mistakes again :)

Great post! Building a business is a totally differant mindset. Took me along time to learn this too.

Soupy
03-10-2005, 08:55 PM
You are gonna hafta be Trump, to do it as an upstart ( for need of Marketing $$$$).. BTW, there are really only about four major metropolitan areas in Tx that this aproach is really viable: Houston/Harris county, the DFW metroplex, And Maybe Austin, and San Antonio..

BTW, the distance separating Northern Brazoria county from Southern... is about 40-50 miles..

When I started and failed last year, I made some VERY expensive mistakes. First, I foolishly gave heed to peoples advice that had the exact business model I learned to hate ( "high quality", low volume ), I put myself $10,000 in to debt on new equipment, ( I should have spent 5 of it on marketing, at least) And most importantly, I tried to make it work in the wrong area...

If you can't make money where you are, MOVE!!!


I just wish I had heard the wise words of Terry and MIke Justice before I made those mistakes... I'd probly be on my way to accomplishing my initial goal, same as theirs: To create an asset, a Business, Not a JOB for myself...Oh well, live and learn.

I won't make those mistakes again :)

Yea, Trump is coming on in a minute. I will see you guys in an hour :)

HOOLIE
03-10-2005, 09:42 PM
I would have to think the hi-volume/low(er) price plan should work in just about any major metropolitan area. I'm sure it would work where I'm at.

I think a lot of us let our professional pride get in the way...we like to think of ourselves as "green industry pros" more than as "owners of a service business". Most of my customers just want someone to cut the grass. It's a nuisance, cuts into their free-time. They don't really want or need someone with extensive horticultural knowledge. Took me awhile to realize they weren't insulting my intelligence...they were just letting me know what it is they want.

Of course there are members here who DO really know their stuff, you know who you are, my previous paragraph doesn't pertain to you guys. There will always be a market for your talents.

In my market, people's commutes are long, free time is short, a lawn service is a time-saving option for them. They didn't hire an LCO to give them a showcase property. Plus, this area is fairly transient, a lot of people move in and out, they aren't looking to sink a ton of money into other landscaping projects. They are the type of customer you're looking for if you were to embark on the hi-volume business plan. I don't even think around here you'd even have to give them a low price. Just make it easy to sign up, maybe quote mowing prices over the phone.

KUTTINIT
03-11-2005, 04:15 PM
First let me say Thanks to Soupy awesome thread :waving: .I dont know if this plan would work or not for a startup.Perhaps if they were experienced at managing(thats assuming).I have been following this and its a great plan. If you can manage a business. I crunched some numbers and one thing that I kept coming back to as a negative was my overhead on labor cost. You can spend all the money you want on advertising but if your areas labor rate is a little higher than another then you wont be able to reap the same amount of profit regardless. In my area people expect to make a certain amount payup payup . I dont think you could pull this off and retain good quality employees with out driving the overhead up to a point where its not practical.

I made alot of assumptions based on a very limited knowledge of this industry,but referencing some bussiness skills that I have that go very well with this type of thread. My question to Justmowit is how mwny crews does it take to service 2000 accounts and what is your "average" cost per man hour(just salary). Because that is when labor cost to profit margins fell apart.
I may be way off in my numbers because of my inexperience in this industry, but look at corporate america and they will tell you that labor cost is the largest expense that you have to cover.
Lean meaning Six Sigma type businesses will always prosper and this is a wonderful example of that. But it will only sustain if you can MANAGE it.

Just my .01 cents worth
Bill

Soupy
03-11-2005, 04:35 PM
KUTTINIT, some of these guys have something great that works for them. They pay piece work, like $10 per lawn. So it doesn't really matter if it takes them 10 minutes or 1 hour, it does not cost the business any more money. They could literally bid the same price on every lawn (that is how they post prices) because it is no sweat off their backs. This is the true Key to their business model. If you take this away then trouble will start brewing.

The only problem is you have to be lucky and live in an area that has hungry workers. I believe some of these guys outsource the work to foreigners by using the H2B program (work visas).

I would jump on this pay scale in a heart beat If I could, so I am not knocking it. I wouldn't use foreigners, but that is a political decision, not a business decision.

Soupy
03-11-2005, 04:40 PM
Maybe we should start asking the question, Can you get by with paying piece work in your area? Would the local boys except this?

Lets not get in a war about how it ends up being fair etc. I'm curious if the local boys would except making different amounts each hour. If they usually make $20/hr doing lawns and I throw them some stinkers, would they except it.

PTP
03-11-2005, 05:05 PM
Maybe we should start asking the question, Can you get by with paying piece work in your area? Would the local boys except this?

Lets not get in a war about how it ends up being fair etc. I'm curious if the local boys would except making different amounts each hour. If they usually make $20/hr doing lawns and I throw them some stinkers, would they except it.
I do piece work - sort of. My profit on a weekly and a biweekly lawn is exactly the same, but my employees pay almost doubles.

One thing that I have been learning lately is that I need to have my employees as #1 and customers as #2. Do you think that my foreman is happy with his wages? You bet he is. He also shows up early, works hard all day, and gets other people going as well. I don't care that they are making more. I would most gladly write checks for $1000 per week because that means that I net $2000. I pay more and I expect more and so far it seems to be working.

Flex-Deck
03-11-2005, 05:36 PM
[QUOTE=Soupy]Good post guys. But you have not answered the question. Do you think it is possible in todays market to build a lawn service built on quantity? We all understand how one theoretically could profit from this type of business model, but can it be done today?
QUOTE]

I believe you can build on quality first, efficiency second. The efficiency will get you labeled as a low baller by those that are operating 1990 type equipment.
Here is an example - If I had a machine that would produce $500 in 3 1/2 hrs. including trimming, one operator,(me), and cost $16,000, plus the trimmer cost ($160 JD bent shaft), would any of you jump on this.

Maybe I should ask "Does anyone out there have $16,000 worth of equipment that one person can run and gross $500 in 3 1/2 hrs.?

KUTTINIT
03-11-2005, 08:37 PM
Soupy, I was thinking about the "piece work rate" and that was the only way I could see that this would work. Trust me Im not knocking this buss. plan. I would love to do this in my area. Unfortunately as I mentioned earlier I dont think the majority of the workers would agree to this type of arrangement. Also how long would it take for an employee that could communicate(english speaking) become your competition with an inside hand on your customer base and also a good understanding of your business plan.
I will just throw this out as a bone......I ran some numbers and with a fixed labor cost(piece rate) plus a huge client base the potential for this model grows exponetially. But could this be what is driving prices down and also causing this industry to become saturated. Because on paper this looks really really sweet!!!!!

LLandscaping
03-11-2005, 09:43 PM
I think that a company can make it doing a larger number of properties put charging a low price and doing crappy work. Because there is a market for people that just want there yard cut and not maintained. Our company is going toward all full service high end customers that want to pay for quality and reliability. I think it is easier to have a lower number of full service customers than have a bunch of mow and go customers. There is less customer relations, less scheduling, paper work and you are able to provide better service.

Soupy
03-11-2005, 10:53 PM
Soupy, I was thinking about the "piece work rate" and that was the only way I could see that this would work. Trust me Im not knocking this buss. plan. I would love to do this in my area. Unfortunately as I mentioned earlier I dont think the majority of the workers would agree to this type of arrangement. Also how long would it take for an employee that could communicate(english speaking) become your competition with an inside hand on your customer base and also a good understanding of your business plan.
I will just throw this out as a bone......I ran some numbers and with a fixed labor cost(piece rate) plus a huge client base the potential for this model grows exponetially. But could this be what is driving prices down and also causing this industry to become saturated. Because on paper this looks really really sweet!!!!!

I agree completely. It is a sweet deal for the guys that can make it work in their area. The whole purpose is to have the employee eat the cost on the bad ones. I know of a big national fert/weed company that bids over the phone. They are constantly underbidding and having to give the techs a bonus because the tech refuses to do them at that price. They make salary plus commission and the quotas are high. When the low bidding started they had to start the tech credits. This is basically just an added $ amount to the quota to put the customer up to par as for commission. My brother-n-law just quit there after many years because it started getting so bad. He once made good money there and still did OK, but he did not like the fact that even though his pay was more the extra hours worked was actually a pay cut. He told me that all the experience long time workers are quiting.

Oh by the way, these techs have to now work all saturdays but because they are on salary they get like an extra $10 since they average it. I think they call it Chinese overtime. This is a prime example of the employee eating the cost.

I'm sure the hard working hispanic labor force would eat this up. We don't have a hispanic work force in my area :(.

Soupy
03-11-2005, 11:14 PM
[QUOTE=Soupy]Good post guys. But you have not answered the question. Do you think it is possible in todays market to build a lawn service built on quantity? We all understand how one theoretically could profit from this type of business model, but can it be done today?
QUOTE]

I believe you can build on quality first, efficiency second. The efficiency will get you labeled as a low baller by those that are operating 1990 type equipment.
Here is an example - If I had a machine that would produce $500 in 3 1/2 hrs. including trimming, one operator,(me), and cost $16,000, plus the trimmer cost ($160 JD bent shaft), would any of you jump on this.

Maybe I should ask "Does anyone out there have $16,000 worth of equipment that one person can run and gross $500 in 3 1/2 hrs.?

Sounds great! Can you build me one of these franken machines and then come to my area and flatten some construction to give me the wide opens lots to use that mower on. We don't have acreage mowing here. There are a few place's, but they are rare. Maybe I could get the farmers in the rural area to hire us :).

Brad, efficiency is a given. We all know that. This thread is proving though, that to compete in the residential market on large scale you have to hire hispanics, pay them piece work and buy non-efficient equipment.

Brad, this is for you (below). I love this thing! I might consider the flex for a 36" Toro that sits and collect dust. I picked it up cheap from a guy going out of business or I would sell it. I think the flex would get it in action again though. Will the flex fit a 97 Toro? I know it's old, but only has about 400 hrs on it. Pm me and let me know if it will fit and cost. I'm not promising anything but maybe in a couple of months I will buy one. I have to find a customer base for it first. I'm thinking of aiming hard at small fence properties just for this mower.

The mower pictured is Brads money making machine.