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Old 02-18-2011, 12:12 PM
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PROCUT1 PROCUT1 is offline
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Join Date: Dec 2003
Location: TN
Posts: 4,909
How to fail part 2

My "How to fail in the lawn business" thread seems to be a hit....haha

I learned so much from that happening, that I didnt make those same mistakes.
Here is the recovery.......Making it big.....Doing things right......And how that too crashed...
Those who know me and my writing here know that I go out of my way to point out my own faults and blame myself even when its not always deserved.
In this case, I look back constantly.....And I believe I did most everything right....And this was done to me.
It should help explain my rants in the political forum which are my hatred for the government, "both parties". Hatred for their catering to the billionaires.
Hatred for the bankers receiving their billion dollar bonuses for crashing the country.

This story will be longer than my lawn story....So ill be back to update it as I can get some time.

5 years ago my sales were hitting 7 digits. I had 3 lawn crews, a landscape crew, a sealcoating crew, an office manager, a mechanic.
The phone was so busy, I could barely keep up with estimates and thats most of all I did all day.
I was working very closely with one of my best friends who was growing huge in the snow business. We had a contractor-sub relationship that was unique.
We worked together on bidding the properties, planning, and right on the table we both worked out what his "cut" was and what my "cut" was.
Together we were like a vacuum sucking up snow work. If it was big and complicated, we got the job.
I was new in the sealcoat business but management companies couldnt get enough of me. They loved the work, and if there was a shopping center or condo complex getting sealed, it was usually my company.

The hardest part of my day was figuring out how to get the work done. How to get enough people. Coordinating tractor trailer loads of material.
My credit was great. Every two years I would get a new truck. Call the dealer and tell him what I wanted and I would be in at 5. Walk in sign the paper and I was out the door.
My credit with vendors was gold. When I would need a new ZTR mower, I would call the mower shop, send a guy over, he would sign the ticket and leave with a $9000 mower to be paid at the end of the month.
I had lines of credit to get through big jobs and slow times. Never had to worry when a payment was a little late.

Sealcoating was taking off so fast that the lawn business was becoming a pain. I had a 500 house.....Yes 500 house route, that although it was profitable, it was a tiny profit compared to the sealcoating work I did.
Other lawn contractors were growing like crazy too. You would see a guy one year working out of the bed of his 20 year old pickup, then next year theres 3 brand new trucks, trailers, skidsteers, you name it.
I sold the lawn business for a nice price, to be paid over many years, and went full scale into commercial sealcoating.
There was such a demand for large commercial work that I stopped pushing residential homes......When you are doing a condo complex a week at $30,000 a piece, Mrs. Jones driveway at $150 wasnt "worth the trouble"

I had a fleet of equipment. All painted and shined up. 12 or so trucks out there. Everything lettered up. My yard signs were all over town.
It seemed everything I touched turned to gold.
My debt was minimal, I had one loan that I paid every month which was a consolidation of previous loans and such.
My guys were compensated great. I was so happy that I felt I had got to the point that I could hire "real men" that could make a real living working for my company.
My "operations manager" made almost 900 a week. Full health insurance, company take home truck, phone, uniforms, tools, you name it.
I bought a house and another piece of property to build a shop on.

Paying bills was actually FUN.
When I came to work in the morning, the crews were already on the road. My office manager had reports from the previous day, a p&l statement, and bills to be paid that day along with checks made out for me to sign.
I finally felt "in business" I had finally made it after years of struggle.
I had a name, a reputation, and work booked out months.
I had money in the bank, bills paid on time. And anywhere I went in town, I was "somebody"
When I met people I would always get "YOU own that company?"
I had learned from "failing" in the lawn business what mistakes not to make, and operated on a budget, and didnt repeat those mistakes.

Then......Practically overnight.......Like someone set fire to my shop, it crashed.
I had just finished up some big sealcoat jobs that I wasnt going to get paid for for about 45 days......The sealcoat season was over, I was getting ready for snow...
No big deal. Thats why I had a large line of credit. Cover the expenses a couple months, then the sealcoat money would come in, the snow payments would start and Id be sitting on a pile of money.
I used credit exactly textbook how it should be used. Never in my life made a late payment on anything, and didnt "overextend"

Welcome to the CREDIT CRUNCH

I had just ordered a couple hundred ton of salt, sent the check out. Paid the sealcoat tanker bill. Paid a bunch of other bills.
I get a call from a local vendor that my tiny couple hundred dollar check to him bounced.
ME???? BOUNCE A CHECK???? Impossible. I have 20,000 in the bank, plus 50,000 available on the line of credit attached to it.
I jump online at the office and look at the bank account. ZERO
I call the bank in a panic and get the "business lady"

WHATS GOING ON?!?!?!?!!?!
"Joe, you know with whats going on in banking right now, the bank is reviewing its credit extensions for everyone and trying to limit its exposure."
They took my line of credit, closed it, converted it to a loan that according to the fine print was "payable in full immediately" So in turn they took every penny out of all of my bank accounts.
I had checks outstanding to vendors. Credit card payments, fuel payments, all waiting to clear that hadnt hit yet.

I flipped out..

"LOOK AT MY HISTORY. NEVER A LATE PAYMENT" I use the line just for what its supposed to be used for. I pay it off 3 or 4 times a year. My credit score is 780........YOURE GOING TO DESTROY MY BUSINESS.
Even cleaning out my accounts I still owed on the line.
Her answer......."Just keep making deposits, we'll take them until the line is paid, and it will all be fine"
I went through all sorts of people in the bank and though they all admitted that I did nothing wrong, they didnt reverse it.

For the first time, I start defaulting on everything.
My guys payroll checks bounced.
All my supplier checks bounced
My credit card payments bounced, sending a 5% interest rate to a 35% interest rate.
I literally didnt have a penny to my name and couldnt use any of my bank accounts at that bank because any deposit I did make, they would take it all.
On top of it I had 45 days before I would see any customer money.
A truck sitting at the equipment place with a new snowplow and sander waiting to be picked up and paid for.
Sales tax due in 2 weeks.
And barely enough gas in my truck to get out of the bank parking lot.

To be continued

Last edited by PROCUT1; 02-18-2011 at 12:17 PM.
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