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  #1  
Old 12-09-2012, 11:36 PM
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Herrick Herrick is offline
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"Just won a big one" comes to an end...

In reference to this thread:http://www.lawnsite.com/showthread.php?t=253180 from a few years back, for any of you that remember.

Summary: won a large contract for a retirement community, 46 acres total, about 1/2 turf. Mow, trim, blow and bush trimming twice a year. Quit a 36k/yr job to do this.

At first things seemed to go really well. I was having a blast doing what I loved. Funny how over time reality sets in.

First year (2009) was a one year contract. I recruited my dad to help out and we worked our way through it. I did all the trimming and blowing and dad helped with 1/3 to 1/2 of the mowing. Towards the end of the year I started realizing how things were wearing on me... Wife volunteered to come out and help as she had free time between her part time job and our 4 kids. In September I wound up purchasing a second (new) zero turn so she could quit her job and come help the following spring. Now i had 3 mower payments, plus the typical fuel, ins, etc... Typical growing pains with doing a large complex like this for the first time, few complaints, but you can't please everyone, right? Especially with almost 300 retired folks staring out the window at you. Got a three year contract signed that fall/winter. I was on top of the world....

Second year (2010) is when things really started to come apart... With the wife now helping full time, I picked up two school districts along with the other 20 or so small stuff we did. With three machines going, we should be able to knock this out in no time.... Wrong! My wife soon realized that this was actually like work, especially trimming around almost 80 duplexes. We start getting behind a day or two because of rain, and the spring growth quickly gets away from us. These 300 retired folks now start calling the executive director because the head of maintenance keeps blowing them off. By August we receive a letter saying that if things don't improve and we don't come up with a better plan to keep up on things, we won't be working there next year. We end up hiring a high school kid to help trim, more money going out instead of in. We end up stepping up and keeping the contract.

Year three (2011) One school district is only a year contract, so we don't re-bid that one, and cut out a couple other small jobs to try to devote more time to this big one. Head of maintenance is replaced with a great guy and communication of issues resolves them before they can get out of hand. High schooler is still with us, and things actually go pretty well... Except the budget. This is when we start to realize how much this is really costing us to do.... $1200 a month in fuel, $600-800 a month in labor, $750 a month in mower payments... Suddenly it's getting harder and harder to keep up with things. I start to realize that we can't really afford to do this anymore... But by now it's late summer, and we have no money saved up.... We can't rely on snow money to replace what this contract pays over the winter (we had it set up on 12 month billing). We've got to finish this out.
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  #2  
Old 12-09-2012, 11:43 PM
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TriCityLawnCareLLC TriCityLawnCareLLC is online now
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So, what's the bottom-line of your post?

One thing that stands out to me (and i may be wrong) is you saw some pretty big contracts, and estimated them based on you doing all the work- no problem other than what we think we can handle isn't always accurate. So in turn you came in way under what the other guys were doing the work for. I'm no going to throw the term "lowballing" out there because i think it's an ignorant term used to frequently but in essence you are doing the work cheaper. But, it does seem like you focused on the numbers and didn't anticipate for expenses.
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Old 12-09-2012, 11:58 PM
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Herrick Herrick is offline
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Quote:
Originally Posted by TriCityLawnCareLLC View Post
So, what's the bottom-line of your post?

One thing that stands out to me (and i may be wrong) is you saw some pretty big contracts, and estimated them based on you doing all the work- no problem other than what we think we can handle isn't always accurate. So in turn you came in way under what the other guys were doing the work for. I'm no going to throw the term "lowballing" out there because i think it's an ignorant term used to frequently but in essence you are doing the work cheaper. But, it does seem like you focused on the numbers and didn't anticipate for expenses.
I actually was $500 more per year than a large firm from out of town, but was given the opportunity to match them since I was local. Not so much of under bidding, as not being set up to do the work in the first place. If I hadn't had to go out and get more equipment, and was just paying $10/hr kids to do all the work, with plenty of labor to call on when things got busy, it would have been much better. Problem was I couldn't keep five guys busy outside of this account. I couldn't afford to get another truck, trailer, etc.... The business outgrew itself basically and I wasn't ready.
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2007 Dodge Ram 2500 HD Mega Cab 4x4 w/Meyer Plow and salter
16'X8.5' Haulmax Enclosed Trailer
2011 Exmark 29hp Kohler EFI 60" ultracut 6
2008 Exmark 31hp briggs 60" triton w/QDS Ultra Vac
2012 Deere 1026R/60" 7-iron
Honda HRX 21"
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  #4  
Old 12-10-2012, 11:16 AM
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4 seasons lawn&land 4 seasons lawn&land is online now
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Quote:
Originally Posted by Herrick View Post
I actually was $500 more per year than a large firm from out of town, but was given the opportunity to match them since I was local. Not so much of under bidding, as not being set up to do the work in the first place. If I hadn't had to go out and get more equipment, and was just paying $10/hr kids to do all the work, with plenty of labor to call on when things got busy, it would have been much better. Problem was I couldn't keep five guys busy outside of this account. I couldn't afford to get another truck, trailer, etc.... The business outgrew itself basically and I wasn't ready.

Did they show you the bid?
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Old 12-10-2012, 12:03 PM
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Herrick Herrick is offline
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Originally Posted by 4 seasons lawn&land View Post
Did they show you the bid?
No, and looking back that was a HUGE mistake. Who knows if we were even bidding the same work? Never again. At the time I was more worried about keeping the work than $500.
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  #6  
Old 12-10-2012, 07:33 PM
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4 seasons lawn&land 4 seasons lawn&land is online now
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Quote:
Originally Posted by Herrick View Post
No, and looking back that was a HUGE mistake. Who knows if we were even bidding the same work? Never again. At the time I was more worried about keeping the work than $500.

Thats what I figured. So why not bid it at 80 k and then be working your tail off for good money, should you get it. Although that would leave a bad taste in my mouth after getting screwed hard for 3 years. I bet you would still be less than the big outfits. From everything youve said its obvious you low balled it, even if unintentionally.
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Old 12-10-2012, 08:21 PM
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Quote:
Originally Posted by Herrick View Post
No, and looking back that was a HUGE mistake. Who knows if we were even bidding the same work? Never again. At the time I was more worried about keeping the work than $500.
Quote:
Originally Posted by Herrick View Post
Mow, Trim, Edge, Blow... by myself for the most part, 60" ZTR. The trimming isn't really as much as it looks, as most of the pavement is asphalt... with my experiences it really only seems to need touched up every couple weeks. Most of the trees have 2' mulch beds around them. They are in the process of building some more duplexes in the empty area at the top of the pic, so there is a large area that will be under construction and will not need any attention for a while. Part of the large area at the bottom left is actually sweet corn also. They have a full time maintenance staff for the odd jobs, just hire out the mowing. Forgot to mention I picked up the hedge trimming on this also for some extra $$.

I actually did get to see the other bids, and they were both around $45k. Guy that had it last raised his rate by $12k this year for some reason. he was at 55 hours a week, but only charging $27 per hour... my hourly rate is almost double that, but time is almost half also... he was using employees... The story I got from the center made it sound like he didn't want the job anymore... not sure why, hopefully I won't find out.

Part of my thinking is that this should be a fairly nice account... no kids, no toys to deal with, no dog poo... a lot of headaches that won't be there...
Guess I'm not following too well?
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  #8  
Old 12-09-2012, 11:52 PM
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Herrick Herrick is offline
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Now we're on to this year. Good thing we stuck it out, with the lack of snow we would have been living in a cardboard box. I cut the high school kid to save money. Start figuring out where we can save time... Thank goodness for the drought, saved us thousands in fuel. We were able to get by mowing once a month for almost three months. I also cut some more accounts that were farther away to save windshield time. Loose a few others due to various things, but I know at least a couple are from lack of attention. We spent so much time on this big one that we end up loosing others... Income takes a hit again, plus the drought cuts out the rest of the clients for a few months.

We told the head of maintenance that we won't be bidding again for next year. He wasn't surprised at all. He saw how I was killing myself trying to keep up. About 50 man hours a week, plus trying to trim almost 2500 bushes twice a year with three people just wasn't working. We made it through, but even facing winter with not near what I should have saved up, I am less stressed than I have been in years. Re-focusing my attentions on quality and being proud of what I am doing. Not just rushing through to get on to the next one. Sorry folks, you can kill yourself trying to do three times more than you should... Me, I'm going to watch my kids grow up. Not leaving the business altogether, but I think I may have to find some part time work to make ends meet until things are built back up to where they should be for a full time solo guy.

Talk about a learning lesson... At least I am really confident moving forward about what it takes, and what my abilities are.
__________________
2007 Dodge Ram 2500 HD Mega Cab 4x4 w/Meyer Plow and salter
16'X8.5' Haulmax Enclosed Trailer
2011 Exmark 29hp Kohler EFI 60" ultracut 6
2008 Exmark 31hp briggs 60" triton w/QDS Ultra Vac
2012 Deere 1026R/60" 7-iron
Honda HRX 21"
Stihl handhelds
Billy Goat Truck loader
33 years old - Since 2007 - Solo - FULL TIME
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  #9  
Old 12-10-2012, 09:52 AM
205mx 205mx is online now
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Quote:
Originally Posted by Herrick View Post
Now we're on to this year. Good thing we stuck it out, with the lack of snow we would have been living in a cardboard box. I cut the high school kid to save money. Start figuring out where we can save time... Thank goodness for the drought, saved us thousands in fuel. We were able to get by mowing once a month for almost three months. I also cut some more accounts that were farther away to save windshield time. Loose a few others due to various things, but I know at least a couple are from lack of attention. We spent so much time on this big one that we end up loosing others... Income takes a hit again, plus the drought cuts out the rest of the clients for a few months.

We told the head of maintenance that we won't be bidding again for next year. He wasn't surprised at all. He saw how I was killing myself trying to keep up. About 50 man hours a week, plus trying to trim almost 2500 bushes twice a year with three people just wasn't working. We made it through, but even facing winter with not near what I should have saved up, I am less stressed than I have been in years. Re-focusing my attentions on quality and being proud of what I am doing. Not just rushing through to get on to the next one. Sorry folks, you can kill yourself trying to do three times more than you should... Me, I'm going to watch my kids grow up. Not leaving the business altogether, but I think I may have to find some part time work to make ends meet until things are built back up to where they should be for a full time solo guy.

Talk about a learning lesson... At least I am really confident moving forward about what it takes, and what my abilities are.
Well it sounds like some of your lawns were actually costing you money. interested to know how it turns out. good luck to you
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  #10  
Old 12-10-2012, 10:12 AM
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Herrick Herrick is offline
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Originally Posted by 205mx View Post
Well it sounds like some of your lawns were actually costing you money. interested to know how it turns out. good luck to you
I had a cluster of three that I was doing that was about 45 min one way from my house... A HOA detention basin, and two houses on 50x100 lots. After expenses I would have been better off at Mickey D's.....
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2007 Dodge Ram 2500 HD Mega Cab 4x4 w/Meyer Plow and salter
16'X8.5' Haulmax Enclosed Trailer
2011 Exmark 29hp Kohler EFI 60" ultracut 6
2008 Exmark 31hp briggs 60" triton w/QDS Ultra Vac
2012 Deere 1026R/60" 7-iron
Honda HRX 21"
Stihl handhelds
Billy Goat Truck loader
33 years old - Since 2007 - Solo - FULL TIME
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