The Green Industry's Resource Center

Old 02-09-2002, 10:53 PM
Stephen Stephen is offline
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Join Date: Jan 2000
Location: Sullivan County, NY
Posts: 81
Profit sharing?

Anyone have any thoughts on profit sharing with employees? A sort of added bonus to a foreman who is a top of the line employeee or to new hires as a benefit after they have been there a certain amount of time?

My situation is that I am looking for an added bonus to offer a guy who is a foreman in the winter to come aboard year round as he is looking for:
A: a new job for the just the summer season in a different field
B: or a year round job, with me or someone else.

He has two years experience with me and 5 years experience as a foreman at his other job, where he runs the show. (summer work only)

I have never had any problems with him i.e.: reliability, theft, poor work, dishonesty, etc.

He handles customer relations, schedules work, handles money of those customers that pay on the spot, keeps his own time, preforms repairs and maintenance before it is needed, takes a company truck home and keeps it spit shined and polished, no exaggerations.

I know this does have its downfalls, and some people believe in the open books theory, some don't--but aside from a partner who invests capital in the business, I need to find reliable people. And partnerships don't always workout as I have seen from different businesses throughout my family.

Worst case scenario is he stays for the season and decides he doesn't like the work and goes somewhere else.

What percent of profits? Any thoughts of gross profit percentages over net profit percentages?

It is a big investment, I know but it disgusts me to have to mail out 20 w-2's at the end of the season to fill two positoons.

Basically, I am at the point where I don't mind to pay a little extra to good people, as I don't have the headaches that come with the crap and can concentrate on other aspects of running my business and expanding.

I would also like to pursue other ventures such as finishing my schooling part time among other things and it would also be nice to go away for three days once a year and not be strapped to the cell phone and pager like life support.

Any suggestions/Ideas- I welcome them all because we are all here to learn. Sorry for the long post.
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Old 02-10-2002, 01:49 AM
PAPS PAPS is offline
LawnSite Senior Member
Join Date: Jan 2002
Location: Oakland, NJ
Posts: 404
i have toy'd with the though of hiring a full time tree climber (rather than part-time) and offering a percentage of our tree sales, along with a salary too. As for foreman's, i have also considered giving a percentage + salary to a good construction foreman too. Maybe like 3-5% + salary. But, i would expect him to do all estimating, all customer relations, and oversee the jobs to the very end. its just a though, but not sure if it is going to happen this coming season.
Bryan P.
PAPS Landscape Design & Construction
Oakland, NJ
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Old 02-10-2002, 08:28 AM
Lanelle Lanelle is offline
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Join Date: Feb 2000
Location: No.VA, zone 7
Posts: 1,361
I'm not certain how a good foreman can do all that you are thinking of asking. If he is overseeing construction, then he would also be estimating construction jobs it would seem. How can he be on-site doing construction and at somebody else's site doing an estimate? Unless the crew is very well trained and has at least one person who is almost a 'jr. foreman', expect to see some problems with your installs. Also, construction jobs often require drawing up plans, getting a permit as well as calling around for the best material prices and ordering. Tell me why would a foreman do all that instead of going into business for himself.
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Old 02-10-2002, 01:46 PM
Kirby Kirby is offline
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Join Date: Mar 2000
Location: iowa
Posts: 8
Have you considered setting a fixed dollar bonus for different sales levels? For example, a $2500 bonus at the $100,000 sales mark. This allows you to keep income statements to yourself and just provide gross sales numbers to key employees. It is up to you however to be sure you are operating with decent profit margins so that these bonuses do not eat up your net earnings.
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Old 02-13-2002, 03:50 PM
B. Phagan B. Phagan is offline
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Join Date: Feb 2002
Location: Tampa, Florida
Posts: 95
profit sharing

I've seen many companies try to put the "golden handcuffs" to keep good people with profit sharing, ownership %, etc.

Now, it's important to determine if the sharing will be on the net or on the gross profit?

In lieu of profit sharing, I'd suggest employee performance plans and bonuses for accomplishment.

Bill Phagan
Green Industry Consulting, Inc.
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Old 02-16-2002, 03:15 PM
LawnSite Fanatic
Join Date: May 2001
Location: St. Louis, Missouri Gateway to the west
Posts: 6,750
I wondered how long it woul be before you arrived here Bill Phagan.

I try to stay away from profit sharing and all the other stuff.

I try to pay production bonuses. The more they accomplish with zero complaints, in the least amount of time, the higher the bonus could be.

They also have to keep equipment maintained and cleaned.

With the new season appoching rapidly I have a few new ideas I will be trying.

Once you start getting the corporate blunders construded into your company, you may never be able to leave them.

Compass system may be your answer. (I still haven't gotten the info I asked for on it yet)
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Old 02-16-2002, 05:56 PM
B. Phagan B. Phagan is offline
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Join Date: Feb 2002
Location: Tampa, Florida
Posts: 95
profit sharing

Hello LawnGODfather,

Actually I was here once tied up with my MoneyMaker Workshops, consultations, etc but had a ton of e-mails from posters asking me to respond to some topics. Getting prepared now for a trip and workshops in Ga, NC, SC and VA. so my responses may be short lived.

There are numerous ways to bonus employees......however, I think the first criteria is the owner must be making money! Then if there's some to distribute, be happy to do it for them. And I think the bonuses change based on performance and directions set by the owner to ensure everyone is singing out of the same book.
Bill Phagan
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Old 02-20-2002, 01:20 AM
BRL BRL is offline
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Join Date: Jun 2000
Location: Somerset, NJ
Posts: 1,211
LOL I was reading LGF's post & thinking "how long it woul be before you arrived here Bill Phagan. "??? But Bill explained my questioning mind.

Good to see you back Bill. I hope all is well. Thank you for jumping in & sharing again. And we hope to see you do so more when possible.
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