How to fail in the lawn business by someone who did it.

[Junior M]

Originally Posted by larryinalabama

Im just saying why pay 5000$ per year to rent one, when you can but a decient skid for 12000$. Now if you need one for a day 3 or 4 times a year then renting makes sense. Going out and buying a new 40000$ machine makes no snese unless Bob Cat work is going to be your main line of work.

Even if it is your main line of work, it dont make sense to go out and buy one unless you've got the work for it...

[PROCUT1]

Larry.

I dont disagree with you at all. Thats the beauty of being the owner. I was saying that you can buy anything that you want.

If you have the money and want it, by all means buy it.

Most guys however do not have the money in the bank. They will sit down with a piece of paper and a calculator and attempt to justify going to the dealer and buying a new one. They will calculate out the payments and figure "i only need to do 300 a month in work with this thing and it will pay for itself"

Thats where the trouble begins.

[capnsac]

Originally Posted by Ramairfreak98ss

Very true, i like the story We've been beat up with "lawn accounts" all last year and even so the year prior.. $20 companies/jo smoes coming in now cutting our $40/$45/even $50+ accounts with small and cheap machines all day long.

Reliability and customer service and professionalism dont mean squat to clients these days, at least not 90% of them. Ive built this business to the point that i can offer all 3 at an affordable rate. But why will a client choose to pay my rate over a guy thats 20% cheaper that offers nothing but just the straight service thats on the contract... cut lawn once a week for $20?

I've felt like i've been in the MID area for a while now. I keep saying im a "small company" which by my income sure as heck feels like it. I went from push mowing lawns to doing everything now. Your competition frequently out prices you in any aspect.

Hard to compete with hardscaping because the 100% hardscaper comes in cheaper, faster, more efficient, cheaper labor workers, cheaper product, better supply costs and can probably do a better job sometimes too than I can.

Landscaper comes in that does it 100% of the time, again cheaper supplies, cheaper labor, bang, 20 10' tall trees in the ground in 5 hours and customer is happy, my customer :/ because they were $300 cheaper in the end.

Irrigation companys come in, you bid 3k for a install job for your own client. 1800sprinklers comes in and offers it for 2k, or less even. I dont know this until the end, i try to cut down on almost all profits off the job, to offer the job for $2300 to the long time client, he tells 1800sprink that another company was lower, even though i was not, they come back $1800 WITH 7% sales tax, WTF? they get the job, client now reviews everything we do for them and thinks that we over charge, one client switched his lawn company even for 2008 because we were $39 a cut, xyb company/joe says he can do it for $28, he asks me for counter offer, i said we dont cut anything less than $30!

I can go on and on, this has to be one of the toughest "labor" businesses out there. I see big huge companies fail all the time especially now with the economy. Companies that i hated because they sucked up all residential patios and landscape jobs last year now will have zilch for work and i know are probably going to go under by end of 2009. It seems every year I've made huge drastic adjustments to where we focus our core services.

Started, i built up the lawn mowing business, look at the mowers i own now, and we now use them all 1-2 days a week, they sit for most of the week every single week.

Then bolstered landscaping, tree installs, planting, garden drip irrigation.... last year was way low on that too.

Started 12v high end lighting, did a few last year, but just mostly quotes and then sticker shock for potential clients, they go and buy a $300 malibu kit and never call me back :/

Started tree services, trimming, pruning.... now we have 3 chainsaws, pole pruners, powered telescoping pole pruner, ropes, harnesses, probably well over 10k plus a small chippper...... i used this stuff 2x last year for small jobs.

Started bulk commercial maintenance, one employee lost our only better Echo hedge trimmer that was in mint condition but 2yrs old :/ Bought 2 new stihl 81s, 24" for 1k. We got the dump trailer, built sides on it, now need a f550 12' landscape body dump truck and dump insert for the other truck.

50-60% of our work last year was maintenance, commercial mulching and trimming and weeding and bed edging services. I never thought my nearly 4k hydro bed shaper from Little wonder would ever pay off when i got it 2yrs ago. But this work is difficult at best, long lists of work with completion deadlines, employee problems, one guy wants to be home by 5pm, another 7pm, another will sleep on the mulch pile overnight and work until 11pm if i wanted.

Then after putting in 60+hrs a week for a month straight doing this work, it comes to a halt, you go back to your 2-3 residential jobs a week and now instead of needing 7 guys you need yourself and 1-2 others if that.

I go from having every truck out each day in april to 5 trucks and more trailers sitting the whole rest of the year.

Fall comes and every joe with a leaf blower wants to blow leaves for $20 an hour when we need a minimum of $150 in 2008 just to entertain sending 2-3 guys out to cleanup, blow or collect and remove leaves and fall debris.

Then you get a call from one commercial account that they're unhappy because your guys didnt pickup and dispose of a huge 6' wide, cut down hedge that another house contractor hacked at the base in may, your guys mowed around it the whole year and now they expect this to be removed as part of their leaf cleanup? It never ends.

We have a customer list of probably 500 clients, only maybe 40 are active in the present time, we've only gained as many as we lost each year for the past 3 years it seems. Its always something, or lower prices, or they move, or they do the work themselves. I feel the days of 5-10yr clients and contracts are long over. My longest is 4yrs i have a few people, most are 1 season and thats it, yet most claim they were happy with the service.

This is a well thought out post, and I can see you have gone through a lot of aggrivation in your time. With that being said, it made me want to quit right now, pack my balls and go home. Thank you for making me want to shoot myself.

[PROCUT1]

The main reason i made this post is there are so many guys on here who dont have the slightest clue about a larger operation.

I in no way mean that as an insult. Its just a fact. I didnt either when i started.

You see posts all the time about how loyal customers are, how their business is growing in the recession while others are struggling. Guys that post that their profit margins are huge.

I know that all of the guys that post this have a crutch of some kind. They either have a full time job with benefits, or their wife works and has benefits. They either work out of their house or have a small storage place. They are most likely owner operators with a couple of helpers, likely paid cash.

Im not knocking them at all. If I were to do it again, that would be me. You can make a very comfortable living with a nice lawn route.

When these guys hear that a large company has a GOAL of a 5% profit margin in this business, they are dumbfounded.

Its two different worlds. And until you live it and experience it, you wont know for sure.

[BSDeality]

Originally Posted by capnsac

Thank you for making me want to shoot myself.

It wasn't meant to make you want to kill of your business, just rather help you understand why businesses fail at the seemingly 'optimal' point of their business. You can have a successful business at any size, you just need to be prepared for the transitions.

[hvphotog]

There are many tax advantages to renting and or leasing and before you make any choices you should always talk with your accountant on that. For those who think owning is better than leasing that is not accurate for an across the board statement, Wal-mart owns less then 50% of its buildings while staples owns Zero % of theirs. This trickles down to smaller businesses as well. I was a commercial real estate broker in NY, something that works for one company may not be right for another. Always consult your accountant.

[slc12345]

excellent story, read every page and will take alot away from it.

[capnsac]

Originally Posted by BSDeality

It wasn't meant to make you want to kill of your business, just rather help you understand why businesses fail at the seemingly 'optimal' point of their business. You can have a successful business at any size, you just need to be prepared for the transitions.

You either need to be prepared for the transitions or have researched the jump you are about to make and decipher whether it will be wise or not. I think too may decisions are made with the thought that this is a good decision, and with only one man running the show mistakes are bound to happen.

[whoopassonthebluegrass]

Originally Posted by capnsac

Before 40, wow. When did you get into the lawn care business and at what age did you have the epiphany that changed your frame of mind?

I'm 30 years old. I've run my own solo operation now for 7 years. My business has a total of $4,000 in debt (all of which will be cleared no later than August - and if spring goes well, they'll be cleared by May)... and I have all the equipment I need to continue my operations as is.

The paradigm shift I experienced came as I watched that we always were short on money, regardless of how much more I came home with each year. I saw that, because of our behavior, even if I could make a million bucks a year, I'd still be broke.

I saw the REAL price I was paying for "the nicer things in life" that extended waaaaaaaay beyond the actual price tag of these objects. I was a slave to the job, I never saw my kids during the work season, I was too tired to play and have fun... you name it - we've probably all experienced it.

I just came to terms with the fact that if we would "settle for less" as far as keeping-up-with-the-Joneses goes, I wouldn't have to kill myself each year.

And we're still a work in progress. I don't want to set myself up as some shining example by any means, because until the day arrives that I'm debt free, I won't count myself a success... But I WILL say that the biggest and most important change in our lives is the one that's evolved over the past year or two to where my wife and I have actually LOST the desire to impress the neighbors - and, instead, are driven to be under the thumb of NO creditor ever again.

If the thought of having a monthly cost of living of $1500 appeals to you more than driving a BMW, then you should look into Dave Ramsey.

Originally Posted by delphied

In a hundred years it just wont matter. Smell the roses along the way.

Exactly!!! I'm so damned tired of giving up my family life to pay for crap I don't need, that my priorities have shifted. I'd rather drive a beater than miss my kids growing up. I'd rather have to pack a lunch for work than not be able to coach my boys' basketball teams! I'd rather make my sprayer/mower/etc last one more season so I can take my children back to see their great grandparents before their gone from this world.

We each have our own roses to smell. And I've found that my life is actually MORE fulfilling by not having any of MY roses come in the fragrance "new car".

I'm not saying that those who don't see it my way are wrong. To each their own. But I am saying that buying stuff won't make any one of you happier than I am right now (without the baubles and trinkets)... and at least one of us will OWN everything in our life and have the freedom to spend as much or as little time as desired with the business while still fairly young...

[ALC-GregH]

Originally Posted by PROCUT1

And to add.

Now your customers, who you have been mowing for $30 are getting flyers in their mailboxes everyday with $20 prices.

They want you to match the price or they will try them out.

What now?

It costs you more than $20 to do the lawn.

Now you post a "lowballer" thread or a "how can he work so cheap" thread here on lawnsite.

But in reality.

The guy at $20 is making a lot more money at that price than you are even if you doubled his price.

Until he decides to grow................

This my friend is the exact reason I want to work by myself on a small customer base. For me, I can bill $40 per hour and make a good living after expenses. I don't want 50 customers, all I need is 30 total depending on the size. In my area it's more open with larger lots so I'm billing out $45-75 properties. If I can gross 2K a week, I'll could almost make double payments on my mortgage. My long term goal is to make enough to pay off the house in 5-7 years, again depending on the amount of work I get. I only have a few (one hand full) repeat customers after my first year that said they will stick with me from here on out. They like me personally and said they would rather have me take care of their place for a premium (which I don't charge by the way) then have someone they don't know be on their property. If I can get to 30 of these type, I'll be set. It's finding them that's the hard part. I could care less about puffing my chest saying I have 200+ accounts and the ones that do it are probably the same guys that are a carbon copy of your real life experience that you posted here. Thank you by the way for posting your story, I feel it to be quite true and regardless of what others may say, I totally agree and will continue to reach for my goal of 30 personal customers that want me for life. I'm a shy and polite person around strangers which makes it hard to sell sometimes. It's only after I know them well that I feel comfortable working with them.