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

[humble1]

BEST MONEY YOU COULD SPEND


Go down to the bookstore and spend 20-40 dollars. Get one of those biz plan dev books, or a running a biz for dummies.


Also if you care about your biz and want to do well, go to the SBA or SCORE office, they can help you. http://www.score.org/index.html


http://www.sba.gov/smallbusinessplanner/plan/index.html

[humble1]

Originally Posted by lifetree

Congratulations, $ 90 K a year is good money most everywhere ... it sounds like you've found your niche !!

Is this the exACT TRAP
90K gross
Net $.59
not making 90k

[Grits]

Originally Posted by humble1

Is this the exACT TRAP
90K gross
Net $.59
not making 90k

He did not say net or gross.

[willretire@40]

I really believe that companys just dont max out their trucks and have to much equipment on one truck.

[AI Inc]

This guy ( procut) is speaking the truth. I had a customer I subbed from a few yrs ago. He only did upscale installs . Ran 12 crews , worked his azz off and lost 200k in 06.
When he started to get behind on paying me I asked him if he was making any money. He answered " Im so busy working , I dont have time to make any money"

[Five points, On. Can]

About the rental thing, The last two years I rented a tractor to prep for sod work. At a cost of 5000 total, not including pick up and drop off time. I often thought I should just buy one. I didn't. The days I rented it I made good money after all was tallied. The last two years a did a pile of sod , this year probably will do very little if any. So now I don't have to worry about making a payment on what may be just sitting in the yard,which would be being paid for by my lawn route.

I loved the comment about the mulch , deliver the next day but didn't have any. I have been there. This year my route is full, with some time left for odds and ends. I'm going to learn to say no and not be greedy. I love what I do ,One truck One helper, on site feeling the sun on my face. Thats why I got into this.

[Junior M]

Originally Posted by willretire@40

Another piece of advice is.

GIVE YOUR SELF A SET PAYCHECK EACH WEEK.

If you just take the money out the business account when ever you want you will be wondering where your money went.

Thats oh so true, that has actually hurt us this year, we didnt do a thing like that, we just payed our expenses and divided up what was left between the two of us and it hurt us in the end because we didnt have the money to expand, to buy a truck for me, or to buy a trailer out right, or to go buy a used piece of equipment..

Originally Posted by PROCUT1

I dont think there is any set standard.

Thats why its so hard.

You dont know that once you hit 200 accounts your expenses are going to triple and you;ll be holding on for your life.

Its different for different people.

Different circumstances too.

For example.

I used to pay 1500 a month plus utilities for a shop and office. Thats a lot of lawns to pay for that.

How about the guy...lets say...whos parents own a farm and he can park all his stuff there for free...

Hes ahead of the game.

Me...I bought a house that is on 4 acres of commercial property with a barn. I moved my office which is a construction trailer and everything I own here.

The business still pays rent but it pays rent to me and that goes to a mortgage for something I own.

Instead of 2 electric bills I have 1. instead of 2 internet bills I have 1. etc etc.

Instead of my personal salary paying all the mortgage like i did for years, the business now pays most of it in rent.

So the business saves in rent and utilities and I save personally because of the rent income.

Before I bought this place I didnt have a choice. I couldnt operate out of my house at the time. So I had a mortgage and on top of that the full boat shop rent and all the extras that come with that.

I now buy used older trucks. They cost me a fraction of what the newer stuff did.

My hobby is mechanics. So ill buy a 1995. Pay cash for it. Tune it up. Paint it my colors and down the road it goes. No payments, cheaper insurance.

If work slows down, I dont have payments over my head. The truck can stay parked and doesnt cost me a thing.

I dont finance equipment anymore. Same thing. Buy used, make it good as new and no payments, no worries.

I no longer will carry employees. If work is slow, they go home. I spent way too much money making busy work for them and that comes right off the bottom line.

That makes me work harder. If I dont have work for the employees....they dont make money....if they dont make money....they wont stay.....

So I have to make sure I sell enough work for them....And when theyre working im making money....so its all benefit...

See, all these changes I made were out of necessity. And I would have never made them unless my last business crashed.

Your mind and the calculator will play tricks on you.

When you think about buying that new truck or new mower, you will whip out the pen and paper and calculator.

When you do the numbers and figure in the payment......It will look like a no-brainer....You can buy it and the benefit of the machine will outweigh the cost....

Oh how many times I did that. And to top it off my major was accounting.

Its little decisions you make all along the way that come together almost all at once and then you;re sitting there saying "What the hell happened?" "I was on top of the world a couple months ago"

That is the way I want to run my business once I go full time..

Dad had the same theory, try and stay as lean as possible, used trucks that arent costing you money when they are sitting, used attachments and equipment. And when he started running 2 crews (installing underground utilities) he would have one truck break down and yet he would still have to get those 2 jobs dug when he couldnt. Well that went on for a while, and finally the guy at the Power Company said "Ernie, dammit, I need you on 2 jobs, but you cant be there cause your running old junk trucks, if you are goin to keep goin like this I am goin to have to get rid of you." Really running older used trucks could hurt you in the beginning, but if you could pull it through to get a couple older reliable trucks, I am sure it would be good on your part. In fact, I know it would, one of Dads friends that started his company around the same time Dad did had the same theory as Dad and he is still in business today, where Dad isnt because he had to buy new equipment, new trucks and trailers to keep up with the demand, and in the end, it put him under because the work wasnt there...

Originally Posted by letsplay

That also drives me crazy that so many people on this site tell contractors to buy buy buy instead of rent equipment. If a guy asks should I buy or rent a skidsteer for a one month install at say 2000 dollars and several folks say stop wasting your money and buy........ But he only uses it for two small jobs a year. Goes back to your slowly going under and not knowing it. That rental looks a lot better a year down the road when you can't pay the rent.

This is true in most cases, but for my business that needs that skid to grow, but doesnt have the work for it 5days a week, it is a whole lot easier to buy than rent. For example, I had over $5,000 go out in Rental this year, yet I still cant seem to justify the machine because I dont have the work. Yet, I've had to turn numerous jobs down because I cant charge $500 to dig 50ft of water service when the guy up the street is goin to charge $100, there are pros and cons to both, and that seems to be with everything..

[HOOLIE]

Whoa...I thought the 3 Keys to Success were...

1- A business license
2- Insurance
3- NOT putting flyers on mailboxes

Seriously...great thread PROCUT. Nobody can sum up how to do, or not do things right in just a few paragraphs. But you have everyone thinking at least. Whether people want to admit it or not, most of us are just guys who like to do lawn work. Beyond that, not many guys have real business experience, managerial experience, financial expertise, etc. Those are SKILLS that have to be learned, and hopefully not 'on the fly' to really grow and maintain a successful, profit-turning business.

The thing that scares me is how many guys think your thread boils down to "stay small" That's not the message. Get out there and learn as much as you can on how to run a business.

[johnnybravo8802]

The truth is-I knew this 15 years ago and was preaching it back then. There are a lot of businesses out there that think they are doing well until tax time-I was one of them. It's all about the perks-you have a new truck, new trailer, new equipment and think you are hitting a lick and you try to convince everybody that you're doing something. You've got $300 in your pocket and don't think twice about blowing it in a split second on a new blower. That's where I was and where a lot of new people go until 2-3 yrs. down the road when they have worn out equipment, they're tired from working all of the time, and they have no money in the bank or any 401K. Again, I've been there and struggle every day to not go back there. I still say, and I've been saying it for over 15 years, is that the only people making any money is the guy selling the equipment to you-all those new suckers every year who think it looks easy and they are going to make some jack!!!!!

[JohnnyRoyale]

Originally Posted by johnnybravo8802

and I've been saying it for over 15 years, is that the only people making any money is the guy selling the equipment to you-all those new suckers every year who think it looks easy and they are going to make some jack!!!!!

I agree with you.