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  #161  
Old 03-03-2011, 02:39 PM
Plantculture Plantculture is offline
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Just read both threads. What an education! Sobering and motivating
Thanks procut1 for the read and good luck. I'll buy you a beer if you come to FL
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  #162  
Old 03-03-2011, 03:53 PM
GrassesGuy GrassesGuy is offline
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Location: Omaha Nebraska
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Quote:
Originally Posted by torotorotoro View Post
you should take a better look at your investments.yeah we are not as bad as the coast here but there are over 7000 houses for sale right now.that is higher then it has ever been. people here have the same problem getting financing as the rest of the country.which slows things up even more.wait till those two people who pay rent stop paying,and trash your house.wait for the time when all your mowing $$ goes into fixing s*** holes. good luck with all that equity. i should start a thread how to fail at real estate.
One of tenants is section 8 and the government pays the rent. Not to mention she keeps the house imaculate better than mine. I should hire her to clean my house. Replacing carpet and painting is covered with the deposit. Tthe worst is over homes and once obama Rama is gone in 2012 then we can start rebuilding again.
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  #163  
Old 03-03-2011, 03:56 PM
GrassesGuy GrassesGuy is offline
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Location: Omaha Nebraska
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Ya some of the mowing goes into the houses sure, so what I'm building equity. I do landscaping also and other stuff as well, I'm a machine!

edited: please watch the language.
edited by Majortom
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  #164  
Old 03-03-2011, 06:29 PM
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PROCUT1 PROCUT1 is offline
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Quote:
Originally Posted by GrassesGuy View Post
Ya some of the mowing goes into the houses sure, so what I'm building equity. I do landscaping also and other stuff as well, I'm a machine!
I used to be. Then I got married
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  #165  
Old 03-03-2011, 10:49 PM
GrassesGuy GrassesGuy is offline
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Location: Omaha Nebraska
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Quote:
Originally Posted by GrassesGuy View Post
Ya some of the mowing goes into the houses sure, so what I'm building equity. I do landscaping also and other stuff as well, I'm a machine!

edited: please watch the language.
edited by Majortom
Ground control to Majortom! I censored brother!
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  #166  
Old 03-03-2011, 10:50 PM
GrassesGuy GrassesGuy is offline
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Quote:
Originally Posted by PROCUT1 View Post
I used to be. Then I got married
Classic! It will get better man you just gotta ride out the storm.
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  #167  
Old 03-03-2011, 11:46 PM
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cms289 cms289 is offline
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This has been a great read. Lots of thoughts, some great, some not so great.

I guess I will put in my two cents. I am smaller, but have owned a much larger company in the past (sold it for flight ratings). Credit is a wonderful thing, leverage (when used properly) is equally wonderful.

All that said, on the landscaping side I only do contract type work now, and they either have money on account or an auto bill on the day of service. I started doing this years ago, when I had several people not pay (took a huge loss one year, that ended it for me). I have lost bids due to this, but I am ok with that. I am not a bank, if they want the service, they pay for it when it happens. I understand the commercial side of it, but even when I did that I never did 60 or 90 net. The longest I did was 30 net stuff. I understand some of the big companies do not think much of what we do, and it is not much money to them, but if that is the case, then why not pay it quickly.

I think too many smaller guys who are trying to grow take risk they should not so they appear to be a big player. I think what happened here was someone wanted to grow, and was worried about appearances, so he took the deal offered him. And he was right, if his credit had not gone away he would have been fine. But banks have no loyalty to you at all. Credit lines come and go, they change without notice. That is a known thing. I think he would have done well to be honest that he could not cover that long. Even if he had to give them a grand or two discount to have it paid on completion, it would have been worth it in the long run! I have lost clients due to my terms, but I have also had several that said no way, come back later and do it my way.

Net 60 or 90 is a sales tool for manufacturing, and not a good idea for service. Our margins are much too low, and since we are service based, it is very difficult to reposess what we do. How to you unmow or in this case, un stripe. You are carrying all the risk.

I hope the move works out great for you. The best lessons are the hardest when you learn them. I think you have learned a great deal. I would stop with the class warfare though. We all have a chance to be rich in this country. Some will get lucky, some will work hard and never get anywhere, and some will fail over and over.
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  #168  
Old 03-04-2011, 09:39 PM
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humble1 humble1 is offline
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Quote:
Originally Posted by PROCUT1 View Post
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
WHAT?!?!?!?!?!?
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.
NOW WHAT.

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
I htink procut puts probably one of the best threads on lawnsite, this is something anyone in buisness should read. It takes a real man to stand up in front of his pears and try to explain where he went wrong, so others don't do what he did. So Thanks Procut and sorry to hear things aren't going so well.
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  #169  
Old 03-04-2011, 11:25 PM
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J.R. Services J.R. Services is offline
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2012 Kubota ZD331 72"/2011 Kubota ZD331 72"/2010 Kubota ZG227 54"
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  #170  
Old 03-05-2011, 01:34 AM
ncknaklawns ncknaklawns is offline
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Join Date: Mar 2011
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I just realized the real difference between watching cash flow monthly and weekly. I just updated my tracking spreadsheet to do weekly as I let myself get close to the bottom. I made a big extra truck payment last Nov to save $900 in interest and now I'm getting close. When I tracked monthly I should have put February deposits under march and March under april etccc.... Now because the March income I was expecting hasn't arrived yet (because it usually doesn't until the last week), I'm startin to sweat. I know alot of talk on the thread goes into payin cash but financing stuff can really help you long term as long as you don't overextend- but how to figure- seems like a basic mistake I made. You have to gamble a little. Now I might need to go back to monthly insur billing on the trucks and not buy parts until I am out and need it.
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