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  #1  
Old 02-11-2013, 10:35 PM
getdown getdown is offline
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Join Date: Jun 2012
Location: Florida
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Crews and Summer Time Profitability

Trying to get a grasp on the concept of going from solo to having a crew doing all the work. I have ~50 accounts, which during the summer time, all get serviced weekly. So, roughly 10 accounts a day. Each account is postage stamp size. Two man crew ,$10 each, 8 hour day, $160 per day in labor costs (excluding works comp, taxes, payroll,etc). Now, with that said, when all costs are really applied, it is costing more like $200/day. Now, these accounts pay me $80 a month (even in the winter when I service 2x monthly). But in the summer, that means that they are getting $20 cuts. A day in which I cut 10 lawns, only grosses me $200...which would all go to employee wages. Are the only options for profitability with a crew (a crew that operates without me) to have the employees do more than 10 properties a day/raise the cost of my service?

I'm just trying to settle things in my mind. The hardest thing to have encountered so far is definitely going from being a solo startup getting accounts, to running a business that I work "ON" rather than "IN". I want to spend more time hitting the road and setting up accounts for me to go "solo" on and eventually have a second crew take over before starting over for a third campaign...

...but it seems to me that in doing so I am basically saying that my first crew will be completely profit-less...any possibly even costing me money.

How would you guys go about the 50 $80 accounts (all 1/4 acre or less) and applying a crew/employees to take care of it so I can work on the business and still be profitable...I'm a little lost.

Please don't be harsh. I come here seeking your knowledge out of respect for what you all know...I'm not looking to be told I'm an idiot...I know that I need help, and I gratefully seek it.
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  #2  
Old 02-11-2013, 10:43 PM
205mx 205mx is online now
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I guess if you have another job this would work. Then you could keep growing from there. If not, I'd stay in the field.

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Old 02-11-2013, 10:55 PM
getdown getdown is offline
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I work security at night to subsidize my life ( we don't have kids, and security pays all our bills), but I would really like to be able to move towards being more of a business owner and getting rid of the second gig. I definitely realize that with the status quo, I need to stay in the field...I can choose to hire a helper to spend less time in the field and more marketing, but that cuts into my profit margin. Is it just that 50 accounts isn't enough to move into having hired labor solely in the fields? Is it just that it requires a larger scale? Like an operation with 100+ accounts? To justify and make having 2 employees full time? Then you expect them to get 20 yards a day done, rather than just 10? Costs are the same, but double the production/cash flow? Is that what it comes down to, and hypothetically, is 20 yards a reasonable expectation for two men? Thanks guys...
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Old 02-11-2013, 11:02 PM
205mx 205mx is online now
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Well, for one, you have to have enough work two hire two guys. If they don't get enough hours, they won't be working for you long.

Also, the amount of income is important as well.

Yes the number of accounts is important because what happens if 7 lay off during the next season?
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  #5  
Old 02-11-2013, 11:06 PM
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knox gsl knox gsl is online now
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I think that you are on the right page but need to tweak the numbers some. I would say that in your numbers labor cost is too high and should be closer to 30% of your gross on mowing crews including the WC and tax. I would look at hiring a guy to work with you and try to knock out all the mowing 2.5 or 3 days and then spend the extra time on other projects or sales. Maybe next season you will have enough work to get another employee and start the process over.
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  #6  
Old 02-11-2013, 11:07 PM
getdown getdown is offline
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So with 1/4 acre lots at $80/month, if I want to hire two guys to take over and still turn a decent profit, I really shouldn't even think about doing it until I get in the 75 account range...In the meantime, I can probably hire a part time helper and see some of my profits go to paying wages, but free up some more time for marketing/expansion...thoughts?
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  #7  
Old 02-11-2013, 11:09 PM
205mx 205mx is online now
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Depends. Business debts, tax rates in your state, driving distances. Actual figures. There's no magic number. You need to sped a few days reviewing your finances and draw up some reports from 2012.
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  #8  
Old 02-11-2013, 11:11 PM
205mx 205mx is online now
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Close to 200 probably
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  #9  
Old 02-11-2013, 11:18 PM
getdown getdown is offline
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Dang...so how would I manage handling 200 accounts with just one helper in the meantime? Is it just that $80/month is too little? Trying to think...200 accounts weekly (summertime) is 40 lawns a day...is that possible with two people, even if they are all in the same neighborhood?

It would obviously be profitable...10 hour days...$100+/day in wages for my helper, but 40 lawns daily at $20 a piece grosses me $800 daily...but I need to figure out how it would be feasible. I can't imagine how myself and one other guy on a line trimmer could do 400 a day...Grossing $800/day, I could easily hire 2 or 3 men to do this and remain profitable. I would think that I could probably hire two employees more in the 100 accounts range...then I am grossing $400/day and paying $200+ in labor...netting a little less than $200. Obviously, not very profitable in the meantime at all, but would allow me to pocket ~$150 a day while marketing for expansion...


Thoughts?
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  #10  
Old 02-11-2013, 11:33 PM
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Above Par Lawns Above Par Lawns is offline
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Quote:
Originally Posted by getdown View Post
Is it just that $80/month is too little?
I charge family members more than that per month. After gas, mileage, and the cost of business you're only making like 10-13 per yard. WAY to low. $25 MINIMUM per cut. Adding just 5 dollars per visit to each client will really help your profit margins. The people that drop you for an extra 20 per month are cheap and probably a pain in the neck anyways.
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