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Old 08-09-2013, 11:32 PM
bwanderson79 bwanderson79 is offline
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Join Date: Jun 2012
Location: Humble, TX
Posts: 57
Anyone ever had problems with payroll and cash flow?

I started this business a year ago as a part time business while attending college. This summer I have gone full time with and now have one employee who has been helping me since mid-June. I am finding that meeting payroll puts a financial strain on the budget. I depend on this income to support my family and I only bill my customers at the end of the month. I pay him $10/hr, which is the standard rate in my area.

My question is how do you guys deal with payroll and cash flow issues? Any advice in these areas would be appreciated. Thanks.
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Old 08-09-2013, 11:38 PM
Jaybrown Jaybrown is offline
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Location: Toronto Ontario
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Anyone ever had problems with payroll and cash flow?

Advertise and get more work. Hand out a ton of flyers. Minimum 5000
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Old 08-09-2013, 11:43 PM
Mark Oomkes Mark Oomkes is offline
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Location: Grand Rapids, MI
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Negative cash flow will only be exacerbated by more work.
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Old 08-09-2013, 11:49 PM
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JB1 JB1 is online now
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Location: From the hills of beautiful Southern Indiana
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Sounds like maybe your not ready for an employee now.
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Old 08-10-2013, 12:17 AM
Southern Heritage Southern Heritage is offline
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Location: Birmingham Al
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Make more money or drop your overhead (employee, loans etc)
I will say this no matter how big you get. Employees will always be your biggest payment.
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Old 08-10-2013, 12:18 AM
newguy123 newguy123 is offline
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Originally Posted by JB1 View Post
Sounds like maybe your not ready for an employee now.
Yeah this might be many properties do you maintain on a weekly basis, and what equipment are you using?
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Old 08-10-2013, 12:40 AM
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cpllawncare cpllawncare is offline
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Either your overhead is too high, your not charging enough, or you don't have enough work yet for a full time employee, I made that mistake last year had to cut my full time guy back to part time for a lil while until I got more accounts, I learned very quickly NOT to cut for $25 a week it's $50 a week min, three years of solo cutting was enough! it's time to hand the reigns over to the young guns.
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Old 08-10-2013, 01:19 AM
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Vecchio Lawn Care Vecchio Lawn Care is offline
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Join Date: Apr 2012
Location: Bel Air, MD
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Anyone ever had problems with payroll and cash flow?

My cousin maintains 40+ properties a week including two 6+ acre lots by himself. When he gets behind I help him out to get caught up. Usually once a week or twice a month. I wouldn't want a employee until I absolutely need one.
19 Years Old

John Deere
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Old 08-10-2013, 03:05 AM
seabee24 seabee24 is offline
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Join Date: Mar 2009
Posts: 619
Well answer this question so I could better advise you.

Which best describes your problem.

A. You pay your helper once a week or every other week, your customers pay you once per month. When your customers pay up, you can make payroll easy. When its the end of the month, pay roll is tighter. Some weeks its easy to write the checks and others its harder. but comes and goes in cycles. If you add it up on paper you don't have a problem and show a profit?

B. doesn't matter how they pay you. You constantly seem to be broke after writing payroll regardless of the time if month?

If your problem is "A". Then either save money to float you better, look into how you pay for other expenses and float time, can you bill weekly? Auto charge credit cards? Can you pay out helper every other week? Or re arrange the pay date to work better with your cash flow? Remember just because the pay period ended, does mean you have to pay up that day. You get 6 if you want to set that as a policy

If your problem is more like "B". You have money, you write payroll and then your broke again, always, every week. Your problem is you don't charge enough, pay too much for direct labor or have overhead expenses that are too high

I myself was surprised when looking up industry bench marks. While so things can be changed slightly, you would be surprised when looking at the % of where you should be spending your money and by how much it is. It said plain and simple 8-12% mangers salary. Thus sell a half million a year in work and if all you do is mange you should expect a salary of 50k per year. If you need more than that to live, then you have to sell more, cut other expenses or pick up other "jobs" like being on a crew or being a mechanic.

If you sell 100,000 in work you should expect to only take home 10k as a manger. You might also take home 16k more because you are also a labor. And maybe 5 k as a mechanic. But this is how you should try and set a budget.
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Old 08-10-2013, 07:03 AM
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123hotdog 123hotdog is offline
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Join Date: Aug 2012
Location: Bristol TN
Posts: 481
My business is similar

I have one helper. I pay him $10 an hour. I have 65 lawns and some of them are big hoa's. I work hard six or seven days a week. On the larger properties with not allot of weed eating, I don't take him. I limit him to the hard stuff with allot of weed eating. He also runs a walk behind and is learning to run a stander. He works 3 to 5 days a week. My labor rarely gets over 12% for the week. Of course that's not counting me.
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Operating since 2007
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1988 Z-71 Chevy 4x4 Meyers Plow
1997 Toyota T100 4x4 Meyers Plow
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1989 Toyota One ton Flatbed
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