Register free!
Search
 
     

The Green Industry's Resource Center


Click for Weather
Reply
 
Thread Tools Display Modes
  #1  
Old 08-09-2013, 10:32 PM
bwanderson79 bwanderson79 is offline
LawnSite Member
 
Join Date: Jun 2012
Location: Humble, TX
Posts: 55
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.
Reply With Quote
  #2  
Old 08-09-2013, 10:38 PM
Jaybrown Jaybrown is offline
LawnSite Senior Member
 
Join Date: Jan 2013
Location: Toronto Ontario
Posts: 583
Anyone ever had problems with payroll and cash flow?

Advertise and get more work. Hand out a ton of flyers. Minimum 5000
Reply With Quote
  #3  
Old 08-09-2013, 10:43 PM
Mark Oomkes Mark Oomkes is online now
LawnSite Fanatic
 
Join Date: Dec 2000
Location: Grand Rapids, MI
Posts: 5,703
Negative cash flow will only be exacerbated by more work.
Reply With Quote
  #4  
Old 08-09-2013, 10:49 PM
JB1's Avatar
JB1 JB1 is online now
LawnSite Fanatic
 
Join Date: Feb 2000
Location: From the hills of beautiful Southern Indiana
Posts: 5,769
Sounds like maybe your not ready for an employee now.
__________________
Reply With Quote
  #5  
Old 08-09-2013, 11:17 PM
Southern Heritage Southern Heritage is offline
LawnSite Member
 
Join Date: Oct 2012
Location: Birmingham Al
Posts: 143
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.
Reply With Quote
  #6  
Old 08-09-2013, 11:18 PM
newguy123 newguy123 is offline
LawnSite Bronze Member
 
Join Date: Sep 2012
Posts: 1,013
Quote:
Originally Posted by JB1 View Post
Sounds like maybe your not ready for an employee now.
Yeah this might be true...how many properties do you maintain on a weekly basis, and what equipment are you using?
Reply With Quote
  #7  
Old 08-09-2013, 11:40 PM
cpllawncare's Avatar
cpllawncare cpllawncare is offline
LawnSite Silver Member
 
Join Date: Apr 2011
Location: Greenville, SC
Posts: 2,644
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.
Reply With Quote
  #8  
Old 08-10-2013, 12:19 AM
Vecchio Lawn Care's Avatar
Vecchio Lawn Care Vecchio Lawn Care is offline
LawnSite Senior Member
 
Join Date: Apr 2012
Location: Bel Air, MD
Posts: 485
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.
__________________
18 Years Old Solo
Chevy Trucks
John Deere Mowers
Echo Power Equip.

Working Hard.
Reply With Quote
  #9  
Old 08-10-2013, 02:05 AM
seabee24 seabee24 is offline
LawnSite Senior Member
 
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.
Reply With Quote
  #10  
Old 08-10-2013, 06:03 AM
123hotdog's Avatar
123hotdog 123hotdog is offline
LawnSite Senior Member
 
Join Date: Aug 2012
Location: Bristol TN
Posts: 420
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.
__________________
Licensed and Insured
Operating since 2007
1993 Isuzu NPR dove tail open bed 4cyl diesel
1978 F-350 Dump Truck
1988 Z-71 Chevy 4x4 Meyers Plow
2005 Chevy HD 2500 6.0
2013 61" Bad Boy Outlaw XP 36 Vanguard
2013 54" Bad Boy Outlaw Stander Kawasaki
2014 48" Wright Walk Behind
1995 36" Scag Walk Behind
Reply With Quote
Reply

Thread Tools
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off

Forum Jump





Powered by vBulletin® Version 3.8.6
Copyright ©2000 - 2014, Jelsoft Enterprises Ltd.
Copyright ©1998 - 2012, LawnSite.comô - Moose River Media
All times are GMT -4. The time now is 10:46 AM.

Page generated in 0.10227 seconds with 7 queries