Register free!
Search
 
     

The Green Industry's Resource Center


Click for Weather
Closed Thread
 
Thread Tools Display Modes
  #1  
Old 01-02-2014, 08:59 AM
georgialawn88 georgialawn88 is offline
LawnSite Senior Member
 
Join Date: Apr 2012
Location: atlanta georgia
Posts: 877
My personal take on success/growth/profitability/business

This may turn into a long read but may be a good topic of conversation….

I as many of you or most of you want success. right? Lots of people say bigger is better and in some instances it is But what if you could make the same amount of money with 3 trucks as you can with say….. 8 trucks? all these numbers are just a theory and not true but you can see where I'm going with them. Say each truck brings you in 3,000 net/profit. All expenses have been paid and thats what you put in your pocket. Say you run a truck and you have 2 other trucks being ran. your spouse does the books and you still answer the phone. Because you don't have to pay someone on your truck you make 5k instead of 3k. So your total is 3+3+5=11k a month profit. good living(in my area at least) oh and by the way you do this out of a garage you built in the back of your home.

Next, you are a big shot and you have 6 trucks running right? you're bringing in 18,000 a month!! Because you have 6 trucks running you're no longer able to be on the truck and you need a sales manager/ general manager and with 6 trucks you also need a warehouse and a secretary. so lets do the numbers…

18,000 - warehouse500.00 - managers salary3500 - secretary2000.

total profit: 12,000 in your pocket.

So for 3 more trucks you make 1 more thousand a month. However you don't have to do the work anymore and you have people run the business for you. Your profit really didn't go up much but you really don't have to work anymore. More customers = bigger headache but you have people in place to help you deal with all that.

So theres ups and downs in both and theres not a wrong way or a right way. These numbers do not apply to everyone as there are different parts of the country that cost of living is up or down but you get the idea. My point is at least around my neck of the woods if you see a company that has 8 trucks on the road everyone around here thinks they're mega rich and they see a company with 3 trucks or 2 trucks on the road they're not making all that but in reality they really could be making the exact same thing. Also something to think about that 3 truck company could have grown with no debt and every things paid off. The 8 truck company could have 700.00/month payments on their trucks and equipment and in reality making less then the other company. Theres not really a wrong way to run the companies either is fine but its just some numbers i thought of before heading out for the day. Im sure I'm completely wrong on all this but its just my thought of the day…

Thoughts?

thanks and happy new yr to all!
  #2  
Old 01-02-2014, 09:18 AM
larryinalabama larryinalabama is online now
LawnSite Fanatic
 
Join Date: Jan 2008
Location: Ragland Al
Posts: 9,458
A successful business is one that rewards you with Financial Security. Doesn't really matter how many trucks you have and even if your SOLO.
  #3  
Old 01-02-2014, 09:24 AM
georgialawn88 georgialawn88 is offline
LawnSite Senior Member
 
Join Date: Apr 2012
Location: atlanta georgia
Posts: 877
Quote:
Originally Posted by larryinalabama View Post
A successful business is one that rewards you with Financial Security. Doesn't really matter how many trucks you have and even if your SOLO.
larry, i agree 100% I just see on the picture forum and lots on here bigger is BETTER!!! i agree with your statement
  #4  
Old 01-02-2014, 09:24 AM
whiffyspark whiffyspark is online now
LawnSite Platinum Member
 
Join Date: Jul 2011
Location: Chesapeake beach
Posts: 4,592
Quote:
Originally Posted by larryinalabama View Post
A successful business is one that rewards you with Financial Security. Doesn't really matter how many trucks you have and even if your SOLO.
You don't have financial security if Youre solo. All it takes is one mistake and Youre done. Espically once you get older
Posted via Mobile Device
  #5  
Old 01-02-2014, 09:38 AM
larryinalabama larryinalabama is online now
LawnSite Fanatic
 
Join Date: Jan 2008
Location: Ragland Al
Posts: 9,458
Quote:
Originally Posted by whiffyspark View Post
You don't have financial security if Youre solo. All it takes is one mistake and Youre done. Espically once you get older
Posted via Mobile Device
Not true at all my friend, Financial Security means you have the ability to deal with lifes set backs. The option to "hire" someone to work for ya is alaways there.
  #6  
Old 01-02-2014, 09:51 AM
whiffyspark whiffyspark is online now
LawnSite Platinum Member
 
Join Date: Jul 2011
Location: Chesapeake beach
Posts: 4,592
Quote:
Originally Posted by larryinalabama View Post
Not true at all my friend, Financial Security means you have the ability to deal with lifes set backs. The option to "hire" someone to work for ya is alaways there.
Then Youre not solo. Lol
Posted via Mobile Device
  #7  
Old 01-02-2014, 10:04 AM
CNYScapes's Avatar
CNYScapes CNYScapes is offline
LawnSite Senior Member
 
Join Date: Mar 2003
Location: very cold place
Posts: 732
I definitely agree with this statement to a point. The only part you didnt add to the end of it is that now that you have a manager, secretary and warehouse to work out of you are now ready for REAL GROWTH. Being able to afford those things is the foundation for a much larger company. Just adding 3 trucks is barely enough to break even at that point, but add 6 more trucks for a total of 9 and now you are making $21k per month.

Once you make that investment in overhead you can grow quickly as long as you have the money to market properly which will cost big$ to grow quickly.

So I do see your point, sometimes staying small is the best way to go, but I would say dont make that next jump in to manager,secretary, warehouse unless you are really ready to GROW.
  #8  
Old 01-02-2014, 10:19 AM
djagusch djagusch is online now
LawnSite Gold Member
 
Join Date: Mar 2006
Location: MN
Posts: 3,413
Your looking at just the cash at the end of the month. Asset building is something you didn't account for.

While a garage out your house is a asset it really can't be sold unless you move. Having a shop built on a stand alone property is a asset(also a liabilty).

The 8 truck outfit will also have more assets then the 3 truck company. How management rotates them based off cost/payment is more about management style then debt.

The 8 truck sounds more of a stand alone biz model which has more value when you add things up on a balance sheet.

Lastly solo isn't a long term biz model. Its making yourself a job. You go down the biz goes down. The I will hire someone "if" something happens changes the biz model greatly. Will the solo income cover paying a employee and yourself (that is producing little work due to being down)? Maybe short term a couple months, but long term you will need to increase income to offset the cost the new employee.
Posted via Mobile Device
  #9  
Old 01-02-2014, 10:38 AM
georgialawn88 georgialawn88 is offline
LawnSite Senior Member
 
Join Date: Apr 2012
Location: atlanta georgia
Posts: 877
Quote:
Originally Posted by CNYScapes View Post
I definitely agree with this statement to a point. The only part you didnt add to the end of it is that now that you have a manager, secretary and warehouse to work out of you are now ready for REAL GROWTH. Being able to afford those things is the foundation for a much larger company. Just adding 3 trucks is barely enough to break even at that point, but add 6 more trucks for a total of 9 and now you are making $21k per month.

Once you make that investment in overhead you can grow quickly as long as you have the money to market properly which will cost big$ to grow quickly.

So I do see your point, sometimes staying small is the best way to go, but I would say dont make that next jump in to manager,secretary, warehouse unless you are really ready to GROW.
I 2nd this. If this situation is in place and you're at 3 trucks or whatever the tipping point is you have to make a decision. Are you gonna go for it or are you happy with where you're at. it almost seems in this case 3 trucks or 10. which do you want. But you're right to go from 3-10 it doesn't need to tie 15 yrs or its almost not worth it. if it took you 6 yrs to get to 3 trucks and you don't have the money to grow super fast to 10 and it takes you 15 yrs more then likely unless you started at 20 yrs old you're getting old. So you spend your whole life getting to 10 trucks and now you're ready to retire and it took so much heartache to get to those 10 trucks. so 3 or 10. which is it. I kinda like to stay right there at that tipping point. or at least thats what i say right now… 11-12 k a month in my area is living very very well. and if you have everything paid for its even better
  #10  
Old 01-02-2014, 10:46 AM
CNYScapes's Avatar
CNYScapes CNYScapes is offline
LawnSite Senior Member
 
Join Date: Mar 2003
Location: very cold place
Posts: 732
$11k to $12k per month is good money any where I know of! I am sure if you dont hire the right employees getting bigger could be a nightmare. I have been guilty of hiring the first breathing applicant when I am desperate!

Definitely will have lower blood pressure with a small operation!

But then again, I have not been in the field for about 8 years and I enjoy having the freedom it gives me. The only way I could see myself back in the field is if/when I move down south to start over again. Even that would only be for a very short time until things are rolling as my skills are much more valuable selling the work and managing.
Closed Thread

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.com™ - Moose River Media
All times are GMT -4. The time now is 11:47 AM.

Page generated in 0.08838 seconds with 7 queries