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  #1  
Old 07-05-2014, 12:42 PM
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TMN Guy TMN Guy is offline
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Creating a Moat or Barrier to Entry

I have been reading through this site for about month or so and a recurring thing I see over and over is a dislike/hatred for lowballers, how easy it is to start cutting lawns and how everyone's area is over saturated with guys who are just wanting beer money.

When I started cutting lawns earlier this year, I called the local city hall and asked what licenses or permits that I would need. I was very surprised to find that I didn't need anything at all!!! Liability insurance was not required, no permits were needed and I don't even have to collect sales tax. The only thing the city required was a $10,000 bond on record if you want to hand out flyers door to door. And even then it's not really enforced since the lady at the insurance company had never heard about it and had to call the city to find out what they actually wanted.

Anyways, it got me thinking about what could be done to create a "moat" for lawn services. A moat is something that, like in the old castle days, slows down entry. It doesn't completely protect the castle, just slows down the attacker or dissuades them from attacking.

Almost all industries have a moat. Some are based on startup costs. UPS and Fedex have a moat that is based on size. Small startups cannot even think about competing due to the tons of cash needed to get into the industry. Even companies that have tons of cash (like DHL) cannot compete.

Other industries use licensing as a moat. Plumbers, electricians and even taxi drivers require a license or permit just to work in that field.

If there were a way to create a moat for lawn services, what would be good and would you even want to do? Things like trying to get local ordinances that require mandatory liability insurance, a lawn service license or permit, or some other thing that would make it prohibitive for just anyone with a mower to start cutting lawns.

What do you all think?
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Old 07-05-2014, 01:10 PM
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jrs.landscaping jrs.landscaping is online now
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Just what we need, more government involvement regarding small business.

Guys that complain about lowballers should concentrate more on themselves and less on the "competition" IMHO.
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Old 07-05-2014, 01:24 PM
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TMN Guy TMN Guy is offline
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Quote:
Originally Posted by jrs.landscaping View Post
Just what we need, more government involvement regarding small business.

Guys that complain about lowballers should concentrate more on themselves and less on the "competition" IMHO.
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I understand what you are saying about more regulation. I hate big government too, but I'm not just looking for legislative solutions. That was just an example to get people thinking about it.

For example, I am thinking about answering lowball Craigslist ads and trying to explain to them why lowballing is bad. The average price on craigslist where I am is roughly $30. If all the ads had a minimum of $40, it would benefit everyone. The customer's expectation would be $40 instead of $30 since there are no lower prices advertised.
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Old 07-05-2014, 01:28 PM
whiffyspark whiffyspark is online now
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You cut grass.

Any village idiot can do it.

No need for a license
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Old 07-05-2014, 01:30 PM
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jrs.landscaping jrs.landscaping is online now
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Do you think they'd care?

I like lowballers, they handle the customers I wouldn't want and they don't have the resources to compete for my customers.

I handle my business and they do the same.......
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Old 07-05-2014, 01:38 PM
larryinalabama larryinalabama is online now
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Quote:
Originally Posted by jrs.landscaping View Post
Just what we need, more government involvement regarding small business.

Guys that complain about lowballers should concentrate more on themselves and less on the "competition" IMHO.
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Well said!

There is no barrier to enter this business, other than a lawnmower.

I started out with middle of the road pricing, meaning if I bid 75$ on a yard, some would bid 50$ and some 100$, but most would be close to 75. I now price a little higher.

In my area there is only a few ways to get customers, low price, or do noticibly better work than everyone else, and finding people who for the first time are hiring a lawn service.

My area is extremely tough, people seem to be loyal to there current lawn guy, and theres a bunch of them and most do nice work.

The things that separate me from the average lawn service...... Im clean cut and alaways wear a shirt with a collar, I don't smoke, I don't try to gouge my customers with extras.
But the biggest reason I got chosen over a lot of other fellers is I have a 18' box truck crammed full of equiptment, most fellers have a ztr string trimmer and blower and that's it.

Last edited by larryinalabama; 07-05-2014 at 01:42 PM.
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  #7  
Old 07-05-2014, 01:49 PM
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TMN Guy TMN Guy is offline
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So I guess everyone is happy with what they make now and lowballers aren't really a threat, but more just an excuse for everyone to blow off steam and vent on this site.

I apologize for trying to find ways to raise the price floor.
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Old 07-05-2014, 01:55 PM
whiffyspark whiffyspark is online now
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Originally Posted by TMN Guy View Post
So I guess everyone is happy with what they make now and lowballers aren't really a threat, but more just an excuse for everyone to blow off steam and vent on this site.

I apologize for trying to find ways to raise the price floor.
It doesn't matter what industry you are in. There will always be a lowballer. Roofing, plumbing, electric etc they all have the same "problem"

I don't like calling landscapers lowballers because you don't know anything about their business. Just because you need XX to turn a profit doesn't mean they do.

Find a good management company and work with them if you want to build a business
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Old 07-05-2014, 01:58 PM
larryinalabama larryinalabama is online now
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Originally Posted by TMN Guy View Post
So I guess everyone is happy with what they make now and lowballers aren't really a threat, but more just an excuse for everyone to blow off steam and vent on this site.

I apologize for trying to find ways to raise the price floor.
Competition is what it is, and in this tough economy we have more lawn services than ever.

Some people just want there grass cut as cheaply as possible, cant really blame them.

To demand high prices you have to be Unique, as well having equiptment that makes you money.
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  #10  
Old 07-05-2014, 01:59 PM
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jrs.landscaping jrs.landscaping is online now
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Originally Posted by TMN Guy View Post

I apologize for trying to find ways to raise the price floor.
No need to apologize, there is no way to raise the rates. Customers have a budget of x and that's what they're sticking with.

The trick is go after high value accounts or go after volume and become more efficient to compete with " lowballers"
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