1/2 Of A Business Gone in One Call

Discussion in 'Lawn Mowing' started by Sean Adams, Aug 4, 2002.

  1. Sean Adams

    Sean Adams LawnSite Gold Member
    Posts: 3,597

    I was talking to a guy on Saturday. He has been in business for 7 years now. Sounds like he has a nice operation (or should I say, had a nice operation). He was 5-7 employees deep and was primarily focusing on residential maintenance. This spring he was approached by a large industrial park. Mammoth in size and larger than he had ever tackled.

    To make a long story short, he bid on the property (over $100,000) and won the bid. His idea was to keep his residential accounts and hire more employees and purchase more equipment for this new account to be able to service it. He had difficulty doing this, so he dumped 1/2 of his residential accounts to be able to focus on this industrial park.

    He received a phone call last week. They were making budgetary cut backs for a new management company to come in and take over the property. In the process, this new management company brings along their own indoor/outdoor maintenance people. He lost the account.

    So now he is without his big "bread and butter commercial" account and he got rid of his loyal, well paying residentials. He said he might have to go out of business just like that.
     
  2. ProMo

    ProMo LawnSite Bronze Member
    Posts: 1,468

    i know a guy who dropped most of his resis to take on a gas station chain and hes history couldnt have happened to a nicer guy
     
  3. bubble boy

    bubble boy LawnSite Bronze Member
    Posts: 1,020

    we lost our biggest acc. last week. lawn has been dormant since the begining of june. was not that big a deal, as we do smaller places. not sure how big it was, but def. no more than 5 acres. still dissapointed. can't wait until they call when the lawn comes back. can you say price increase?

    come to think of it, last year we lost our biggest account (he moved). hope this doesn't become habit.

    i'm always leary of, as they say, having too many eggs in one basket.
     
  4. gogetter

    gogetter Banned
    Posts: 3,256

    Wow!. That just plain sucks!
    How much notice did they give him I wonder?
    Since he still has half of the residentials, could he cut back on employees (as bad as he might feel for having to do so), and just retain enough help to cover the remaining workload? At least until he can pick up some new work, and maybe not have to close up shop.
     
  5. Dennis E.

    Dennis E. LawnSite Senior Member
    Posts: 349

    The phrase "Never put all of your eggs in one basket" always comes to mind when I read about these mis-fortunes.
    Sorry he got hurt.I hope he can rebound and keep the biz going.
     
  6. Sean Adams

    Sean Adams LawnSite Gold Member
    Posts: 3,597

    As far as notice....none was given. They were not obligated to do so because....and this hurts.....I feel bad for this guy....he never had them sign a contract. He submitted a proposal and thought it was sufficient.

    He never used contracts because he had always worked with residential clients. I explained to him that a proposal is nothing more than that - work proposed to be performed. A contract is necessary to protect yourself and guarantee payment, cancellation rights, default, etc...

    I felt bad, because it was too little too late, but I told him to buy the maintenance contract at our site.

    I think he will bounce back - an expensive lesson, but now that he has a contract, he won't experience these kinds of things again.

    As soon as I get in touch with Chuck, the contract template will be offered here at LawnSite.com - which goes perfect with the Proposal Template already offered here.
     
  7. heygrassman

    heygrassman LawnSite Senior Member
    Posts: 509

    Moral of the story... contract.. contract.. contract...

    Sean, thanks for the case study. Hope this saves someones rear sometime..

    jf
     
  8. m&m

    m&m LawnSite Member
    Posts: 169

    sean, what did you mean by buying the contract at ur site? do ya have a contractual agreement already made up and all that is needed is to fill in blanks?
     
  9. Fantasy Lawns

    Fantasy Lawns LawnSite Bronze Member
    Posts: 1,913

    How would a contract prevented the loss of account ?? ... at best he would have recieved 30 days notice .... or is there a contract which guarantees income over the length of contract term .... don't get me wrong contracts are a MUST ....but would not secure the account ....you can have the best written paper on the net ....n all they have to say is the work was not up to aggreement

    We lost a good size job this March due to a new management company ..... the job was 15% of yearly gross for 2001 ... part of the business .... we had to lay off 2 guys ....cut back a truck/trailer ....business goes on ....we are almost back up to the lost gross only 6 months later
     
  10. KirbysLawn

    KirbysLawn Millenium Member
    Posts: 3,486

    I agree with Steve. The lawn guy is the last to get paid in these instances.

    I think the morale to the story is don't put too many eggs in one basket.
     

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