Become The Greatest Lawn Care & Landscaping Business Owner of All Time

Discussion in 'Business Operations' started by Sean Adams, Jan 17, 2014.

  1. Sean Adams

    Sean Adams LawnSite Gold Member
    Posts: 3,597

    This article is for everyone in this business – the guy with the 30 year old big business, the young guy getting started this spring and everyone in between.

    I was born in the 1970′s. I played sports growing up and I have been a sports fan all my life. As I have grown older I look at sports a lot differently now than I did when I was younger. Now I look at sports, athletes and the team as a whole from a business point of view. I know that may seem odd to some, but it makes perfect sense to me.

    I am not naive. I know you can’t teach height. Some people even say you can’t teach speed. But everything else… that is up to the athlete these days.

    So why do some teams win all the time and others lose all the time? Why are some teams mediocre year after year? Money, right? Again, I know how it works, so yes, there is no doubt that money is a significant advantage – you can build the best complex, afford the best equipment, pay for the best coaches and especially, buy the best athletes.
     
  2. olajoe808

    olajoe808 LawnSite Member
    from Zone 5b
    Posts: 221

    One of the most successful that I've worked for was someone that people revered more than hated, sharpest, got lots of work, paid well, was considerate, would put the smack down on anyone just with eye contact, could figure out the most complex situations precisely where others would need special calculators, could work the trenches then walk the tight rope, would party you under the table. What this operation had among the others that ranked up there is they had support. Wives that put up with things, brothers that made up the operation, luck, timing, etc.... back when families were bigger and there was no access to the super information highway., Now even though things have changed, imo successful operations still share similar ingredients but the handling of business matters today is more delicate. Where as if you were good you didn't need a license or insurance to build a custom multi-million dollar home that could withstand hurricane force winds. There are as many people who care about credentials as those who don't. Looking at craigs list this morning I'm reminded of this. Local operators continuing to pimp their services thinking that hard work pays. I never found it to be that easy otherwise I would be a millionaire by now :)
     
  3. PK Mows

    PK Mows LawnSite Member
    Posts: 88

    Leadership. Some Coaches will win with scrubs, some lose with All-Stars.

    Crew Chiefs. If you don't have good Crew Chiefs, then forget it. Your Crew Chief is the most important person in your organization. This person has your business in his hands. As an Owner or Manager, you need to work in support of your Crew Chief, not the other way around.
     
  4. snomaha

    snomaha LawnSite Senior Member
    from midwest
    Posts: 871

    Sticking with the sports theme.

    I have a friend and fellow business owner (Crabtree & Associates) that says your business and the NFL have alot in common.

    The NFL operates under a salary cap and Bill Bilichick is arguably the best at getting the most productivity on wages spent on players.

    The Patriots pride themselves on their ability of knowing when to hire veteran talent and when to develop new talent.

    I think many of us would love to have veteran rock stars walk in the door every spring - that's not happening in my neck of the woods. We have taken the approach of developing/teaching candidates with great attitudes and general aptitudes.

    My friend would argue that we as business owners also have a salary cap. For this example lets say you have a 1 million dollar business and you want to make a pretax profit of 10%($100,000). $1,000,000 - $100,000 = $900,000 to use for non salary costs and salary/wage costs.

    Your non salary costs would include any COGS and are pretty easy to come up with if you have 3 years of fairly clean financials. As a percentage I bet your non salary costs (overhead) stays pretty constant Lets say for arguments sake that your number is 40% ($400,000).

    Revenue = $1,000,000
    less nonsalary costs -$400,000
    $600,000
    less pretax profit -$100,000
    Salary cap = $500,000

    I have $500,000 I can spend on all wages and salaries - direct, office/admin and your own fair market wage.

    Thinking in terms of having a salary cap has been a great tool over the years -helps avoid the wage/salary creep. We were over our cap a few years back (post 2008) and froze wages along with cutting some staff. We have now filtered the responsibility down to the division managers that control their own direct labor.
     
  5. larryinalabama

    larryinalabama LawnSite Fanatic
    Posts: 16,450

    I thought all you had to do is Learn Spanish?
     
  6. cpllawncare

    cpllawncare LawnSite Silver Member
    Posts: 2,659

    I think 40% for salaries is awful high,I don't think we have the margins for that now, I recently was studying this and came up with more like 25% of gross for salaries? before anybody jumps on me I am not paying nowhere near min wage and I'm way over 25% and it's really hurting my bottom line, I'm being told I'm overstaffed for my gross.
     
  7. snomaha

    snomaha LawnSite Senior Member
    from midwest
    Posts: 871

    That's why i said, "for this example" - the numbers used were for ease of math - take the formula and plug in your own numbers.
     
  8. cpllawncare

    cpllawncare LawnSite Silver Member
    Posts: 2,659

    Yea, I knew that, but in my mind I was trying to see if I was at a million gross would those numbers work? I don't think so, a million gross is my five year plan, it's interesting to look at the future sometimes.
     
  9. TPendagast

    TPendagast LawnSite Fanatic
    Male
    Posts: 7,563

    sorry this makes me chuckle.

    This right here.

    It's more expensive that ever to live.

    People always want to know "where have all the good workers gone? why can't I find any good labor?"

    and in the same positing sight we have "Pay well? oh hell no!"

    :laugh::laugh::laugh:

    when you make claims of "we pay higher than our competition, why can't we get good laborers?"
    all you are doing is gathering the best of the worst.

    IF they all pay $9/hr and you pay $12.20 whoopee too!

    I made $12/hr in 1991 doing this for work. McDonalds Paid me $7.85.

    Now you guys want to pay $12/hr and as a shift manager, with reasonable attention to detail, shows up to work on time, and rarely calls in? That's $12/hr or more. with benefits like free uniforms, travel to training seminars and reasonable upward mobility AND paid vacation, and an easy ladder to climb.

    All you guys want is someone to show up, reasonable attention to detail, calls in rarely…huh….you are competing with mcdonalds ….. except mcdonalds has better side bennies and gives you work year round and doesn't consume your entire life all summer long……..


    Ive said this before, and I'll say it again, the only problem with our industry is over saturation, too many contractors 'thinking' they are good at what they are doing, simply because they have bought nice equipment.
    But they don't know what they are doing, they should be high end employees, because they don't know diddly about running a business.

    40% of businesses shouldn't BE in business, they should be working for the other 60%
    And of those 60% half of them need to learn how to treat employees and we wouldn't have near the issues in the industry we do.
    Oh and with a 40% reduction in sales….the machines we are all trying to buy, would return to the price they should be instead of the overinflated prices they are fetching now.
     
  10. cpllawncare

    cpllawncare LawnSite Silver Member
    Posts: 2,659

    T,

    I get exactly what your saying, it's no secret the whole country is in a serious wage stagnation flux, and we're no different, I've talked to folks that are working at companies I worked at 20 years ago doing the same thing I was and are making the same amount of money I was, that was 20 freakin years ago and wages haven't budged. If everybody were paid what they thought they should be paid companies would go broke. We're talking about huge global companies here not a wrinky dink million dollar landscape company.
     

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