commercial or residential???

Discussion in 'Lawn Mowing' started by wendicp, Aug 3, 2007.

  1. wendicp

    wendicp LawnSite Member
    Posts: 12

    What do you think? Large commercial accounts or residential? We have been in business for 4 years. We got really lucky when we first started and landed a big commercial account-we still have it. We get paid year around. Most of our jobs are city and county jobs-parks, water towers etc. They are low bid jobs though. The only nice thing about them is we know what we have coming in each month. My husband and I started out doing it ourselves with a few other guys helping us. Now we have seventeen employees!!! It is such a pain. We are sometimes working 50-60 hours a week! The other draw back is we have as much as fifteen hours drive time in a week. We had some door hangers made and are thinking we could do just as well with less headache and fuel cost if we stuck with the residentials. We could have smaller equipment, less employees if we could find alot of homes in these big neighborhoods. We could set them up on a year long contract. Need some input-Thanks
     
  2. drmiller100

    drmiller100 LawnSite Senior Member
    Posts: 562

    fuel doesn't really add up to much compared to labor.
    my big kick is efficiency. do you have 2 man crews, or one man crews? do you have 54 inch ztr's, and severely limit those accounts that require a push mower? are your employees paid partially on commisison to encourage those that want to work, and run out those that dont????
    a GREAT employee making double wages with good equpment is MUCH better then two idiots.
     
  3. DuraCutter

    DuraCutter LawnSite Senior Member
    Posts: 806

    I've heard some guys on here talk about doing less work for more profit. Sometimes turning over dollars with a lot of employees could be counter productive. I can't speak for your situation as I know very little about you, but it would be worthwhile for you to see if you can start doing some commercial with better profit ratios??

    Residential as a whole is a lot more shall we say "babysitting the whiners" compared to commercial where you're pretty well left alone. Some of these residentials can be a handfull with their expectations!! I personally don't do any, it's all condos...maybe that's an idea, condos. They pay well in many instances. I run 6 guys and we mow 3 days a week. I'll have 3 guys on average do the mowing and it brings in over 12 k a month.

    Think twice before doing residential. It's a zoo!!

    :)
     
  4. topsites

    topsites LawnSite Fanatic
    Posts: 21,653

    I tell you there's that yin and yang nonsense again, you got one set of problems making you think the grass is greener on the other side, but I tell you there is always problems on the other side as well, I'm strictly residential but I'm also a solo owner-operator.

    I myself am one of those guys doing less work for more profit, but it's not without headaches either. For one I have a LOT less customers and a TON of slack to get rid of, sitting at home in the a/c watching TV sounds great in principle thou... Advertising costs a lot more and there's more taxes involved (as in, raw amount due). On the bright side I hardly break a sweat anymore, get away with like 50 bucks in 40 minutes and stuff like that ($30 in 15...) but it took years of practice as well, I got things down to a system, what used to take me an hour now hardly takes 20 minutes, keep in mind there's not much to grass-cutting in the middle of summer and it takes almost twice as long in spring and fall, per yard.

    Moneywise, I charge per cut but it doesn't vary, I make out sometimes, other times I about get to cursing and sometimes I do.
    Even then there's fuel, residential means a lot more stops, a lot less time per stop = more windshield time, I'm going through 4-500 / month in fuel and it may not seem like a lot but that's during slow times and it's 20% more than when I was doing things the other way around. It can't be helped, my truck gets 10mpg and holds 30 gallons, if I get a week out of it that's $100 right there.

    So it's 6 of these or a half dozen of the other, whichever you like, but just keep in mind whichever you decide, there's always the can of worms that goes with it.

    Good luck, either way.
     
  5. cpel2004

    cpel2004 LawnSite Bronze Member
    Posts: 1,416

    So what i hear is your not making the money that you should be making or your just working to pay your employees. Res or Comm, both are they same if you bid them right you can make money either way. It really depends on you. Some LCO's like to deal with homeowners some dont. I prefer servicing homeowners, if you build a strong relationship with them then you will have a dependable profit center.

    Im curious to know what is your actual gross to net % with 17 employees?
     
  6. TNT LawnCare Inc.

    TNT LawnCare Inc. LawnSite Bronze Member
    Posts: 1,157

    17 Employee's is this all mowing ?? Sounds like you may have some guys in here not pulling there weight :weightlifter: ?? How many Accounts they doing in a week or Day. Are you driving them around. Little more info.:waving:
     
  7. thomsoutdoor

    thomsoutdoor LawnSite Platinum Member
    Posts: 4,443

    How true. Great employees are hard to find and if you and up with a few idiots they can break you.
     
  8. westwind

    westwind LawnSite Senior Member
    Posts: 444

    Sounds like it is time to tear apart your business. I know we don't have all the info, but it seems to me that you have too much drive time, too many employees and are not making enough profit. If you are that large of a business, making what you should be making, you would'nt be on this site asking for advice. JMO
     
  9. grassgirl4

    grassgirl4 LawnSite Member
    Posts: 125

    On the topic of bidding right: I agree, if you bid a job correctly, you can make out just fine. However, it's a catch-22...at least so far. I've called around doing price checking with some of the known larger outfits in my area, as well as some smaller LCOs, and I've even pow-wowed with a fellow LCO who has been in the business for around 25 years to see if my prices were in line or over the top. What I've found is that my per-man-hour rate is on track with everyone else, yet the jobs I've bid this year (particularly the larger properties and full-service accounts) have not panned out. What I don't get is how these other companies are getting their price, yet I am not!!

    I am fair and reasonable and am not out there to try to take people to the cleaners. I do want to make a profit (and a living), though!! I estimate how long the job will take me, travel time and cost to the dump site, and disposal of the refuse...what gives??

    Here's the real irony. Everyone always talks about trades like plumbing and electrical companies being skilled fields requiring training and coursework. That's true. However, yesterday my dad had to call a plumber to come clean out a clogged pipe that was literally backing up everything. They sent someone out with a motorized auger to bust up the clog. Not sure how long they were actually at the house, but they charged for (1) man-hour. The cost: $140!!!! What did the 'skilled' tradesman do? He set up the auger and pushed 'go'...WOW, hard work!! Same thing happened the day before at my parents' rental house. Cost: $88 for one man-hour (it was cheaper because they didn't have to use as big of an auger :dizzy: ). Again, set up the machine and push start!! I told my parents I'd like photocopies of those bills for when I encounter prospective clients who don't understand my man-hour rate...also said I didn't want to hear anyone complaining about my $40/man-hour rate when I'm out there busting tail, getting drenched in sweat and covered in a lovely grass/dirt/dust cocktail in 90+ temps with 90%+ humidity!!

    I know people need to be educated about lawn care/landscaping (nature of the beast), but come on, don't people THINK, COMPARE, and MAKE CONNECTIONS?! Don't they consider all that goes into doing the job...which is the very reason they called someone else to do it for them??

    YIKES!!
     
  10. fiveoboy01

    fiveoboy01 LawnSite Silver Member
    Posts: 2,988

    Methinks that if you have 17 employees after only 4 years(IF that is the number you really need), you simply grew too fast.

    Slow controlled growth is good but that seems excessive.

    Like someone else said, time to tear things apart. Dump the employees who dont pull their weight, tighten your route, evaluate your costs and figure out how to reduce them, etc.
     

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