Crews or no crews...

Discussion in 'Business Operations' started by jonhumphries, Jul 22, 2008.

  1. jonhumphries

    jonhumphries LawnSite Member
    Posts: 11

    I've been in business for a year. At this point it's me and one employee. Right now I've got about 30 regular yards...about half on annual contract. Doing an extra 25% per month in additional landscaping and irrigation work. The season is beginning to slow down at this point, but I'm looking into next year and seriously considering pushing up to 50 to 60 yards and adding a crew of two or three.

    At this point I can go two ways...keep it small, or grow into a business model that I'm not really familiar with. Managing the crew is not a concern, but I do have a lot of questions about overhead and profitability once I put a crew on the road. Any advice out there? How does this typical business model work? If I'm looking at a 50% gross profit with me mowing, what is a good projection for a crew that I'm not with every second? Open to suggestions...
     
  2. Gene $immons

    Gene $immons LawnSite Bronze Member
    Posts: 1,028

    Some random thoughts.

    Try to keep the payroll no more than 1/3 of sales. Less if possible. Have very tight routes. Don't have a crew drive out of the way for one job. Try to get as many accounts on the same street as possible. Do the jobs for a few bucks less, it will be cheaper than driving 10 minutes to each yard. I can't stress this enough, have many accounts right next door to each other, you will make more money.

    Expect problems with the crew, Guy 1 calls in sick, guy 2 does not like guy 3 etc. Be ready to have guys quit with no notice, be ready to quickly hire new people.

    Good luck.
     
  3. pasto_guy

    pasto_guy LawnSite Member
    from VA
    Posts: 119

    Just my 2 cents but I remember when it was just me and one guy. Man those were the days. A lot less headaches. But on the other side of the coin, if you manage your business right then your other crew will bring in more profit. But don't expect that margin to be as high as your crew because you are doing half of the work, (assuming a 2 man crew). You don't have to pay payroll tax on yourself every month. You get to that point of diminishing returns. Don't forget about workers comp and other hidden costs, shirts, equipment, windshield time, etc. Just think it out clearly before you jump the gun. A well thought out plan is much better than no plan, but then again when does anything ever go according to plan.
     
  4. lawnjocky

    lawnjocky LawnSite Member
    Posts: 184

    Here's my thought's.
    1 crew. Pro's:The profit's (by %) and quality of work will be higher. Low liability and overhead. Stronger customer loyalty and you can exit the business easer. Con's: If you get sick or hurt the business will take a hit or even be wiped out. Limited growth potential. Your life is not your own.

    Crew's. Pro's: Unlimited growth. Business should be ok without you for short periods of time. During part or most of the year you can treat it as a 8-5 job. Con's: Profit's (by %) and work quality will go down. Depending on your help, the headaches will increase 10-100 fold. Liability will go up greatly. All job's will take longer than if you did them yourself.

    You can make a living with one crew, but if you really want to be in business you will need crews.

    Advice. Don't fuel growth with long term debt. Use short term (1yr or less) and savings for expansion do to the risk involved. Only use long term debt to maintain what you have or possibly a building. If you move into crews your job must change. You will need the employees to do the actual work. You will check up on their work, deal with customer's, grow the business, fix problem's, fill in for absent employees, hire and train new people, etc...And let's not forget about the paper work. For a good, strong business, keep your growth steady and manageable.
     
  5. larryinalabama

    larryinalabama LawnSite Fanatic
    Posts: 17,326

    Heres my thoughts- Stay SOLO. I dont see why you need a helper with 30 houses. You should be able to do 50 to 60 houses solo.
     
  6. cod8825

    cod8825 LawnSite Senior Member
    Posts: 501

    I agree with Larry my thought is only and only possibly hire additional help if you can't get stuff done in a fifty hour work week period.
     
  7. coolluv

    coolluv LawnSite Gold Member
    from Atlanta
    Posts: 3,839


    Great post. It comes down to. Do you own a business or a job?(Or) Do you want to own a business or a job? If you work solo then you own a job. If you have crews then your job is to get work and manage the business. Not do the physical work. Your position in the business changes from worker to business owner.


    Dave...
     
  8. if you are doing 90 yards a week one crew should be able to handle this along with your extra work. You might have to work some saturdays but three of you total should hanle all of that.
     
  9. CALandscapes

    CALandscapes LawnSite Senior Member
    Posts: 946

    We do about 75% construction to 25% maintenance, so my experience isn't entirely with running maintenance (which tends to go much smoother than construction), but, IMO, running crews is an entire new beast apart from operating solo or constantly supervising several employees.

    The best advice I can give is: Good luck!
     
  10. TJLANDS

    TJLANDS LawnSite Bronze Member
    Posts: 1,669

    I think it is great after one year to think about running crews. Most solo guys are just scared to make the jump and throw all these reasons out not to.
    Heard some above in this thread. The truth is you can only go so far solo.
    When you get yourself off the mower and into getting more business, then you have more chance at making money.
    The key is to hire the right people. Pay them good. Give them good equipment and treat them fair. Just like any other business.
    As far as the suggestions of financing I think 1 year is just wrong. I finance my trucks for 5 years no money down and my mowers for 3 years no money down. Let the work pay for them as you grow.
    I went the "crews" route after 2 years and seeing a block in the amount of money I could make with me and two guys working. I just wanted more.
    I say go for it, and Good Luck.
     

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