Current Economy has contractors dropping like flies

Discussion in 'Hardscaping' started by DVS Hardscaper, Aug 17, 2008.

  1. DVS Hardscaper

    DVS Hardscaper LawnSite Fanatic
    Posts: 6,401

    Times sure have changed, compared to 3 years ago, even 8 years ago.

    The slow economy is certainly taking it's toll on the hardscape industry.

    In all seriousness, I don't even know who my local competitors are. Because many of the local hardscape contractors have folded up. They're dropping like flies.

    It's times like these where strategic money management is crucial. Now, for the record - I'm NOT perfect. But with the folding of many contractors - the writing has been on the wall for years. When it comes to financial management - many contractors are clueless. they think they have everything under control - but really they don't.

    MANAGE YOUR PAYROLL
    This means watching your workers hrs. When they hit 40 hrs, send them home. Paying overtime will kill you. The best thing to do is use a payroll service to handle your payroll taxes. trust me......I KNOW.

    MANAGE YOUR EQUIPMENT PURCHASES
    If your work load is light - then don't be buying new trucks and equipment. With the soft economy, you're only working for the banks when you finance and lease everything you have. I only finance ONE truck at a time. And I only finance 1 piece of equipment at a time (ie: skid steer, tractor, excavator). The equipment distribution industry has perfected the art of making us contractors THINK we NEED to buy that beefy looking CTL. Buy wisely.

    PAY FOR YOUR MATERIALS UPON DELIVERY
    I've been a full fledged hardsape contractor for 12 years. In the beginning, I used to put all materials on charge accounts. There is nothing worse than owing a vendor money. For the last 5 years I have been paying for ALL materials upon delivery. And I LOVE it! This business is economy driven. One thing I do NOT lay in bed worring about is how on earth will I ever pay our vendors. Its a great feeling to drive away from a freshly completed job knowing that all expenses for that job are paid for free and clear. If you have been struggeling this year, do yourself a favor and STOP putting materials on charge accounts.


    OTHER TIPS

    We typically park our work trucks at our shop / yard each night. Well, to reduce fuel costs I have been letting the guys take the trucks home. In all reality, the workers houses are usually closer to the job sites than our shop is. This is cutting out about 30 miles (both ways) of driving, saving both fuel and employee windshield time.

    Were a SMALL company. We do not rent a fancy shop. Nor do we rent a shop with road frontage. Fancy shops and shops with road frontage cost big bucks. For 12 years we rented a large dairy barn. It had cold water and electric, along with plenty of space for storing materials and dumping spoils. All that for $110.00 / month.
    The dairy barn was torn down for development, so we now rent a 40x60 pole building. It has cold water and even 220 electric. We have plenty of space for dumping spoils and plenty of space for storing materials. We pay $475 / month, and being we're 60 miles north of DC - thats a BARGIN!


    Many here are in markets that are untapped with competition. Those of you that have a steady flow of work need to be very thankfull. Or....if you have plenty of work.....are you charging enough???

    Over the next 8 months we're going to see more contractors fold up. Some of the guys running bankrupt will surprise you. Be proactive and MANAGE YOUR MONEY.




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  2. mrusk

    mrusk LawnSite Gold Member
    Posts: 3,260

    SO DVS are you up down or the same compared to last year?
     
  3. DVS Hardscaper

    DVS Hardscaper LawnSite Fanatic
    Posts: 6,401

    Our area has been hit pretty hard, so we're way down. We do have work and we are working. We do not have a backlog. There is one contractor in our area that is running full throttle. All I can figure is that he HAS to be offering super, super, super low prices.

    Most of our work is for people whom we did work for 5-8 years ago, along with referals. Thank god for referals! You can be a 2 year old company and land some referrals, but for referals to really work for you enough to where referrals will keep you rolling, it's my belief that you need at least 1 million dollars of sales under your belt, which fortunately we're past that.
     
  4. Majesticman

    Majesticman LawnSite Member
    Posts: 76

    Same in Missouri.

    It's an election year on top of the slow times which adds to the problem. In 24 years of biz the election years are always down because of the bickering politicians and the media waking everyone up and telling them how it is the end of the world.

    I have seen worse.
     
  5. tthomass

    tthomass LawnSite Gold Member
    from N. VA
    Posts: 3,496

    I'm thankful to be busy but also, in a way, invite the economic adjustment. Its getting rid of competition that shouldn't be in business in the first place. Yes, some good ones will fold too but you get my point.

    Here where I am is a different world. I'm only 25 miles south of DC but this place is a whole different economy. Yeah things may be getting slow but what has happened has been in the housing market here. There aren't layoffs and the country in a whole is NOT in a recession. A recession is defined by TWO negative quarters and we have yet to have ONE. The housing market is actually rebounding in this area with more and more sales.

    I think it is best that we concentrate on our businesses and also take a good look at where we are spending money as every little bit counts. The media is in the business of making money and is mostly full of **** to be honest...........from the economy to the war. All of those foreclosures............yeah we're only talking about 2-3% of the loans out there.

    I'm not saying things are tough in some areas, I'm saying concentrate on your business, keep it profitable and let the media carry on to the next big topic.
     
  6. DVS Hardscaper

    DVS Hardscaper LawnSite Fanatic
    Posts: 6,401

    Now I realize this is wishful thinking......but if the media would just keep their mouths shut for 3 weeks and not talk about fuel prices, foreclosures, and the economy - I bet things would improve greatly.
     
  7. tthomass

    tthomass LawnSite Gold Member
    from N. VA
    Posts: 3,496

    Wait till after the election........in our areas we should see a good climb in business. Regardless of who is in it will be a "change" and people will think more comfortably.........even if its not who they want. Now, if the democrats win there will be more of them moving to the area + the existing ones and they'll want to party, build houses, do landscapes etc........whatever the reason, I don't care........sales should be up in spring of 2009.
     
  8. mrusk

    mrusk LawnSite Gold Member
    Posts: 3,260

    My sales are up this year. You know why? Because I work harder for the sale then other companies.

    Some of the jobs I am doing this year took 8-12 months of talks before the trigger was pulled. When customers are not ready to pull the trigger I make sure they do not forget me. I call or stop by their house every month until we close the deal.
     
  9. stuvecorp

    stuvecorp LawnSite Fanatic
    Posts: 5,213

    I kinda welcome the 'big slow down' as it is thinning the herd big time. Last year was very slow for me, I am up some this year. Almost all the work has been referrals or coming back to work for past clients. I sold off my snow removal stuff and got myself out of the hole, or at least very little payment wise.
     
  10. PaperCutter

    PaperCutter LawnSite Bronze Member
    Posts: 1,938

    Can I get an amen?
     

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