Downsize to Subs, not scrubs

Discussion in 'Lawn Mowing' started by OnMyOwn, Jul 23, 2005.

  1. OnMyOwn

    OnMyOwn LawnSite Senior Member
    Posts: 372

    Have any of you had any luck in downsizing your operation while keeping your clients? By this, I mean that I am going to down size to a solo (or two) operation, but am considering subs for my class 2 clients. I will only sub to licensed / insured / quality subs. This will create less headache. Ultimatly I could retain the clients and pull 10-15% per cut as revenue, without the associated employment costs.

    What do you think?
     
  2. Thirdpete

    Thirdpete LawnSite Member
    from Chicago
    Posts: 236

    If you can find someone to work for 10-15% less than you. If you're market rate, youre going to have to find someone willing to take the burden of those extra accounts for less than market rate.

    On top of that, you still have the headaches of dealing with the pain in the ass customers. Should they have a legitimate problem with the service, it still falls upon you. So, you're going to be looking for top quality service (which i'm sure you offer) for 10-15% less of what you charge.

    if it works, sounds like a great plan. but is it feasible?
     
  3. greywynd

    greywynd LawnSite Member
    Posts: 132

    There's maybe other options, maybe you could sell some of your accounts, of course the ones that are farther off your route, less desirable accounts etc. Another option might be to see if there's another LCO in your areea that you could 'trade' some accounts, maybe tighten up routes for both of you, so you could do more in less time.
     
  4. OnMyOwn

    OnMyOwn LawnSite Senior Member
    Posts: 372

    Both - very good ideas Guys. I'm supposing a 10-15% profit because I tend to get top $ from my clients for top-notch work. Many of the clients trust me and my decision. Again, I would have to be very careful to hire the right subs. These must be quality subs with lower overhead than I am currently experiencing. The reason I like the sub vs. selling account routine is as follows.

    Suppose I can sell a single account for 2-3 mos. of annual revenue. A $50 client will bring in about $1,400 in one year in Indiana. That breaks down to about $175 per month, so I could sell it for $350-$400 range. This is a one time profit. If I could retain the client and sub the labor, I could make between $140 (10%) and $210 (15%) in the first year. This would be a continuous revenue stream in future years, assuming the client stays with me. My risk: a sub that will not undercut me with my client.

    How likely is that?
     
  5. Scotts' Yard Care

    Scotts' Yard Care LawnSite Senior Member
    Posts: 343

    Two years ago we were offered a 5 trailer court/30 lawn per court job and we turned it down because this would have meant employees. We simply don't want the headaches and prefer to stay solo. We were talking to a plumber who had five people working for him and simply layed them off and takes on only what he can do himself. I like the suggestion of another poster to rid yourself of the less desirable accounts and tighten up your operation for yourself.
     
  6. Scotts' Yard Care

    Scotts' Yard Care LawnSite Senior Member
    Posts: 343

    We have a large landscaper who has lost at least two men who then started their own operations in direct competiton to him. Since they're efficient family businesses they're able to consistently undercut him while growing larger each year. They're both of Mexican descent and very successful.
     
  7. befnme

    befnme LawnSite Bronze Member
    Posts: 1,413

    They're both of Mexican descent and very successful.
    _________________________________________________________________WELL THERE YA GO.PROB DONT PAY INS. OR TAX EITHER
     
  8. Bulletproof

    Bulletproof LawnSite Member
    Posts: 156

    We have contracts with our workers stating they cannot start a business that will operate competitvely with ours within 10 years of working with us.

    Also, we contract out our spraying and it is the most efficient and profitable item we have going
     

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