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Downsizing to make more $$ -- ??

Discussion in 'Business Operations' started by Gene $immons, Aug 8, 2007.

  1. Gene $immons

    Gene $immons LawnSite Bronze Member
    Posts: 1,028

    More employees =

    Higher payroll expense
    Higher payroll taxes
    Higher work comp. premiums

    It has been such a revolving door this year with worthless employees, who think they should be making top dollar.

    Our list of work is huge, and our quality of service has taken a big hit this year for sure. THE REASON? Because I cannot always be there anymore. I have ONE very good employee, the rest constantly complain about the heat, need to get off early, have drug problems/personal problems.

    I am ashamed of the Caucasion race.


    Down size this sucker to about 80 quality accounts and fire stupid employees.
    To get this company down to just me and one, maybe two good employees.

    I could use the exercise.

    Currently, we are always behind schedule, and I am always worried about getting these lawns done within a one week period.

    Side jobs have had no chance this year, we are too busy mowing.

    I believe I can make more money by eliminating several accounts which are either out of the "tight route" and eliminating slow pay PITA accounts.

    I would like to know if anyone has faced a similar situation, and downsized, and been happier and made more money by doing it.

    I guess what I am thinking about is "re-grouping" and focusing on quality over quantity.

    On the other hand, I don't exactly want to be out in the field the rest of my life. I really enjoy the work - -but these employee problems, and especially the high expenses (taxes) involved with employees makes my head spin.
  2. MLI

    MLI LawnSite Senior Member
    from Ma
    Posts: 464

    How old are you? What's your health? Do you have family? etc. I was in the same boat last yr. I remeber the days when it was me and 1 other good worker. I seemed to make good coin, but worked hard for it. I wasnt married, and had no children...the income(net profit )was predictable each yr. I was in my early 30's. Then I got married...income was close to same the following yr. Then I had my first child(She had a genetic syndrone called Angelman's)that was 24/7 care for her, so my wife and I had to change our scedules to make sure she got the best now and in the future. My net that I was used to dipped, still doing well though. Then my second child came 3 yrs ago(healthy) very active 3 yr old that needs lots of attention. You guessed it....money took a BIG dip! It came to the point that I was considering regrouping like yourself to make more $$$. My wife was stay at home through the last 4 yrs, only woking part time, but going to nursing school. My conclusion was that I had to lower my debt, and cut back on all employees cept maybe 1......or roll the dice and go big. I knew if I went big I would sacrifice a couple of yrs income to throw back into the biz. I also realized I'm now 40 and no spring chicken.
    I choose to go BIG, and currently have my first yr down(break even...doubled my accounts to over 200) I have 7 people working for me...all great guys, and things seem to be following my business plan to double next yr. I hired a manager(cost $53k) to run things etc and have backed out physically. Having a manager in the field kills profits when your a business my size currently, but in the big picture , I'll make some good $$$ next yr and not have to be in the field.
    Choosing to go big afforded me more time with my family which is priceless, it also was Ins. for me if I ever got hurt, and I did. I developed arthritious in my knee probably from 25 yrs of landscaping, and cant work like I use too. If I had downsized to the point it was just me and another guy I don't think I'd make it. The big ass-kicker though was this whole summer! My little girl with the the Angelman's became very i'll( I posted in the off topic under religion....do a search under Molly)and was in Childrens Hospital Boston. She was in there for about a month, and my wife stayed in there the whole time. I had to stay home with the 3 yr old and try to give her a normal lifestyle while we were dealing with my other daughter. I put all my guys on autopilot and gave them weeks of works to do figuring I'd be busy in the days coming. I was in contact via cell phone relaying messages to manager, adding work that was still coming in etc. All was flowing smoothly on the work front, but not on the home front. I loss Molly July 21st and everything went into a tailspin. All the things Ive had to go through in the last 2 months (things that ALL of us will deal with one time or another)would have sunk my solo ship!! Building a business to support your family will be priceless in the future! I was able to be there in Molly's last days to enjoy her smiles, to hold her, to be there with my wife. All these things are priceless and can not be replaced! Everyone should step-back and look at the big picture when it comes to building a business. Plan your life first ie: marriage?....children?.....any illness?.......future illness?...retirement age?....traveling? ...school? ......accidents? Once you have a general idea from what you want out of life, and how much$$$ you think you'll need ....then build around that concept. Let me sum this up for you young guys......your not bullet proof and things WILL happen to you out of your control. As long as you have a contingency plan you'll do fine. For the older guys......your bodies will not be able to keep up with the constant physical grind of everyday landscaping. The more people you have working for you in a systematical way the better!
  3. Brianslawn

    Brianslawn LawnSite Silver Member
    Posts: 2,004

    raise prices a bit. youll lose a few but make enough more on the rest to compensate. plus have less work... which means more time for those spanish classes.
  4. mdlwn1

    mdlwn1 LawnSite Silver Member
    Posts: 2,443

    I agree..carefully raise prices to control growth...."IF" your sure thats what you want to do.
  5. Gene $immons

    Gene $immons LawnSite Bronze Member
    Posts: 1,028

    Thanks for the input.

    You know, the sun comes up every morning, and today was a bright and shiney day. I had two new guys arrive today, who were absolutly outstanding. You guessed it - MEXICANS - one even has a valid drivers license.

    I think I want to go big after careful thought. I can't do this forever, and I need to surround myself with better employees. I definately need to raise the prices on some of the accounts as well.

    Good day today, they even took care of 4 of tomorrows properties, which were not on the schedule.

    Now i need to concentrate on finishing out this year strong, and start planning on the third full time mow crew for next season.
  6. topsites

    topsites LawnSite Fanatic
    Posts: 21,653

    I went from 55 average accounts to 45 above average ones last year and grossed 3 grand more with 45 vs 55, keep in mind I am solo but 34k to 37k is no joke of an increase, that to me was a record year. A LOT less headaches, I made more money with less work, more actually got done because I found myself spending almost no time fiddle farting with the knick knack mickey mouse stuff. I spent more time on my good customers lawns and raised my prices and they still got more for their money than before because I had that much time on my hands.

    Rather than working from the time I fall out of bed at 0-dark30 run-run-run until omg it's 20-dark30, trying to get 10 lawns in a day and then having to deal with maintenance and never getting a minute of rest, you familiar with that?
    Yeah, I had more like 6-8 lawns / day, home and maintenance done long before dark many times, less in the way of stuff breaking too.

    I was reading there exist three types of people, you can fit this as you wish:
    The average, which are a dime a dozen, consist of 90% of all people.
    The good consists of the next 9% or so, and good is twice as good as average.
    The elite consists of the final percent, and elite is 5x better than good, and 10x the average.

    You bet you'll make more money, but may I advise to increase your advertising?
    I failed to do so and I'm hurting because of it, but aim for good > elite, let the average employee service the average customers, elsewhere. Forget it, why play with these people, all the whining and crying me a river, I done got so angry so many times...
    I am way better off today, few a customer tests me and when it happens it's far in between, life couldn't be better.

    There are down sides to it, it is a trade, it's not without problems...
    I find dropping customers comes back around, I keep getting whiplash from stuff I suspect has to do with this (as in, someone just had to get even), one can always wish folks understood business is business, but soon this odd behaviour should stop on its own.
    Also I find it's tougher, there's less room for error and you need your stuff all in one sock, neatly tied up.
    So long you got it together it's no problem, but I did notice things are tighter, high quality customers drop me fast, too.
    Guess what goes around comes around.
    But if I had to do this one over again, I would pick the same route time and time again, this upgrade to me is no mistake.
  7. lifetree

    lifetree LawnSite Fanatic
    Posts: 5,370

    Listen to the advice that MLI gave ... his sounds like the voice of experience !!
  8. jcthorne

    jcthorne LawnSite Member
    Posts: 208

    Very good post MLI.

    If I've noticed one thing on here that is lacking from most........ it's VISION. People do not look at their future and only live for today. I also chose to go big, but I made that decision from day 1. My third year was the year everything finally fell into place and it has been a blessing.

    A sound business plan and setting goals is so important when building a BUSINESS. In my opinion, a solo operator is someone who wants a job and not a career.
  9. Vikings

    Vikings LawnSite Bronze Member
    from canada
    Posts: 1,667

    Have you ever read E-Myth Revisited? lots of good Ideas in there for training staff.
  10. paponte

    paponte LawnSite Silver Member
    Posts: 2,366

    Great post guys, and great input. I'm not sure if it's just this season, but I have been pondering the same things for a couple of weeks now. Seems I have put alot of sweat and tears into this business, and am way down on construction this year I believe due to the economy. Seems like people are just not spending on the larger projects this season and is starting to take a toll on me as a company. Like many have stated, you have to look at the whole picture sometimes, and know that business can be a roller coaster. In the high times things are great and money is literally pouring in. These are the times that we should be preparing for the drops and be ready to hold on. Business is a great learning experience, and should be taken for what it's worth. Learn from mistakes and hire qualified help. It all pans out in the long run.

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