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Discussion in 'Business Operations' started by drmiller100, Jun 18, 2005.

  1. drmiller100

    drmiller100 LawnSite Senior Member
    Posts: 562

    Under the end of the "I did it thread" I posted some of my thoughts about crews and efficiencies.
    I am starting this new thread. My basic premise is that equipment is a LOT cheaper and easier to get then good labor, and pretty much anything that saves time will pay off.
    John Deere and others are giving equipment to anyone that passes the mirror test. I truly believe anyone cutting more then 3 lawns a week with a 21 inch mower is a lot tougher then me, more dedicated, and not working very smart at all.
    Rather then raise prices, I believe that LCO's should become more efficient. If you aren't making money at 25 a lawn, figure out how to adjust your practices so you can, or buy equipment.
    I've got a spreadsheet I'd like to post, but Lawnsite won't let me post .xls files. Anyone have any suggestions?
    Doug Miller
  2. J Hisch

    J Hisch LawnSite Senior Member
    Posts: 952

    I totally disagree, you can be profitable with any equipment you have. For example say one crew cuts 30 lawns a week all 21 push mow work, those crews usually are paid less and equipment cost are extremely lower. So they could be just as profitable as the larger commercial crews. Now put a ztr on the push mow route for the same money and you will lose some of your profit margin. so then ask your self who is making more now? It is not all finding the fast way to do work, while production is a very important part of the scheme, it can also be the part that breaks the company. In order to have the highly productive equipment you better be grossing enough to justify it. By reducing your time it may not make your company more profitable. Yes you say then I can take on more work, ture but have the work first. I have 1 crew 2 man 80 accounts 2 ztrs 52" 61" and all the hand tools, ther route was built out of the yellow pages. Then I have the route I work, 1 man 48" rider, 36" walk, 21 push mower. 45 accoutns. tight route built by referral marketing. I am more profitable than my 2 man crew. meaning becasue my route is tighter 1-3 minutes between stops 1 clear more on the hr than they do. so the 1 man route is more profitable, even though the sales are not as high as the 2 man crew, they do more dollar but my margins are higher.

    TJLANDS LawnSite Bronze Member
    Posts: 1,669

    J Hisch, I think you are wrong.
    You can buy a good ztr 52-60"
    at $10 a day easily. (23 days a month @ 10=$230.
    230x 36= 8280, puts you in the low range, lesco etc.
    $12 a day puts you in the high range. Walker dixie exmark.
    If you can save 1/2 hour a day with larger mowers with a two man crew,
    it pays for itself. Any more time savings is more profit. With the terms and warranties available today you would be wrong not to look into this.
    I am a believer in replacing manpower with machine power.
  4. drmiller100

    drmiller100 LawnSite Senior Member
    Posts: 562

    i totally agree a one man crew is more efficient then a 2 man crew.

    i disagree someone is better off to build their business with 21 inchers. Do you have a vehicle to drive around between jobs? Why? you could use a bicycle until you had saved enough money to buy the truck.

    If you want to make 15 bucks an hour, and it will take 2 hours to mow a lawn, you need to charge 30 bucks for the lawn. but if the value to teh owner is only 25 bucks, you can't do it. OTOH, if I show up with a ztr and can do it in 12 minutes, then I can make a lot of money at 20 bucks to mow it, and the homeowner is HAPPY.

    I respect very much people mowing yards with 21 inchers professionally. that takes dedication, hard work, and sweat. Me, I'm in this to make money, and money is my reward. Not sweat for sweat's sake.
  5. drmiller100

    drmiller100 LawnSite Senior Member
    Posts: 562

    i thought of anohter way to think of it. In your example one crew cuts 30 lawns a week. just for fun, lets say average lawn is 20 bucks.
    Lets say labor is 5 an hour (dream on). crew is two people, week is 40 hours, total of 400 dollars in labor, then add workers comp, ss taxes, etc, and you are most of the way to 500.

    so you dealt with two whiney employees for 100 bucks profit that week.

    Plan B. buy a ztr and hire a guy part time. Pretty lame that a guy couldn't mow 30 lawns in 2 days by himself with a ztr. Payment is 60 a week on mower.
    say you have to pay the lone guy 20 an hour, cuz it is SOOOOOOOO much tougher to drive a ztr around then push a 21 incher.
    two days, 20 an hour is 160. round to 200. add payment of 60, for total of 260.

    owner deals with one whiney employee 2 days a week, and increases profits from 100 bucks a week to 340 dollars.
  6. J Hisch

    J Hisch LawnSite Senior Member
    Posts: 952

    I am going by numbers in the bank not on the hrs in a day saved. I am not saying that Ztr's aren't faster, we all know they are what I am saying is that it may hurt the business by taking the debt on the mower instead of staying the same, yes you will finish faster, but now you have to think about other issues like more money being put back for capital reinvestment etc. I would point to just mow it, and I would say he is profitable, why? lower overhead, less training hours and less payroll. less of a headache on losing key people. I would also say we can make it all look good on paper however the man hrs versus money in the bank will tell the truth. Now in some cases a ztr is nessesary. But not in all cases. This is a great constructive post.

    HOOLIE LawnSite Gold Member
    Posts: 3,981

    Don't forget to factor in, you have to pay for the ZTR all winter long, when it's not cutting any grass.
  8. drmiller100

    drmiller100 LawnSite Senior Member
    Posts: 562

    cclawns posted my spreadsheet to his website. Thank you!!!!


    Just plug in the numbers at the top. Does this make sense? In particular, look at sheet 2. On sheet two, I am assuming one guy with a ZTR can keep up with 2 guys with 21 inchers.
    Feel free to put your own labor COSTS in. this isn't what they make an hour, but rather what they really cost you, which is somewhere north of 120 percent of the hourly rate. If you more then 16 weeks a year, then crank that number up.
    As the other guy pointed out, that 10k mower sitting in your garage all winter burns some bucks up. That is why I looked at annual figures. The more weeks you mow, the easier it gets to justify that big mower. 10 percent is way high for interest rates, and for me 12 is way low for labor costs. But it illustrates something.
    Basically what some of the old timers say about working alone with big equipment pencils out in a big way.
  9. Eho

    Eho LawnSite Member
    Posts: 205

    I understand your point drmiller about investing in larger equipment rather than labor. I dont disagree with your theory, but let me point out why some people are happy to use 21s and employees. Number 1. reason.... not all lawns can be mowed with large ztrs. Many lawns that I mow are around 5,000 square ft of grass with small gates and landscaping. A 21 is pretty much all you CAN use on them. Also, even though profit margins are smaller, many people want to hire others to do the grunt work while they run the biz in an office. Another reason is cost of 21 versus ztr. Not only do they cost more...more expensive to maintain, you HAVE to have a trailer where one could run 21s out of a truck. Not saying your idea is bad b/c it can work, but not in all situations. Believe me, running a setup of nothing but 21s can work..do a search for justmowit. I really did consider buying a larger mower if i get more work instead of an employee but I realized that due to small lawns and small gates it wouldnt work. Now if all my customers had wide gates, I might consider it. Interesting thread I think.
  10. drmiller100

    drmiller100 LawnSite Senior Member
    Posts: 562

    drop the customers that have gates to where you can't get back there.

    i have three employees currently. we only have 40 or so lawns, which my foreman does in 2 days. i don't like cutting lawns, but i did an analysis on how much money I'm making on teh lawns, and was SHOCKED. In those two days, we are making GOOD money.

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