Employees bidding

Discussion in 'Lawn Mowing' started by Phaneuf, Jan 25, 2006.

  1. Phaneuf

    Phaneuf LawnSite Member
    Posts: 30

    I'm new to the site and first want to express my appreciation for the plethera of information and hard work put into this community forum. Great Job Everyone. My question is:

    To all you LCO owners out there, Do any of you send out your employees representing the company to put in bids on commerical properties? If so, is it a dedicated employee for sales and/or marketing or one of your lawn guys? Also, how would you compensate that person without busting your bank? Commision? Salary? Hourly? It seems that the return rate for these bids is between 20-40% and the time and effort involved in making these connections is emmense. I myself am an employee who is on over half the 120+ lawn accounts we have and have in the past year personaly picked up a dozen or so new residential clients for the business without compensation. Thats almost a 10% growth. I know inherently by simply being out there new costumers will come to us but to me, it seems a little above and beyond the resposibility of an average employee to put in hundreds of thousands of dollars in bids only to mow them for $10hr. Any light shed on this subject would be much appreciated!!
     
  2. mkjsunscapes

    mkjsunscapes LawnSite Member
    Posts: 20

    Why are you working for someone else? Why not go solo?
     
  3. Phaneuf

    Phaneuf LawnSite Member
    Posts: 30

    Yeah, that's a very good question....

    I hadn''t been in the lawncare industry for about 6 years and last season I jumped back into it with a company that had a decent outfit and plenty of potential for growth. A buddy of mine and I both joined the company and indeed, over the season, went from 70 or so accounts to the now 120 or so including a couple of large complexes and also added a couple more employees. Plus, the quality of work and the relationship with the costumers had been greatly improved.
    In my area there are a couple of LCO's that have over a dozen crews out and are able to underbid almost every solo operation, so the need for other smaller LCO's to step up and "GO BIG" is great. I was hoping that I would be able to help the company grow to over a million dollar operation without the entire headache of the business on my shoulders.
    It seems we're in a transitional phase right now and I'm trying to make the transition as smooth as possible, remaining profitable for the business yet still be compensated for the added time and responibilities.
    Besides, If I went solo I may find my LCO in the same position 5 years or so down the road needing to make that transition from a solo operation to a corporate empire.
     
  4. Remsen1

    Remsen1 LawnSite Bronze Member
    Posts: 1,020

    I would say that you should definately be compensated differently than $10 per hour. $10 per hour is not the kind of pay that an asset such as yourself should be compensated. $10 per hour is the kind of pay that I'd expect to pay somebody that I tell "go dig a hole." and they do it, or "go trim them weeds." and they do it. If I were the owner of the company that you work for, I would devise some type of bonus system which would encourage you to keep selling profitable accounts and, just as importantly to keep working for me. Is it possible that the owner is determining the amount of profit that you helped build, and a bonus is in the works? Is it possible that the accounts you sold are not profitable or only at a very small margin?
     
  5. olderthandirt

    olderthandirt LawnSite Platinum Member
    from here
    Posts: 4,900

    10% of any new jobs you land for the company paid at the end of the yr. 1 time bonus, and that % would be if they signed early in the season the later they sign the less bonus you get
     
  6. Duck Dodger

    Duck Dodger LawnSite Senior Member
    Posts: 347

    I was in your situation a few years ago. I worked for a money hungry jackass that knew how to work people to the bone hold your job over your head constantly and never get his hands dirty. I hope you are not in the same type of situation. I would ask whoever is in charge for some type of bonus. If you are working for good people they will see your value if you get shut down I would start thinking of going on your own. The first year can really stink but once yet get a few customers going they start rolling in. Whatever you do good luck.
     
  7. Phaneuf

    Phaneuf LawnSite Member
    Posts: 30

    If a bonus was in the works for last season I would've gotten it come christmas, along with THAT lil bonus....and I mean "LIL". And its definetely not possible that the accounts I picked up aren't profitable because I always over-bid. I come up with an estimate and add on 10$ for sh*ts and giggles and go fishin. I do that simply to insure that I can provide a quality service every time and not feel like we're barely turning a profit so we better just hurry up and mow and go!
    A 10% bonus for all accounts landed sounds nice but Nov./Dec. seems a long wait for a couple months worth of work put in at the begining of the year.... but then again... I have 400,000 $ in bids pending right now... suppose a miracle happens and I land them all.... thats $40,000!!!
    Anyways... we'll obviously have to work something down on paper.
    Thanx for all the input.
     
  8. TurfProSTL

    TurfProSTL LawnSite Senior Member
    Posts: 693

    Sounds like you're the type of guy I would want out there talking to prospective clients. Now if I'm your boss, I'm going to offer you some type of commission or bonus for taking the time to sell 'me' new accounts.....

    10% of the annual billing would probably be too much, but I would think 2-5% would be do-able in most companies.
     
  9. olderthandirt

    olderthandirt LawnSite Platinum Member
    from here
    Posts: 4,900

    But if those accounts cancel in the middle of the yr. then it would not be 10%.
    10% for only the accounts that sign and stay with the company for the whole yr. If you wanted a % after each one you signed that would not be unreasonable request but it would only be 2-3% since no one would know how long they would stay.
     
  10. Phaneuf

    Phaneuf LawnSite Member
    Posts: 30

    well guys, I've learned a lot in the past couple of months and concluded that it simply isn't profitable for myself to spend all this time putting in bids on behalf of my boss...

    Here's the scenario... His idea for compensation was sort of a commision based pay. If I signed a new client for the whole season at $100 a cut I would get paid $100. If I signed them for $150 a cut then I would get $150..etc..etc... Pocketing one cuts worth of revenue on an average of 26 cuts would work out to roughly a little under 4%. Now that would work out great for the extra residentials that I would pick up throughout the year, which was actually promised last season yet never came to fruition, but beyond that it gets a little tricky...
    I put it to him like this....
    Q: How many bids do you have out? (commercial)
    A: Over 150
    Q: How long did it take you to get that many bids out there?
    A: Since Dec. About three months.
    Q: And how many are goin to sign?
    A: Three look promising. (about a 2% return)
    Q: How much are each of those cuts?
    A: About $100 each.
    Q: So if I did everything exactly the way you did, spent 3 months putting in well over a hundred bids and signed those three intrested parties, then I would get $300 paid out to me for my efforts?
    A: Yes.

    Who works for $100 a month??

    He tried convincing me that it would be worth it in the "Longrun". To me the "Longrun" ends with that $300. After that I have no connection to the revenue other than my hourly wage. Indeed, it would be worth it in the "longrun" for HIM as the owner to seek out new accounts because of the profit margain Every Week and Years to come if they resign.
    It was hard then for him to argue that it would all be worth it for me to work all winter, saturating the market with our name and faces, all for a couple hundred bucks at the end.
    The funny thing is that because I candidly told him it wasn't in my best intrest to spend all that time drummin up business for him, he took it to mean that I may just quit the entire operation.
    That wasn't my intention, but simply put, he just couldn't afford me as a sales associate.
     

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