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Guys getting out?

Discussion in 'Pesticide & Herbicide Application' started by rcreech, Aug 22, 2008.

  1. rcreech

    rcreech Sponsor
    Male, from OHIO
    Posts: 6,056

    Have you all heard of many guys getting out of the business?

    I talked to a great friend that sold his business (1600 accounts) two years ago and also another person that works in turf product sales.

    They both have many contacts....and they both said that they know of many guys that are thinking of getting out of the business.

    Have you heard of many doing so?

    Tell you what....I am really freaking out a little right now and not sure what to do!

    A crystal ball sure would help about now! :laugh:

    I already have the fert...but still have to raise my prices around 30% either way next year. I am really thinking that most people will drop the service when they see that big of an increase.

    Does one cash his chips in now and run...or see what happens and take the chance of riding it down and crashing? :cry:

    I could sell my business, 100 ton of fert and all my equipment and make out REALLY WELL...but if I wait "too long" it may not be worth much!

    What are you going to do? What have you heard from others?
  2. whoopassonthebluegrass

    whoopassonthebluegrass LawnSite Platinum Member
    Posts: 4,214

    LawnTamer and I discuss this frequently. While the industry may revive with an economic turnaround, I fear that it's more likely that we're looking at a permanent shift for the worse.

    We both run successful operations, but we're also both getting older every year, and don't exactly have a retirement package...

    Basically, we've come to the conclusion that we'd best start digging a new well before this one runs dry. We're building a new business together that has absolutely NOTHING to do with the green industry...

    If we're being fed the truth about why fertilizer prices are climbing, then we can't really hope for a turnaround. We will all quickly price ourselves out of usefulness to the masses. I'm sure as hell not gonna settle for weaker profit margins. They're already marginal as is.

    I'm hoping that I'll be 100% out of this industry within 3 years...
  3. LushGreenLawn

    LushGreenLawn LawnSite Silver Member
    Posts: 2,121

    2 years ago I called and got prices from TruGreen and Scotts. I just called again recently to see how much they have gone up, as I am a little worried about it myself. They both went up from around $80 to around $110.

    My feeling is that when you raise prices, you may have wuite a few people shop around, but when they realize that everyone else has done the same, they will stick with you. A few may leave because they can't afford it at all, but really, this is a service for people who have the extra money to spend, and an extra 30% is not going to make them give up their nice lawn.

    Many of my customers were do it yourselfers, and they realize that they just can't get the same result with granular stuff from HD and Lowes.
  4. whoopassonthebluegrass

    whoopassonthebluegrass LawnSite Platinum Member
    Posts: 4,214

    With all due respect, and acknowledging that your area might be different than mine, I have to strongly disagree. If only the truly well off used us, 80% of us would be out of work. I think that a SIGNIFICANT percentage of our clientèle are those in-debt-up-to-their-eyeballs, keeping-up-with-the-Joneses, mortgaged-to-the-hilt types. And if THEY drop off, so do we.
  5. JDUtah

    JDUtah LawnSite Silver Member
    from UT
    Posts: 2,636

    Yup whoop.. that's Utah for you. Spend more then you have/should...

    I heard Banna Republic was going to back out when they were building the gateway (Salt Lake City) because our demographic 'couldn't support it'. So the developer rented a helicopter anf flew the decision makers along the bench saying "we might not have the money, but we spend it, look at these houses and cars."

    Bannana republic opened, and is still there.

    Might just be Utah, but I'de say the 80% number you threw out is right on.
  6. rcreech

    rcreech Sponsor
    Male, from OHIO
    Posts: 6,056

    I think you are right on there!

    The only reason I started this post is....within the last week I have had 2 customers call and say to put their fall application on hold due to grocery bills and gas going up!

    Take high gas, incrased food prices and some job loss then add a 30% increase and we will be on the street corner begging for money so we can eat!

    I may just get the heck out! I hate it too because I love what I do everyday and have a very sound business, but don't want to watch it CRUMBLE under my feet. Right now atleast I have a saleable product!
  7. ted putnam

    ted putnam LawnSite Platinum Member
    Posts: 4,539

    Guy's, if we do want to stay in this business, we're gunna have to change the way we do things. Whether it be the products we use or how we use what we have.There are plenty of people who will have their lawns done by someone and probably always will. The competition for customers may become fierce. We are all farmers we just grow turf instead of Rice, soy beans or corn.(except for Creech) he grows that also. This affects them too. Don't kid yourself, things are not going to get so out of hand that America can't grow it's own food. If it does,we were all FUBAR anyway! There are alternatives to the traditional products and ways of doing things.The days of being "N Slingers" because it's cheap and easy is over. It's time time to start running your business like a business, keeping up with the latest ideas,products,etc... and keeping a closer eye on what's going out as well as what's coming in.
  8. ted putnam

    ted putnam LawnSite Platinum Member
    Posts: 4,539

    I realize what some of you are saying, but i also know that if you sell, you'll be selling to someone like TG. I see and know how they run things around here. They literally have guys running halfway across this state from a single branch in Little Rock. I can't tell myself I can't compete with a company that has guys running 200miles one way to do lawns when my customer base is within a 25 mile radius and I do a much better job! I don't care how great a price they get on products. I can and will compete with that. Besides, do you really think they would buy you out if they thought it was a sinking ship? I don't think so...
  9. Runner

    Runner LawnSite Fanatic
    Posts: 13,496

    I'm not sure where the 30% figure is coming in, but here, we are seeing ALOT more than a 30% needed increase to stay afloat. Our raw material cost has increased 100% (doubled) in just this last season - since spring. Now, while that doesn't affect our entire cost, it does affect alot of it. Where we were at 12 dollars a bag in the spring, we are now at 24 dollars per bag. All we are hearing is how much worse it is going to be come the first of the year. it is DEFinitely going to take a different kind of sales in the future.
  10. ted putnam

    ted putnam LawnSite Platinum Member
    Posts: 4,539

    I've already seen what you've said happen in my business this year...earlier.Overall, my customer count went down a little, but my bottom line increased. Of course, increased fert prices negated that some. A 30% increase all in one wack is a little hard to swallow. Unless things get extremely crazy, I can't see where an increase of that magnitude is necessary, at least not with my business. I have heard of some who did not increase this year or did, but just a token amount. They are suffering right now. They did not stay informed and went on "business as usual", and now they're paying for their ignorance. If anyone folds, it'll be them. Lowballing or being complacent will get you killed in this business these days.

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