Has anyone chopped their company size down and done better?

Discussion in 'Business Operations' started by dmk395, Feb 29, 2012.

  1. dmk395

    dmk395 LawnSite Senior Member
    from Ma
    Posts: 992

    I'm running 3 guys plus myself. My gross #s can be really high, but at the year end my net isn't as much as I would like it to be, plus I'm always chasing work to keep people busy.
    I've had the thoughts of jacking up prices 10% all the way around this year, then if things go bad, just run a real lean outfit with myself and my best worker. That would cut down all my expenses, and eliminate the need for me to spend the weekends chasing work, as I would have enough already built it. In addition I could sell one truck, pay less for insurance etc. I'm really wondering if my net would be much different....anyone done something like this?
     
  2. maelawncare

    maelawncare LawnSite Senior Member
    Posts: 418

    I have thought about it many many times. I am the same size as you and having employees in a PITA. I often thought about just going back to just me.

    Only problem with downsizing. Is you have less accounts. So if you lose one it hurts a lot more. I just lost a $1600 a month year round contract. If I was smaller and only ran 1 employee, I would be ruined.

    There are plus sides and down sides. Best bet is to run a lean as possible. Dont put all you chickens in one basket and be honest with your employees. If theres not work for them that day, theres no work.
     
  3. jsslawncare

    jsslawncare LawnSite Bronze Member
    Posts: 1,674

    I did this 2 yrs ago and it worked out great. I cut hours worked, drive time+ mileage and, and, and, most import- crappy low paying yards, slow paying customer's or if I hated cutting their yard. New customer's had a price increase over what I would normally charge. The next year everyone got a $3 price increase and no one complained about it at all.
     
  4. WheatBookkeeping

    WheatBookkeeping LawnSite Member
    Posts: 108

    If you decide to downsize, you may be selling (disposing) of some of your unneeded assets such as Equipment or Vehicles.

    Have your bookkeeper make sure the accumulated depreciation for the asset(s) in question is current as of the disposal date. Then have him/her create a Journal entry that will remove the asset(s) from the books, and remove the accumulated depreciation from the books, and record the amount you sold the asset(s) for, and record any cost you incurred because of the sale, and record either a loss or gain on the sale.

    The net result of the asset disposals (Gain or Loss on Sale of Assets) will appear on your Income Statement for the period in which the disposal took place.

    It has a bearing on your taxes, so make sure your bookkeeper gets it right.

    take care~
     
  5. Bunton Guy

    Bunton Guy LawnSite Bronze Member
    Posts: 1,743

    I had layed off 4 guys and sold a truck back in 2008. Since then I had gotten rid of all late & slow payers. Net is up big time and headache is down big time.

    It feels better to not be in such a rush in the mornings leaving to go get everything ready at the shop. Now I can take my time and get out because the show doesn't start till im ready.
     
  6. larryinalabama

    larryinalabama LawnSite Fanatic
    Posts: 16,284

    Everyone encourges me to hire people and grow big. Im enyoying being solo and plan on staying that way. Im not getting rich but part of life is enyoying what you do to earn your living. Funny thing most of my business is on the "lake" and I plan to do fish a little this year while Im working.
     
  7. jsslawncare

    jsslawncare LawnSite Bronze Member
    Posts: 1,674

    Larry, I'm planning some fishing trips too this summer.
     
  8. knox gsl

    knox gsl LawnSite Platinum Member
    Posts: 4,740

    This kind of confirms my business goal of getting 60-70 solid residential customers and a dependable full time worker.
     
  9. dmk395

    dmk395 LawnSite Senior Member
    from Ma
    Posts: 992

    I'm really debating on keeping one guy. I can stay busy with that, and take the best and highest clients. I will pay that one guy real well so he will be happy too. The problem with growth often is taking on lower paying stuff to keep busy, but your expenses still stay the same. Growing one more year, then at the end am gonna take a good long look and make a decision.
     
  10. maelawncare

    maelawncare LawnSite Senior Member
    Posts: 418

    Exactly what I am doing this year. I will never go without at least 1 employee anymore. I just hate doing all the work by myself.
     

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