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Discussion in 'Lawn Mowing' started by guitarman2420, Jul 4, 2011.
I'm in it for the exercise.
You're right! Being the boss is about growing and managing the business. As the owner, we should not be out there working our ass off cutting grass every day. There in lies my delema. I as a small time one horse opperation I can't justify paying a 2 man crew to cut my rout. I can barely afford to pay one full timer to work side by side with me. So how am I supposed to grow my business to the next level when I'm chained to my maintenance rout all week? Wil someone tell me how I'm supposed to break out of this catch 22 situation?
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My labor rate is $50 per man/hr but I have a hard time getting that for all labor related work. Everything I price is based on that rate but in the end I often have to settle for less to keep the customers happy. If I accually charged $50 per man/hr for my fall clean-ups I would have people canceling service right & left.
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I mean no disrespect to you when I say this but if you are settling for less and not making your costs then that is actually money out of your pocket, in other words you are paying your customer to do their work. Most of us if we are honest have done things like this, but learn a lesson right now and do NOT do that, you are pissing away what little bit of hard earned money you have made.
It's simple. Quit low balling and find better customers. If your barely making money you are too cheap.
He said he charges $50. He didnt mention his true costs per hour. I live in a different area and I charge $30 per man hour. My costs to keep that employee moving with equipment and what not is $20 per hour, actually a little higher this year. Gotta know what it costs before you go anywhere.
I think we all understand the frustrations that come with being the owner of a business. I was too busy working to do the proper supervision of employees and jobs to manage the company successfully. My paperwork was a mess. Billing was behind and accounts receivables were not being controlled. I thought I was too busy to do this work. I was getting in to eat about 9 pm and working on paperwork til between 11 pm and 2 am almost every day. I have started to get a handle on things and here is how I did it. I hired an office manager FULL TIME. The office manager answers the phone. Schedules jobs and appointments. No more forgetting to write down name and number because I was in the middle of a irrigation repair when the cell phone rings. No more forgetting to charge for a service or material because my receipts are billings are being checked and sent out at the right time. We now have employee handbooks (signed off by employees so they know what is expected and what they WILL get fired for), job descriptions, we set goals for the year and check to see it we are on schedule, I get a profit and loss statement each month and for each landscaping job.
Now I can get out and sell jobs and services and do quality control checks before things get out of hand. Things are going sooooo much smoother. I have my life back and I am not doing all the work. But I am managing better because I have the time to do that.
I am making less money than I was with 2 employees and myself. But I have the system to continue to grow where I was limited with what I could make with just a few employees and myself. I believe I can grow to one million or one and one half million with my current systems in place. I would have to add equipment and employees but the system is in place.
I would let go a field employee before I would be without an office manager. Best decision I ever made.
Biodale you are exactly right everyone needs an office person.
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Congrats on your growth and your decision to add office support.
My experience has been that there are profitable plateaus in all businesses and barriers to push through in order to reach the next level. The need to add infrastructure (management, facilities, office staff) before the revenue is there is common for any business. Those plateaus in the green industry seem to be at 500k - 1 million - 2.5 million - 5 million. To push from 500k to 1 million you probably have invested in some type of shop or office, office staff, field management - all these stay fixed and you realize "economies of scale" - then the next plateau comes and you have to invest and fight to get to that next level. Really helpful to have a 3 year vision of where you want your company to be and then align a 1 year strategy with quarterly goals to get you there.
Wow, I love this thread. Guitarman, you and I, I believe, are very similar. My business is also located in Virginia. I also typically carry 5 - 6 employess with a few extra hired during the spring season into the early summer. Our gross sales, number of trucks, etc. is almost spot on. I could be wrong but I also get a sense that our background in the landscape business is very similar. I used to work for a large landscape business in the Washington, DC metro area. I did landscape design and ran the landscape division (as opposed to maintenance division) of the company. I left and started my own business doing only hardscape & landscape installs. Because that work is so up and down, I started doing lawn maintenance to stabilize the cash flow.
I can sense your frustration in your original post. I thought I would share some of the things I have done that have worked for me.
When I first started, most everything was used, cheap equipment. I currently own four trucks and I didn't buy any of them new. Three are used Isuzu cab-over five speed diesel dumps. One is a '05 F-250 crew cab diesel. I'm always searching for a great deal, not just a good deal. I bought one truck in Hershey, Pennsylvania. I caught a flight to Tuscaloosa, Alabama to buy another truck and then drove it back to Virginia. I got that truck for about 5k less than it would sell for here in Virginia. Those trucks are virtually indestructable and keep my costs down. I bought mostly used Exmark / Toro equipment with 700 hrs. or less. Again, always searching for a great deal. I'm very careful to carry little or no debt. The man who taught me this business used to say, "you pay your bills before you eat" and I think that's great advice.
I typically don't hire "experienced guys" unless I can get them for what I consider a bargain. When I hire employees, I meet with them first, kind of a pre-screen, and have a questionaire for them to fill out. More often than not, I make the correct choice on the person I hire and when I don't, I simply let them go because I am too small to carry non-producers. I remind my employees that we are a small operation and that, especially on maintenance contracts, we must do a great job everytime out because if I lose a maintenance job, then maybe I don't have the need for as many employees. I start my employees at $10.00 per hour but they must have a good driving record or I wont hire them. I will give raises, reluctantly however, if their production warrants it. When I give a raise in pay, I make sure the employee knows that this is between him and me and that it's no one else's business... and I expect for him to keep it that way. Most importantly in dealing with employees is letting them know exactly what is expected of them and exactly what will not be tolerated.
There is absolutely no way I'm paying any employee $36,000.00. Maybe someday when my business can support it but as of right now, at 400k gross, it's not going to happen. I have a three man crew doing the mowing and one of those guys has been with me for four years and another guy for two years. The third will be someone I'll pick up in the spring. Those two experienced guys know what I expect of the mowing crew.
Like yourself, I'm with the landscape crew most days, making sure the job is done correctly. I have two guys on this crew that have been with me for two years. They have a general idea of how things work. I may set plants out and then leave for a few hours to visit a client but then I'll come back and make sure everything is as it should be. If it's not, I'll show my guys what we need to do better and correct it. You have to be a teacher... it's in your best interest.
I find that with most people, it's the small things that really matter. Some days, I'll show up on a job and take a crew of emplyees to a cheap buffet place and buy their lunch. Guys love that... especially if it's a hot day. It's a way of showing my appreciation and maybe, just maybe they'll remember that the next time they don't feel like walking way down the hill to string trim around that one, lone tree. It's the same with clients... the little things. Even my smallest clients, if they call, I make every effort to cure whatever ails them. Most times, clients just want to be heard... and they like the fact that the owner of the company is the one listening to their concerns and assuring them that they will be taken care of.
Right now, my business is small enough that I can manage it myself though there are times that it gets fairly hectic. But that's okay because I really enjoy this business and I absolutely love owning my own company. Someone on this thread mentioned plateaus and I think there's a lot of truth to that. I don't believe 400k is a high enough plateau for office workers and 36k employees... but that's just my opinion.