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Help! Is there anyone making money out there as they grow?

Discussion in 'Lawn Mowing' started by guitarman2420, Jul 4, 2011.

  1. dathorpe

    dathorpe LawnSite Senior Member
    Posts: 459

    Something else I forgot to mention in my previous long winded post - you mentioned rising insurance costs. I was paying approximately $6,500.00 a year in insurance costs. I went to another insurance company and asked for a price to insure my company and they came in $800.00 cheaper for the same insurance. When I told my current insurance company that I was leaving them, they dropped $500.00 below the competitor's price. The competitor then dropped $300.00 further. My current insurance company then said they would drop another $300.00... but only if I signed with them on that day. So, I did and my insurance went from $6,500.00 to $4,600.00 in the span of about five days of phone calls back and forth. When you're a 400k company they want your business and so do a lot of other insurers. Check around and get your insurance cost down.
     
  2. Chilehead

    Chilehead LawnSite Bronze Member
    Male, from Stockbridge, GA
    Posts: 1,891

    For everyone who wants to know how to make the jump to stardom, get yourself a copy of the book, "Rich Dad, Poor Dad" and read it.
     
  3. Patriot Services

    Patriot Services LawnSite Fanatic
    Posts: 12,441

    I just commented on this in another thread. You will not become a RE mogul from reading it. Its about as basic as telling you how to tie your shoes.
    Posted via Mobile Device
     
  4. Chilehead

    Chilehead LawnSite Bronze Member
    Male, from Stockbridge, GA
    Posts: 1,891

    This much is true. However the principle of setting up systems for automatic income generation is paramount, nonetheless.
     
  5. PremierT&L

    PremierT&L LawnSite Member
    Posts: 223

    Our businesses are about the same size, and we've been business about the same length of time. My profits have increased every year though, and I'm very pleased with my income.

    IMO, you need to go through your whole operation to look for ways to be more efficient. I built my business with the idea from day 1 of staying very streamlined and keeping overhead as low as possible. My office is at home, my trucks and equipment are stored at a local storage warehouse facility, and I do not have an office manager. I suggest you look at everything from insurance costs, to how your debt is structured, to how you transport and group your crews. 3 trucks for example is too many for 5 men IMO as you mentioned. You should be able to make money if you're doing 400k with 5 men.

    I hope this helps and wish you luck, however I would also say that if you have built your business in a way where it won't be profitable you may be better off to "blow it up" as you say and focus on design/install where you appear to be making all your money.

    Good luck.
     
  6. Utah Lawn Care

    Utah Lawn Care LawnSite Bronze Member
    Posts: 1,304

    I have a few questions to ask that may sound pretty simple, but may help your business if you think about them and implement some of them.

    Are you billing per man hour for each of your workers? 3 guys @ 50/man hour for 1 hour = 150. It's hard to imagine charging a customer 50/hour for work and paying your help 15/hour and not make a profit.

    Are you doing a lot of traveling? If so could having less people in a truck waste less travel time which means more productivity on the actual sites? Example: 3 guys travel 10 minutes to a location to mow and spend 10 minutes on site. That's 20 minutes of work for 3 guys which equals $50. If two people were to travel 10 minutes and took 15 minutes that would be 50 minutes you're paying employees for instead of 60 minutes. The smaller the crew, the more profitable if they are good workers. Several people traveling and getting paid for it is a lot less efficient than one person for example. Also there is always some waiting around time for one of the crew members that could be more productive if the crew was smaller.

    Are you keeping track of your employees? Are they going for drink runs on the clock? Are they taking bathroom breaks constantly? Are they going to locations in an inefficient manner? Knowing how long a job takes, knowing where your guys should be and at what time can help you keep tabs on them.

    Take a step back and think of anything you can that could help streamline your business and make the necessary changes. Growing should be more profitable and be a wonderful thing if done right. I wish you the best of luck!
     
  7. 94gt331

    94gt331 LawnSite Bronze Member
    Male
    Posts: 1,692

    Guitar man it's been awhile since you originally made the first post. How's your buisiness doing right now? You make any changes and are you seeing more profit. Whats your profit margin from the end of last season? Hope things are getting better for you. Your sales seem to be good for a 5 man crew. Hopefully your getting your debt or fixed costs down to see some good profit. I know in my buisiness some weeks your down and some weeks your up. I was relieved to know my profit margin at the end of the year seeing how I actually made money. Paying the weekly bills are allways a big challenge during the working season when your super busy and allways waiting for money. My biggest goals is get debt paid off to run my expenses down as well as try to bid every job with a profit margin. Getting your profit margin up every year is something to watch even if its just a % on paper you will know where you really are.
     
  8. delphied

    delphied LawnSite Silver Member
    Posts: 2,067

    I wont take a job if it doesnt have a profit margin. Any ideas of of getting into a neighborhood by bidding cheap is a detriment to your own livelihood. Any other reasons for not bidding a profit that Im not thinking of? BTW, 6 years ago $60 per hour was the norm but none of those guys are in lawn care anymore because they consider it a waste of time with todays prices.
     
  9. dnc19694339

    dnc19694339 LawnSite Member
    Posts: 208

    I only read the first few pages of this but want to put in my 2 cents. I run 2 mowing crews and 2 landscape crews plus a landscape supply yard. All my crews make money. I dont understand how a service type business does not make money? You are selling labor, that means that if there is no work then send the guys home or lay someone off! Im guessing either on maintenance one of two things is happening, either your prices are too low or your guys are not productive.

    Also could be too much overhead. I dont run all new trucks. I have 7 trucks. Only 2 have payments on them. The rest are 5-7 years old and paid for. Shiny new trucks dont make us money. Paid off trucks do!

    If your pricing is too low then raise it up. Its as easy as that. losing accounts will always be losing accounts until YOU make them profitable by either raising the price or your employees move faster.

    If you think of it like this it is really just common sense. Charge enough, make sure employees complete job in the time quoted, keep overhead low. DONE
     
  10. hackitdown

    hackitdown LawnSite Silver Member
    Posts: 2,486

    Well said. Nine times out of 10, they are not charging enough. Guys get desperate to fill a route, so they take work at a loss. They think they have low overhead, but only because they don't understand their expenses.

    Never negotiate price, the customer may be lying anyway. Never drop a price to get into the "right" neighborhood, you won't get paid more by the next guy if the first guy tells him your price. You will not "make it up in volume"...it is labor that you are selling. Don't settle for $10 per hour profit. Don't leave money on the table.
     

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