How do you or Have you??

Discussion in 'Landscape Architecture and Design' started by scraper69, Feb 8, 2005.

  1. scraper69

    scraper69 LawnSite Senior Member
    from mi
    Posts: 477

    has anyone taken the jump from small co. to med company? i have 2 other employees and we have 1 dump 3yd and a 1 ton p/u older.. a trailer full of lawn maint equip, skid and all construction tools needed for any landscape project. But we cut lawns 3 men - 1truck 3 or 3 1/2 days per week. Do landscape installs 3 days. I want to expand more of the landscape end of the company, and have 2 guys run my lawns for me. How should i go about this.
    I have looked into another dump truck 6yd for the landscape end (very exp) but it would do the work of 2 three yard trucks. I could probably get another employee that has some experience in the landscape field. Just not sure if i will have enough work. or vice versa and have guys washin trucks 2 days per week?? give any thoughts.
  2. scraper69

    scraper69 LawnSite Senior Member
    from mi
    Posts: 477

    ps. the pick up is for snow plowing only.

    "Should i stay or should i grow"?
  3. desertrat

    desertrat LawnSite Member
    Posts: 86

    I feel your pain. I have a 2-3 man crew and we do everything. I do mainly installs and am building maint. accounts to eventually have a separate maint. crew. I am trying to build a business that will make money without me being there doing the work. One idea I have been thinking about is kinda subbing it out. I will be looking for a guy that has a truck and equip. for maint, and pay him an amount for every account. I would set up the schedule and collect the money and pay him. This would save me the expense of buying a truck and equip. The thing is, I see lots of guys around here start out small like me and suddenly they have 10 trucks and advertise everywhere. Then a year later they are gone. I don't want to make that mistake, and sometimes think it is better to stay small. On a decent week I can clear $1500, and on a great week I can make 5x that, so do I really want to get "big"? The problem is that I am almost 40, and although I am fit and feel fine, the only way money comes in is if I am out there busting my *ss. I won't be able to do that at 60. Some months money is great and I am ready to go big, and then it slows down, so how do I hire an experienced guy and pay him a decent salary when times are lean. Right now, if it is slow, I don't work and don't have to pay anyone. I have talked to a few people in the trades and they say that our position is the most difficult, stuck in the middle. I have a friend that is a General Contractor and he decided to go big, get an office hire 3 project managers and go for it. He has tripled his business, but he still only makes $50k a year. If he gets lots of work he can handle it and could be making big money, or he could go under next year. Tough decisions. Not sure I answered or helped, other than to say I feel your pain and these decisions aren't easy.
  4. scraper69

    scraper69 LawnSite Senior Member
    from mi
    Posts: 477

    yea thanks anyway rat.. i hate the position in the middle. Either too much or too little. no happy medium. Ive just got to decide soon if i am going to do something this year!!!
  5. AGLA

    AGLA LawnSite Bronze Member
    Posts: 1,742

    There are more landscapers in your boat than anywhere else. I was there myself once. Now that I am out of that situation and have worked for many others that have moved ahead of that boat, I can clearly see what the problem is and the mistakes that we make when we do not recognize the problem. It might sound harsh, but remember that I am criticizing what I did just as much as I am criticizing what you are doing now.

    The problem is that you look at the company's ability to expand based on what equipment you have, services that you can provide, and who you can hire in order to get it done. The thing that so many of us do not recognize is that anyone can buy equipment and hire workers, but not everyone can manage more than two or three employees. The companies that are able to get over that hump do so because the owner has a higher capacity to manage help than you or I do.

    If you or I could hire help and have them run the business for us it means that they are capable of running the business. What could possibly make you think they want to do it for you? Your answer, if in keeping with most people that I pose the question to, is that you would pay them a lot of money. What that says is that you want them to run it and hand you a chunk of the profit without doing much for it. You can tell yourself that you have developed the business and therefore are in a position to give them the opportunity, but almost anyone can quickly start a three man landscape company, so your position is far from unique. It is all but impossible for any company to hire a manager that is going to come in and manage your help better than you can because in the end you have to manage him. Only a good people manager can have good people managers work for them for very long.

    The thing that you have to do is to look at yourself and realize how many people (employees) you are capable of managing and design your business around that. The most common dumb mistake is to try to offer more and more services without having the ability to add the man power to do any of those services anywhere near full time. Instead it is to mow 3 days a week, run a bobcat and dump truck 2 days a week, so that all of your equipment's fixed overhead is divided over a much smaller amount of billable hours and you make less money while increasing your gross.

    If you have $20k of mowing equipment getting expensed over three years at 24 hours a week for 26 weeks a year that is eating $10.68 an hour vs. $6.41 an hour if it was working 40 hours. Would you pay a part time employee $4.27 an hour more? No, but you don't think twice about paying it to your equipment.

    The companies that get big max out the number of hours that their equipment bills out and their overhead shrinks and shrinks. Three man companies try to expand services buy having more and more equipment working less and less hours increasing overhead all of the time while billing out only three men.

    I suggest that you push yourself to learn just how many people you can manage then understand whatever your limit is and design your business to be the most efficient for that amount of men. Specialization reduces overhead and makes you attractive as a subcontractor because you do not compete with other services that may want to hire you.

    ...just my opinion.
  6. YardPro

    YardPro LawnSite Gold Member
    Posts: 3,563

    great advise.

    generally the $250K mark is where you NEED middle management.

    you will need to find skilled people and pay them WELL and offer them whatever perks it takesto keep them happy. more oftern than not, it's the perks that will keep them.
    the person you need to put in place should be a skilled individual that can manage others.
    give them room to make mistakes, they will, but will grow out of them...
    also let go of some of youe control.
    you should, at this point, not be working in the field, rather working ON your business.
  7. kris

    kris LawnSite Bronze Member
    from nowhere
    Posts: 1,579

    Could someone define Small, medium, and Large. .... My thoughts are that a Large company is doing 5M plus (construction) meduim 2-5M.
  8. scraper69

    scraper69 LawnSite Senior Member
    from mi
    Posts: 477

    I could describe myself as a small business. and yes i have a very good leader, to take one end of my business on. He was an owner of his own construction co. for 25yrs and recently retired, now he wants to help me, (Family) - so i have that person i need to work and build work around, although he plans on only stayin for about 5 more years max.(untill he retires fully) so i want to grow while i have him in my company. - He has much experience with the general business end and his specialties of construction- just over 4yrs exp with my business, and hes ready to help me grow, whenever i am ready. (he is a great people manager - not to mention salesmen) i just worry about taking on the work and not having the workers to fill all job requirement or taking on more emps and not enough work for them. *i also have much business exp.(hands on as well as college educ) no worry s on that end( i assume i could manage myself up to 6 emps with no problems. my ? is has anyone done this jump>>>
  9. scraper69

    scraper69 LawnSite Senior Member
    from mi
    Posts: 477

    yard pro.. i find it too hard right now to take myself out of the field. i like to sell the jobs and also install.- i do want out of the lawn mait. field though.
    I just have to have the job perfect, for i am a perfectionist(neat freak) and cant find people that do the job like i want it. Very tough to get out- even though i understand where you are coming from. Need to focus on business end. NO DOUBT
  10. newleaflandscape

    newleaflandscape LawnSite Senior Member
    Posts: 348

    Dont know where you are at in Michigan but if I were you I would nt do any expanding this year. I own a company north of lansing. Only reason I say this is the falling economy here in Michigan. Last year I wouldnt have said that because even though the economy was down here construction was up. That doesnt look like the case this year though unfortunatly. I have been talking with alot of the builders I do work with and all of them are expecting a rough year. Every where you look people are loosing jobs. Maybe you wont be doing that much new home installation but I would say 80 percent on my business is new homes and new commercial construction since we only do install. Last year was great for us and looking at it I would love to expand a little myself, but I have decided to sit back and see how this year goes. Everyone I talk to seems to be thinking the same thing. Dont mean to be negative about this but I have heard many sob stories over companies that expanded in the wrong years and took out loans for equipment that they couldnt pay for. Good luck to you if you do decide to grow.

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