How do you scale a lawn/landscaping business?

Discussion in 'Business Operations' started by Ijustwantausername, Sep 24, 2012.

  1. Ijustwantausername

    Ijustwantausername LawnSite Bronze Member
    Posts: 1,443

    I'm a sole proprietor and have been for the past 7 years. I started my business in Highschool and operated it through college. I graduated in 2010 (college) and with that I was able to focus solely on growing my business. Now I have quite a few accounts - all a combination of Churches, businesses, and residentials. I know for a fact I could grow more if I had more help. The problem I am running into with this is people either not wanting to help/perform manual labor, or people don't last long. Is their any remedy to this?

    Additionally, lets say I was able to hire 1, maybe 2 good workers next year and start a crew. What's a good salary percentage to take out of the business for me? What is it like taking (I'm assuming) a big pay cut the first few years of operation to be able to have a crew? I ask this because now all profit goes into pocket, add workers and the additional expenses and it does not.
     
  2. 32vld

    32vld LawnSite Gold Member
    Posts: 3,984

    Putting the cart in front of the horse.
    You want to hire two employees when you have enough work for just you.

    Then you ask how much you can pay yourself. Duh, you know your gross, costs, net. Hire an employee your costs go up net goes who knows where because how much additional work will be done by increasing your work force.

    Planning on getting more work and actually doing it does not always match.

    I would add one employee at first once you have more work then you can handle.

     
  3. nealster

    nealster LawnSite Member
    Posts: 20

    If you add more clients, your income goes up. This is the income that will pay for the employees. You need to figure out what you need to make to live comfortably and not take all of the profit. It may be a big paycut if you are taking all of the profit right now.

    If you are a sole proprietor let the company pay for as many comapny related expenses as you can, this way you will have less out of pocket expenses, for example( cell phone, vehicle insurance, health insurance, fuel for your vehicle(s), loan payment for the vehicle(s)) etc.

    Finding good workers will always be an issue, it is an issue everywhere. i always start and the unemployment office. You will always find people looking for work, quickly and will be willing to make some sacrifices to earn a decent wage. What ever you do , don't pay overtime, you will see your profit go down the drain, work no more than 40 hours per week. You may not have enough work for one peson for 40 hours, but some type of a paycheck to an unemployed person is better than nothing. Also putting someone on payroll (taxes, Social Security and medicare fees can be an expensive venture). I have people hired as 1099 laborers until i could afford it. It took me a year and half before I could afford payroll taxes. Pay them a base hourly wage with a weekly check (no taxes taken out) and issue them a 1099 form each year thru your accountant or CPA until you can afford to deal with the payroll taxes. Typical payrate for laborers is $8-9 dollars per hour. If they are worth more then let them earn it.
     
  4. jrs.landscaping

    jrs.landscaping LawnSite Silver Member
    from Maine
    Posts: 2,716

    You can't 1099 an employee, unless you are looking to get an unexpected visit from the IRS. Don't hire employees unless you have the work. On another thread someone mentioned each employee has to gross around 50k or else you are losing money. I agree with this, if you aren't grossing over 150k per year your 2 new employees aren't paying for themselves.
     
  5. Greg78

    Greg78 LawnSite Silver Member
    Posts: 2,010

    Holy Crap!! Not the 1099 thing again. nealster the way you were doing it is totally wrong in the eyes of the IRS and that is all that really matters.

    Taken from another thread.
     
  6. jrs.landscaping

    jrs.landscaping LawnSite Silver Member
    from Maine
    Posts: 2,716

    :laugh::laugh: I was think the same thing
     

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