How to fail in the lawn business by someone who did it.

Discussion in 'Lawn Mowing' started by PROCUT1, Feb 18, 2009.

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  1. Hampstead md

    Hampstead md LawnSite Member
    Posts: 17

    Now that makes me feel a bit more at ease. In a nut shell that is my story. However, I am going to try a second time, just this time my plan (business plan) is to grow slowly. I have a much better understanding of what I need to do and not do. #1 DON'T under cut your price, if they can't or don't want to afford it, just walk away. Your better off watching Jerry Springer than paying to mow someone else lawn!
     
  2. FourTrees

    FourTrees LawnSite Senior Member
    from Zone 6
    Posts: 310

    Look this is a great thread, but to many people are getting led a astray.
    many of this these posts probably reflect many peoples views.

    BUT if this is your view that business education and a business plan are not important then it shows how little respect is given to actual business knowledge. The goals are a small part of a business plan, BUT FINANCIAL'S are a massive part of the plan. There are many, many, many aspects to business plan. Another thread was all about someone's was to wordy. In reality it was incomplete and far to short.

    Some people are into this business to survive and get by. Others want to make a living. The real serious, the ones that actually want to build something and remove a lot of their risk are the ones who take time and create a comprehensive plan. They might even be the ones who read more than just one business book.

    You want to succeed, sure go ahead work your butt off. Stay solo keep it small, and when you break a leg hope you have a plan and a ton in the bank. Maybe some of you do, Congratulations. I mean it.

    OR

    Take some time. Learn all you can. Grow as slow or as fast as you can, but make sure you are working smart. Within your means. Man yea I might be a bit rough here, but the greatest business minds in the world would be laughing all the way to the bank with some of the stuff being said.

    I for one did not enter this business cuzz I could cut grass, any idiot can do that. I like what I can learn from this site, but it is not my only source. I do get tired of people acting like business sense doesn't provide much in lawn care.

    Sorry about the rant. I'm not out to offend anyone, but even the OP admits it was bad business decisions that ruined it for him. I'll say his new found success has less to do with the business he is in than the education in business he received from his bad experience.

    So case in point you can learn the hard way from experiencing it yourself or the hard way classes, books, research, etc. One will cost you much more and can be a lot more painful.

    Sure you'll always make some mistakes (like me offending people on this site), just learn from them.

    I just don't want my back and and knees to go out before I have a chance to retire and enjoy life.
     
  3. PROCUT1

    PROCUT1 LawnSite Platinum Member
    from TN
    Posts: 4,909

    Cant fall asleep..Back for a bit..haha

    Exactly right what youre saying.

    It was 100% bad business decisions what got me there.

    Thats my whole point of the thread. What I am trying to emphasize is that the decisions didnt seem bad at the time.

    Size and growth dont cause the problems I mentioned. Bad decisions are the cause.

    Its when the bad decisions and a certain amount of growth come together.

    You can make plenty of imperfect decisions, stay a certain size, and still make a nice profitable living. Those decisions will never show themselves if you are content at the size youre at because there is plenty of cushion.

    You can make a lot of mistakes at a 50% profit margin and do just fine.

    What people arent prepared for is when that profit margin shrinks with growth.

    The mistakes you made at 50% profit and never noticed, will become apparent when you hit 10% profit.
     
  4. PROCUT1

    PROCUT1 LawnSite Platinum Member
    from TN
    Posts: 4,909

    I dont mean to give the wrong idea here either.

    Not everyone is going to go from small, to big, to brink of failure.

    Those who know whats coming, plan for it, and make it through just fine.

    If you know that there will be a time that your expenses will rise disproportionately to your income and that your profit will go down for a while during that period, you can plan for that and be prepared for it. Then when it happens, it wont be a surprise and it will only be another step in building your business. It wont be the catastrophic failure that hit me, and others who didnt see it coming.

    I am not one of those guys who say "stay small"

    I love growth. If the business is not growing, I might as well get a job.

    All of my "doom and gloom" isnt meant to discourage anyone from growing to the next Brickman if thats their goal.

    Im pointing out where i went wrong, because so many people told me what Im telling everyone here and I didnt believe it could happen to me.

    If youre prepared, what is a ten car pileup for most businesses, will just be a speedbump for you.
     
  5. lawnjocky

    lawnjocky LawnSite Member
    Posts: 184

    FourTrees mentioned something I have been thinking about as many posters were singing the praises of being solo. What happens if you're sick or hurt? I started solo and moved up to several crews then crashed. I crashed because of labor problems, which is still a management issue. At the time I did some serious thinking about saying **** on this I'm going solo or have just one helper. I thought it through and now run two trucks and it works pretty well. Solo is more profit, but you're riding close to the edge if something happens to your health. There is also burn out and old age to consider. When you're young or just starting out, 10-12hr days running your own business is fun. Give it 5, 10 or 20 years and some of that fun will be gone. I think the moral of this thread is to learn how to properly manage your business, whatever it's size.
     
  6. Tinkerer

    Tinkerer LawnSite Senior Member
    Posts: 620

    I have only read page 1 so I could be repeating someone else. If you can, buy a house out in the country with a polebarn and loose town or township rules on how you use your property and save that $1000 a month rent.
     
  7. lifetree

    lifetree LawnSite Fanatic
    Posts: 5,370

    Congratulations, $ 90 K a year is good money most everywhere ... it sounds like you've found your niche !!
     
  8. JohnnyRoyale

    JohnnyRoyale LawnSite Senior Member
    Posts: 616

    Very good thread outlining the realities of this industry.

    About 10 years ago, 5th year in my biz, I just finished signing payroll cheques and checking our account balance to make sure all was cool. It wasnt. I freaked out. Checked our recievables, and we had clients that hadnt paid us in 90-120 days. Now on paper everything seemed like we were covered (more coming in than going out), but the timing was off. It just so happened that we started tracking our times on the properties we kept that spring, and after a few phonecalls, some checks were made ready to be picked up in a couple of days and payroll was made. We kept plugging away (not without problems) for another month or so till the end of the season, and finally we could sit down and make some decisions. BTW-We had 4 crews at that point, doing a mix of small commercial and residential maintenance.

    I sat down for a few weeks and first categorized the properties which were most profitable, the ones that paid on time, the ones that allowed for the extras associated with us being their service provider, and the ones that caused us the least grief over the summer.

    The end result was almost half of the properties we services were not in all of the categories above. Some actually cost us money, and lots of it. Far from being a missionary, I rewrote half of the renewal letters with increases to justify the service they were recieveing, most left, some didnt even call back. No problem. I got rid of 2 crews, and associated trucks, trailers, and equipment. And guess what....we made payroll every week without a problem from that spring forward.

    Profits have been steady, workload has been ample, stress has been reduced, employees are happy, life is great. Since then, we have continued to grow every year, actually picking the type of work we want to do, and who we want to work for. Another lesson learned is the guarantee of the payment outweighs the bigger numbers with no guarantee. Most of work now is municipal. Sure it may be a couple of dollars less a day, but the money is wored into my account every 10th of the month-without any excuses or stories.

    The moral of my story (just as yours) is that bigger isnt always better...unless you know your numbers and you manage your assets well.

    Get paid well for what you do well, and get paid on time. This has been my mandate ever since, and it has caused me no grief.
     
  9. scottgalat

    scottgalat LawnSite Member
    Posts: 72

    One responder has said he's re-thinking the 2nd truck addition based on lower expectations from that 2nd vehicle/crew. As an LCO it is possible to know 100% how much that truck will earn you each day, IN ADVANCE. If your route is 30 residential accounts for that day, from that crew. With the right equipment. reliable transportation and good employees...your getting those 30 lawns done. It is my favorite part of being in this business. After you have created PROFITABLE ROUTES, use your management skills to put the gear and people needed to service the routes. Good equipment is available, Good employees are available. Good customers are available...the issue is????? I'm sorry, I experience smooth operations from
    a minute-by-minute planned schedule carefully developed from complete knowledge of the customer's property, location and needs and how to BEST apply the resources available to attain the highest possible profitablility MINUTE BY MINUTE. Wasted minutes? Why? What can be done to get that property to maximum profitability? Three minutes wasted at 30 properties per day is 1.5 hours/day x 5 days X 4 weeks/month x 12months/year
    $16,000 to $20,000 in annual wasted income, MY MONEY. 5 trucks out?
    $100,000/ year wasted because "less-then-best" was acceptable.
    $16,000 per crew? Three minutes/stop. Sounds anal? Stopping $100,000 in waste annually...I'll be a bit anal.
     
  10. humble1

    humble1 LawnSite Silver Member
    from MA
    Posts: 2,495


    I think someone that is firmly entrenched, or has some guidance in understanding how buisness works will get a biz plan first.

    I also think that this is one of the easiest side jobs p/t to get into. Something to pull a mower and some small tool purchases and an ad in the paper and your off to the races right. So having said that you have some years of growth and you go full time. You still dont have a plan, you think your making money when you really arent, because you dont know what your break even point really is. You go by "what every one else is getting" I remember back in the early 90's charging .03 per sq ft to hydroseed 1oK Why becasue that what was the prevailing price. Labor rate was X because that is what most people charged. How many times have you guys said to someone else in the trade- "Hey what do you guys get per irrigation head installed" noone ever meets someone at a seminar to talk about what their breakeven point is? What their fixed costs are, what their variable costs are. The biz plan is usefull but you need to understand all your operating costs.
     
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