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. Sammy

    Sammy LawnSite Bronze Member
    Posts: 1,734

    He was thinking ..... on how he could still keep useing it if someone was lame enough to buy into it !!!
     
  2. coolluv

    coolluv LawnSite Gold Member
    from Atlanta
    Posts: 3,563

    Awesome post and some really great responses. I would love to see more threads like this. Never mind, What mower should I buy?:hammerhead:

    Dave...
     
  3. larryinalabama

    larryinalabama LawnSite Fanatic
    Posts: 16,437

    I have said this over and over here on lawnsite and get laughed at everytime, but here goes.

    RUN YOUR BUSINESS DEBT FREE
     
  4. PROCUT1

    PROCUT1 LawnSite Platinum Member
    from TN
    Posts: 4,909

    Just a little backround how this went down.

    I do make it sound like my "crash" was worse than it was. It was bad. But I am still here today.

    3 years ago is when money started getting tight. What I did was send a supervisor out to follow each crew through their route and time every job.

    Once that was done we had time data on how long it took to do each job and the drive time.

    That is when I realized that the average profit off of a $30 lawn was about $3 if everything went right.

    That was gross profit. Meaning profit after just the direct costs to do the job, not including overhead.

    So obviously if you looked at that, you can see once I figured in my enormous overhead, I was dead.

    It was hard because my houses were so close. i had the perfect route.

    Once I calculated the numbers, I would have almost had to double prices in order to cover the expenses, and have a reasonable profit.

    We know in this business, that wouldnt be possible.

    So the decision was made to sell the lawn routes. I sold most of them that year. Unlike what most people say on here, I got very good money for them, a fair price, and there were no contracts.

    That left me with one route left that was about 200 homes that were all in one subdivison. This particular route was profitable. One 2 person crew could spend the whole week in there and it made some nice money at the end of the week. A tank of gas for the truck lasted a month practically, thats how close these houses were.

    So now I had sold most of the routes but still had the overhead that I had, and most of it I was stuck with including debt payments. So I wouldnt be able to make it on one route alone.

    At the same time as mowing I had a few years ago added sealcoating to my list of services and that had done well. More and more I started expanding into commercial work and started realizing that was the direction I wanted to go.

    I like commercial customers better, I like the limited competition, I like that other things are looked at besides price. I also like that the margins are better.

    So I focused all of my effort on that business and got it really going. I started going full steam after large commercial work and got real busy.

    At the end of the next season 2 years ago I sold off the last mowing route, and Im still collecting a check monthly for that.

    Now Im totally out of mowing and full time into the other work.

    I never got as bad as having trucks repossessed or buildings foreclosed. But it did get bad enough that collections calls outnumbered customer calls.

    Overall, as sick as it is to say, I think its the best thing that ever happened to me. Im in this newer business now with the knowledge fresh of the dangers that are hidden below the surface.
     
  5. PROCUT1

    PROCUT1 LawnSite Platinum Member
    from TN
    Posts: 4,909

    And that right there is the answer.

    Thats how I do it now. No credit for anything.

    If I need a machine I wait till I have the money to buy or I rent it. Everything is paid in cash.

    If I cant write a check for it I dont buy it.

    If you have no debt, you are much less worried if the work slows down. Then you just make less money, instead of going further in the hole.
     
  6. STIHL GUY

    STIHL GUY LawnSite Fanatic
    from CT
    Posts: 5,225

    this is a great thread. hopefully this thread will prevent others from making those mistakes and going under
     
  7. larryinalabama

    larryinalabama LawnSite Fanatic
    Posts: 16,437

    Thanks PROCUT.

    The other day I saw 2 BRAND NEW Duelly trucks parked side by side with the same lettering. They were there over 3 hours. So im sure they made no monwy that day. Both had new trilers with new equiptment, I just wonder how in the world someone could pay for those, the rigs would have to cost over 100k each. Im glad its not me.

    I dont understand that nonsense at all, my 6000$ tuck will leave just as good lawn stripes as your 60000$ truck will, and customers know it.

    As far as all the renting goes, if you use something even occaosinally BUY IT. You can buy a good useable skid steer for 12K, why rent and spent 5k for a year.
     
  8. Alpha Property

    Alpha Property LawnSite Senior Member
    Posts: 409

    wow, 14 awesome super informative pages and counting
     
  9. coolluv

    coolluv LawnSite Gold Member
    from Atlanta
    Posts: 3,563

    Ive got a question. How did your overhead get so high? Could you explain?

    Dave...
     
  10. topsites

    topsites LawnSite Fanatic
    Posts: 21,654

    Hey before I pass judgment I might have to read the whole thing, I think this is probably some good stuff. :p
    LOL

    Peace
     
    Last edited: Feb 19, 2009
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