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. PROCUT1

    PROCUT1 LawnSite Platinum Member
    from TN
    Posts: 4,909

    Larry

    As far as rent vs buy.

    I have no problem buying.

    If you have the cash in the bank for that 12k skidsteer. By all means buy the sucker.

    Pay for it once and you own it free and clear.

    Most guys however will rent a skidsteer for a couple jobs and say "Dang this thing is awesome, i can get a lot of work with one of these"

    Then they will head down to the CAT dealer, pick out a new one, sign the papers and off they go with 7 years of payments.
     
  2. PROCUT1

    PROCUT1 LawnSite Platinum Member
    from TN
    Posts: 4,909

    You can be successful in any market.

    If I went into residential sealcoating, to me, that was too similar to the residential mowing business.

    With residential customers, the competition is heavy. Every lawn guy around here has bought a sealcoat tank to add the "easy money" service.

    Just as the residentials get flooded with cheap mowing flyers every spring, they get flooded with cheap sealing flyers.

    I dont want to put the time into convincing Mrs. Smith that she should hire me for her $150 driveway over the handyman with a squeegee.

    I can put that time into work that pays a lot better.

    Thats why I chose large commercial. The competition is much much less. And the companies I compete with, know the business, and are qualified.

    Its a much easier sell in that case.

    If you look at my website. I do offer residential sealcoating as well. I dont push it, I dont model my business for it.

    With that, the price is the price. And thats it.

    If customers want the largest company that maintains the large commercial properties in the area to service their home....The can call me and Ill do it.

    My pricing is fair. Im not much higher than the residential guys. But I keep it automated.

    You call and give your address.

    My office calls you back with the price and a date we can do it.

    You say yes or no.

    No sales pitch. No nothing.

    With that said, with minimal effort, we do seal a few hundred residentials a year.
     
  3. Junior M

    Junior M LawnSite Fanatic
    Posts: 13,541

    I agree, you can be successful in any market, but it seems like you can grow more and become a bigger business if you go a certain route, like you goin in to commercial seal coating..
     
  4. willretire@40

    willretire@40 LawnSite Bronze Member
    from VA
    Posts: 1,387

    Can you tell us about your mowings rigs i.e truck, how many mowers, employees per rig? Also what kind of propertys sizes were you cutting?
     
  5. TMlawncare

    TMlawncare LawnSite Bronze Member
    Posts: 1,197

    Keep in mind a lot of the fixed costs continue right throught the off season. During the regular season you have to plan on those 3 months off also. This is all part of the overhead. Your shop, truck, mower, supplies, quarterly's, loans, etc don't care if its during the season or not they just keep coming.
     
  6. nobagger

    nobagger LawnSite Gold Member
    from Pa
    Posts: 3,065

    Great post! There are a lot of young naive guys who want to start out like gang buster's and in a year they either go out of business or become the newest lowballer just to pay the bills for the 50k worth of new equipment they bought a year ago. I am one of the guys "quitting my regular job" this year. Some think I'm nuts for leaving a State job but those are many reasons not that this business is a gold mine. My eventual goal is to have an employee base of around 10 guys/girls either mowing/landscaping for me or helping run a garden center in combination. Ive been doing this on my own since 2003 but worked for a company for many years before that and even then and more so now, I could see the amount of guys who "just throw a mower in their trucks" and under cut your price just for fun money. So my plan is to retain the same 50ish customer's we have, we landed another 14 from a guy we bought a mower from and maybe another 15 or so and be happy with that for this year and in 5 years have my goal of a garden center/landscaping service.
     
  7. All_Toro_4ME

    All_Toro_4ME LawnSite Bronze Member
    Posts: 1,578

    Great post. It took me two days to read it, but I read it from beginning to end. Hats off to ya pro cuts.
     
  8. Az Gardener

    Az Gardener LawnSite Gold Member
    Posts: 3,899

    I only read through page 10 sorry I came late to the game. Wife is kicking me off this computer but I have to ask. My numbers tell me my overhead for each rig is aprox the same. my office overhead is also the same 1 truck or 5 so my projections tell me that at 2 rigs operating I break even or just a bit of profit1-3 % with 3 rigs it goes up and get into 4-5 yippee. My model does not have middle management so my administrative overhead should remain about the same.

    I have been in the middle $$$ sucking for a couple of years now and this is my growth year everything else is in place. With all that said here is the question... why would my plan fail? The numbers tell me differently and they are proven out with 8 years of consistent history.

    Not doubting your story and I do track and over analyze every situation. You just increased my pucker factor by about 32% as I have just spent about 4 gr on marketing and systems upgrades for the big push. Great thread BTW.
     
  9. PROCUT1

    PROCUT1 LawnSite Platinum Member
    from TN
    Posts: 4,909

    You are correct.

    Your plan wont fail if you do it right.

    Like you said, how your administrative overhead is the same for 2 trucks or 5, same with shop etc, is exactly my point.

    All of those expenses get spread out over all of your customers.

    In the beginning, there are few customers with very little expense.

    In the growth curve, you hit the point where you have high expense, but not a proportinate number of customers to spread that out. After that, your expenses dont grow as quickly, and you will be adding more customers to spread out your current expenses.

    Hopefully that makes sense, i havent had my coffee yet.
     
  10. Alpha Property

    Alpha Property LawnSite Senior Member
    Posts: 409

    my goal for this coming year is to get 100 customers on signed 52 week contracts, 27 weeks grass and 20 snow, so the average house is $25 to cut and the average drive way is $25, so 52 times $25 is $1300 per customer for the year...100 houses is $130 000 for the year. Now rite now i was doing 40 houses in 4 days solo, so i figure that myself and another guy full time should be-able to so 20 a day for 5 day's, and same for the snow, rite now i'm doing 28 solo with blowers and shovels. now yes this is a big number, $130 000, so i figure $23 000 for a helper full time year round, another $15000 for the year for fuel ($1250 a month), $6000 for insurance for the year, $1200 for my phone bill for the year.... $3600 for the year for truck payment, $2400 for the year for the lease payment on my new wright stander, all the other equipment is paid for. Everything is stored at home, and i am all the management/crew foreman i need and want, so we start with $130 000 and then after we take out all of the expected expenses i'm left with $77 600 to take any unexpected repairs/maintenance and advertising. Now the job that i left last year to do this full time i was making about $22 000 for the year at and was managing but now the business pay's for my insurance, the business pays for most of my fuel, so if i still take my $22 000 out of that $77 600 that was left over, this leaves $50 600 in the business account to cover maintenance and repairs, new equipment, advertising and any other unexpected expenses. Now if i can stick as close to this as possible, and i really don't want more than one crew becuase i'm one of those people that like to know exactly whats going on at all times and i really don't think i could trust anyone else with a truck and trailer and all that equipment with my name on the side of it, i think i'll be doing pretty good for the next year or so
     
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