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

    Yep. But it was only 600 a month.
     
  2. goodgreen

    goodgreen LawnSite Senior Member
    Posts: 364

    I've been solo for nearly 10 years and it's been fine. But it's age that makes me want to get a young helper at some point.
     
  3. qualitylandscaping

    qualitylandscaping LawnSite Bronze Member
    Posts: 1,581


    My new 08 F350 ($50k) $787.62 a month for 5 years.
    My new 08 F350 now worth ($25k) @ 1 year old.
    Loss of $25k in one year!!!


    2001 F350 bought in 2006 for $16,000
    2001 F350 value in 2009 $14,000
    Loss of $2k in 3 years!!


    I love having brand new equipment. It really makes you stand out, and you feel cool for owning something so nice. In reality, your "coolness" comes at a huge cost, that does nothing to improve your business financially. Put a dent in that brand new truck, and you're sick to your stomach over it. Put a dent in an older truck, no big deal.

    Same thing with my camper. I go camping 2-3 weekends during the summer with my dad. We used to take a tent ($120 at Walmart). I got tired of going to the campgrounds only to see huge, sweet rigs. Soooo, I broke down and spent $30k on a fifth wheel loaded to the brim with luxuries. Could have met myself in the middle with a used coach, or a new pop up; but nope I had to have the best.

    Where has that left me? $22k in debt for something I use 2-3 times a year. I've taken it to be appraised thinking I could sell it and go buy more equipment. Its worth $11k. Now what? I sell it and lose my britches or I keep it and let it collect dust in the driveway.

    I'm not hurting financially, just trying to make a point. Really consider your options when purchasing equipment, and don't be impulsive about it. Make sure you absoutley NEED that machine/truck. Don't get it just because its nice and you really like it, and you want to be better than everyone else. As soon as you start into the payment book, you will change your mind. ;)
     
  4. mattfromNY

    mattfromNY LawnSite Bronze Member
    Posts: 1,580

    WOW! great post... I finally got to the end, started reading it 3 different times, over the last 3 days, keep getting interupted to plow snow, only to come back to 3 more pages of reading...
    I'm definately in the content of this post somewhere, but my demise was right at the beginning, having bought lotsa nice shiny new equipment and not enough work to cover the expenses, using credit cards when cash flow wasn't there, hiring a helper and finding 'busy work' to keep him paid, 'over-insuring' myself so I could land some larger commercial accounts, etc...
    Two years ago cancelled all the CC's, if I cant write a check I dont need it, if no work employee is sent home now, business plan in effect and running pretty smoothly now, just a little worried about the economy this next year or two...

    PROCUT, great post, should be mandatory reading for anyone looking to start up.
    You werent Chittin' when you say WC is outrageous in NY!!!!! I've got an audit Monday.:cry:
     
  5. qualitylandscaping

    qualitylandscaping LawnSite Bronze Member
    Posts: 1,581


    Ya you're not kidding.

    We're at 9% for W.C.
    9.25% for Unemployment

    It's ridiculous!!
     
  6. procut

    procut LawnSite Bronze Member
    Posts: 1,853

    Well, I might as well chime in, too. 19 Pages was a lot to read, but there was definatly some good information mixed in there.

    I know what you mean, about the gross vs. net thing. Its so easy to sit back and say, "Whats a $450 payment, thats a fraction of what I 'make' in a month."

    One thing I have found helpfull is doing monthly profit and loss statements. They can really bring you back down to earth in a hurry. Its great because you can really see where the $$ are going each month and how much your really 'making.'

    I'm going into my 5th year full time and am still very small. People tell me all the time, "You need to get a bunch of work, hire a couple guys and then just sit back and count the money." I just smile and say, "Maybe some day."

    PROCUT1, great thread and best of luck with your new venture.
     
  7. ashelton

    ashelton LawnSite Member
    from florida
    Posts: 150

    Thank you for this post.
     
  8. greendoctor

    greendoctor LawnSite Fanatic
    Posts: 9,122

    My best instruction came from being an employee at a "landscaping" company for 16 years. Everything you did wrong, they did it. 20 employees, 10 vehicles, and two owners that should find another line of work. Add to that some of that CEO/MBA greed mentality. I left in 2007 to become a solo LCO. I am not big, have less than 100 monthly clients. But whatever I do, profit is high. I am also not in competition with all of the companies with their lettered trucks and 20+ employees or even the 1001 solo operations here. I do not mow lawns, haul trash, trim trees, install landscapes or entire irrigation systems. I am a lawn and landscape health manager. Yes I spray and fertilize, but that is just one part of what I do. I take a very integrated approach to lawn care. This is one of the roles I played while I was someone's employee, unfortunately management decided they wanted to do jobs that bid at $100,000, but that bit about the overhead and profit came true. What is the point of the $100,000 job if that only equals less than $10,000 profit.

    I know my costs and make sure those costs are covered when I give someone a price. Not covering those costs and having a comfortable cushion can come back to bite. In my line of work, some materials cost $200-400 a lb. No problem. When a client needs me to use such a material. There is no scrambling on my part, wondering how I am going to pay for this. When I was someone's employee, there was always this need to be cheap and hold back. How many times I was told that something could not be done because of what it would cost. This is in regards to paying customers who expected us to maintain their lawns and landscapes in perfect condition. Needless to say situations like this snowballed. The company acquired a reputation for charging a big company price, but delivering a cheap product. That has now come back to hurt them and many other companies like them here. In a bad economy, it is hard to gain and retain clients when they do not think you will give them what they are paying for. Yes, I start at $100 a month per 1000 sq ft for lawn care. But my lawn looks a lot different than the one next to it where the "landscaper" does the fert, squirt, and mows it as well for $150-175. How that happens is with high facility, administrative, and capitol overhead, comes the inability to pay someone like me, supply someone like me and retain me as an employee.
     
  9. PROCUT1

    PROCUT1 LawnSite Platinum Member
    from TN
    Posts: 4,909

    Just curious. I noticed everyone comes back with a different page count. Another posted just said 19 pages. I see this thread as 5 pages....Why is that? Is there a setting or something?
     
  10. greendoctor

    greendoctor LawnSite Fanatic
    Posts: 9,122

    Yes, it is a setting. I chose to have 20 posts per page appear. So this is a 5 page thread to me.
     
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