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. RLC12065

    RLC12065 LawnSite Member
    Posts: 179

    are you the procut from the clifton park/albany area?
     
  2. PROCUT1

    PROCUT1 LawnSite Platinum Member
    from TN
    Posts: 4,909

    You have 2 mulch suppliers in your area.

    You call company 1 and order a delivery and he tells you hes out of stock until monday.
    You need it tomorrow. So you call company 2 and get it.

    You would still call company one again if you needed something right? Big deal. He was out of stock once. No reason you wouldnt do business with him next time right?

    Suppose company 1 was afraid of losing the mulch sale. You order it to be delivered tomorrow. He says no problem.

    Tomorrow you and your crew are on the job.

    No mulch. Its now 10:00 and still no mulch. Call him at 10:30, he says "Im swamped, Im trying to get it to you"

    12:00 still no mulch. Your customer is ticked, youre paying guys to do nothing.

    Call back at 1:00. Finally says he cant get it until monday.

    Wasted day, ticked off customer, lost payroll, lost income, job not started, schedule screwed up.

    Tell me you wont be telling everyone you know how that mulch supplier screwed you.
    You;re experience was terrible. You will never call him for anything again.
     
  3. PROCUT1

    PROCUT1 LawnSite Platinum Member
    from TN
    Posts: 4,909

    Not me...........
     
  4. letsplay

    letsplay LawnSite Member
    Posts: 95

    Thanks Procut. I have had just the same experience too many times as your sign example. I think hearing from another person about learning from this example is good for me. I have gotten in the same trouble with doing "almost freebie" jobs for friends, family, or designers that have gotten us other projects. We say we are coming to do some work and then every day have a reason to not be there b/c we need to be at a site making money and keeping our word about the service we were hired to do. It comes back to bite you in the butt from a financial point (probably doing that small project for double what you said) and two the designer friend or contractor friend that has other work does not call you back for other work b/c they figure if you can't help them get a small project done on time then how are you going to be reliable for other projects............Time for us to change as you have aswell. Sounds like you are happier and learning from the past but moving on. It is hard to do and I understand after doing this for eleven years and being one footstep away from being too big or over my head.
    Thanks for the feedback.
     
    Hunturkey likes this.
  5. BSDeality

    BSDeality LawnSite Silver Member
    Posts: 2,849

    Very nice post Procut. It takes a real man to stand up and say "I failed". I'm glad you're around still to try to teach some others here to play it smart with business.

    Last year was my last year solo. I had reached the glass ceiling of working solo, I had out grown my home based business and the town zoning guy was crawling up my azz because I had too much stuff around. I either had to scale back slightly and just do lawns and small projects or I had to go bigger. Personally I wasn't content with just lawns, so I decided to grow. In December I went out and rented a building to store my gear at, in the spring bought a dedicated truck for mowing and hired 2 guys FT. Quite a change from my DIY past. I told myself I would keep a close eye on all expenses and make sure the year was going smoothly. Well, 2 new employees, more trucks, equipment, more accounts, headaches, insurance, damages, and gas sure came at me fast. We were so busy with work that I just had to pray we were "making" money. Fortunately the cards started falling into their places as I became a better task manager and learning to only take on work we were good at. We only took on work at our prices which I was comfortable with. Anything I wasn't comfortable I walked away from. We turned down a planting job that would have been in the 80-100k range. that one job was more than my entire years gross a couple years prior. I decided it wasn't worth the risk of a pissed off customer (still our cust to this day) because we couldn't deliver the product on-time. Overall I would call the year a success.

    Last week when I was running the numbers, thinking about putting another lawn crew on the road this spring. The cost to put another crew together wasn't worth it, at least not yet. There too much payroll, advertising (something i've never done), equipment, fuel, etc to buy. I would have too many expenses to make it worth while. I may put another crew on the road further down the road, but for now, its about company growth while maintaining our current size. To accomplish this I am scrutinizing every dollar this winter. First up is some equipment changes, gonna trade in the walk behind for a stander to cover more ground in less time, second up is hiring a company to apply PGRs to our properties to reduce/eliminate weedwacking, thirdly we're sending out insurance requirements out to bid to a few companies and making sure we're getting the best rate.

    Again, nice post Procut, I'd say this thread should be sticky at the top.
     
  6. letsplay

    letsplay LawnSite Member
    Posts: 95

    The comparison to the mulch supplier is right on.............No, don't want everyone to feel that way about our company. We do good work and are known for that and good customer service so if we don't say no to some jobs then that aspect of our company will be ruined. It will also affect the word of mouth advertising that we have. Etc.Etc.
    Thanks for the input now the hard part, listen to what was said.
     
  7. TMlawncare

    TMlawncare LawnSite Bronze Member
    Posts: 1,197

    Some that have Quickbooks don't even bother the put all of their expenses into it. They run their business like they run their household. This is a true story. I have one employee that in December he got his regular paycheck (salaried), his year end bonus check, and two weeks of unemployment. After all his expenses for the month he had $2500 left over. I encouraged him to put some of that away to subsidize his unemployment til he start working again in March. Almost exactly three weeks he didn't know how he was going to pay his utilities. I was like you had over $2500 left over what did you guys buy. He said nothing big. He was right there was no new computer, plasma tv, etc. They just piss potted it away. They do it all the time and never know where the money went.
    There are people like this running businesses all over the country some right here on lawnsite that think they are making a killing. They think besides a few monthly pmts and gas its all profit right. They can't really manage a household. I can' imagine what would happen if I handed the business over to someone like that. I could just envision after about one one the employees all show up for work but the boss blew all the profits from the previous month and can't buy gas for all the crews. Disaster waiting to happen.

    Procut, I have been close to that line a few times myself. I constantly worry about a hurdle being thrown into my path and the impact that would have. I pay attention more now then ever before but often feel like I am sinking a bit even though the gross # increase by 15-20% each year. I get my taxes done next week and we just got everything ready to take. I almost crapped myself when I seen everything put together. Our record keeping it better then ever thanks to our tax man. Everything that ties to the business from postage stamps to gatoraide in the cooler gets counted. When its all figured up it really makes a person step back.
    Thanks for posting this Procut. I just hope everybody understands how easy it is to fall into this spot.
     
  8. letsplay

    letsplay LawnSite Member
    Posts: 95

    Matt,

    I am curious how long it took you to get to the point that you said it was time for a change if you don't mind me asking?

    I have been told that the "average" landscape company goes out of business in less that three years here in North Carolina. And I have seen this many times.
     
  9. PROCUT1

    PROCUT1 LawnSite Platinum Member
    from TN
    Posts: 4,909

    Another thing ive learned is your first impression of someone can be dead wrong. Also your feelings after meeting with someone can be dead wrong too.

    Im very good at sales. Thats what I do for the business full time. I usually know pretty well after a meeting whether or not my company is getting the job. Im usually right.

    Key word...usually

    I have left meetings knowing in my head that I nailed it. I figured Id have the contract on my fax machine before I left their parking lot. The meeting went great, the people love me, I could not ask for better.

    Then I drive by a week later and see the work being done by someone else.......WHAT?!?!?!?!?!

    Ive had meetings where the other party seems to be paying more attention to the dust on his desk than me. Asks no questions and basically seems like he just wants me out of there so he can get to lunch. Cross that sucker off the list.

    Get in my truck and my phone rings......$50,000 signed contract on my fax machine from a meeting I thought was bombed.

    One of my biggest customers I met at dunkin donuts on a sunday.
    I had a company polo on and was just grabbing a coffee on my day off.

    I go to get in my truck and this guy that looks homeless approaches me and asks for a card. The way the guy looked I was leery to give him one, but I did.

    I get a call on monday from a guy that "met me yesterday" and wanted some work quoted.

    I racked my brain and couldnt remember anyone meeting me so I get the address and go meet him at his modest middle class house.

    Well....

    There was the dude from dunkin donuts. He was all cleaned up and looked like a human.
    He is also the managing partner of his Doctors practice.

    Woo Hoo......A doctors office.....

    No...Not a doctors office.

    6 gigantic healthcare properties with gigantic parking lots. It was a doctors office alright. About 75 doctors at each location.

    The "homeless looking guy" in dunkin donuts doubled my sales 2 years ago.
    The doctor that I was going to blow off because I dont do anything that small......well you know the rest.
     
  10. qualitylandscaping

    qualitylandscaping LawnSite Bronze Member
    Posts: 1,581


    Excellent post Procut!


    You have now reached the dreaded "mid zone"

    That is the key. You need to be big (5-7+ trucks) or solo (1 truck). The mid zone (being 2-6 trucks) is tough.

    I really miss the days of being a "one truck operation". It was so much easier and alot more fun. I made alot more money for myself back then too. But I did what everyone else does, and said bigger is better. I added 2nd truck, then a 3rd, then a 4th and I started to realize exactly what you said. Your expenses go up $1.10 for every $1.00 you bring in. So I started offering new services, and bought new equipment (tractors, skid steers, new trucks, skidder, trailers, etc) to try and start a new division in both logging and trucking. This is maybe 4-5 years ago. I just about put myself out of business by doing that.

    I got right out of trucking/logging, sold the equipment, paid off my debts on it. And started back where I really wanted to be. Mowing and nothing but mowing. Did huge direct mail campaigns, and added hundreds of new customers. I'm to the point now, where we have a distinct and specialized service offering. We mow, and do landscape bed maintenance (mulch, edging, hedge trimming, weeding). Occasionally, a hardscape or landscape install to fill the time and get a break from turf if we get a dry period.

    We had a discussion last night about buying new equipment. Sure its nice to have flashy new gear, but it does nothing but leave a burning hole in your wallet and a bad after taste.

    The key to success in this business is to watch where you spend your money. Be as efficient as possible by focusing on one primary service, not being a jack of all trades and a master of never having any money. Being in the middle and trying to do every service under the sun, will literally burn you out. Pick a service, build your first crew. When that route is full, start building another crew, and so on. Don't go out and buy all kinds of equipment for jobs you don't have. Don't take on low profit work, just to have an excuse to start a new crew. Make sure you the help is available, then market, then sign accounts, then hire help, then buy equipment. Grow at a steady pace, yet fast enough you don't spend more than a year or two in the mid zone.
     
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