is bigger better?

Discussion in 'Lawn Mowing' started by Brianj, Jun 17, 2005.

  1. Brianj

    Brianj LawnSite Member
    Posts: 196

    this summer i started a 2nd truck, this is first time we have ever done that, it seems so far though that im making about the same amount of money with 3 employees then was making with me and 1 employee, i mean there is more cash flow but bottom line numbers are about the same. and i am still working just as hard if not harder. im not sure bigger is better.. let me if u think.
     
  2. chefdrp

    chefdrp LawnSite Bronze Member
    Posts: 1,384

    thats why i am going to try and stay small. Ratio wise i am making more than the big boys.why work just as hard and have extra worries and still bring home the same money?
     
  3. Thirdpete

    Thirdpete LawnSite Member
    from Chicago
    Posts: 236

    i don't hear people looking at businesses as an investment.

    if its a sole proprietorship, owning all that equipment is quite a large sum of money. two trucks, six mowers, 4 blowers, 4 trimmers, two trailers, two spreaders, etc.... as long as you keep away from lawsuits, your networth just keeps increasing. when it comes time to retire, should you sell the business, you will make more from 10 trucks, 10 trailers, etc.... than you would from your solo rig.

    am i understanding that correctly?
     
  4. lawnprosteveo

    lawnprosteveo LawnSite Bronze Member
    from Tulsa
    Posts: 1,930

    I "downsized" this year. Working by myself with a little help from my wife one day a week. All I can say is our savings account is growing nicely! No workers comp, no wages, no payroll taxes, no bookwork or accounting fees, fewer customer complaints, noone being rough with the equipment.....I could go on and on. All I can say is smaller works for me.
     
  5. Supertiger

    Supertiger LawnSite Member
    Posts: 189

    i feel the same way, the most money i made was when there was only me and my self. but now im running two trucks and 3 emplayees and im making less for my family and making all the mower companys rich.
     
  6. lawnprosteveo

    lawnprosteveo LawnSite Bronze Member
    from Tulsa
    Posts: 1,930

    When I went over my income/expense numbers for last year, I found that it took 10 to 15 yards in order to break even on one employee. It just didnt seem worth it to me.
     
  7. bobbygedd

    bobbygedd LawnSite Fanatic
    from NJ
    Posts: 10,178

    HERE IS THE PROBLEM........you tried to duplicate yourself, and that won't work. when it was only you.....ok, let's do some numbers. when it was only you, let's say you had 30 accounts. your overhead was low. let's say 10k per season on the overhead. lets's say the 30 accounts were bringing in $1500 each. that's 45k gross, minus the 10k of overhead, leaving 35k taxable income possibility. NOW, you have employees. when it was only you, you weren't LOSING money during travel time, stuck in traffic, rain delays. you have employees, you are paying workers comp, matching taxes, etc. if you had the same setup, for a new employee, leaving 35k after overhead, then minus his salary, say 25k, that leaves 10k extra for you, right? now deduct the damage these meatheads will do to your clients properties, and to your equipment, a few call outs here and there, and you may be left with around 8k taxable income. send in $2500 of that, and the remaining is $5500 divided into a 38 week work season= a wopping $144 a week you are making of an employee. hardly worth the effort and agrivation, huh? the problem with the lawn business, is the ever increasing cost of doing business, and the ever decreasing value of the work. in other words, it cost more and more to run the business, but you can't increase your fees to cover these costs, thanks to the mass population entering the field. this is why i devised my new system. imagine taking that 45 k on the extra setup, ELIMINATING the additional 10k of overhead. this leaves 45k. now, with my new system, you generate more production, in less time, so the number is more like 70k. minus his salary of 25k, leaving you an ADDITIONAL 45k per season, with no additional overhead. remember- if you always do what you always did, you will always be what you always were.
     
  8. MowerMoney

    MowerMoney LawnSite Senior Member
    Posts: 281

    I have also tried to increase production by hiring an employee. I found that the best I could get was about 10% - 20% better efficiency but after the extra costs, the net profit was NOT worth the effort. I think that the only true benefit of having crews doing the work is that if you get large enough then YOU don't have to do the physical labour youself. You would just be doing the management, estimates, public relations, paperwork, etc. Some call it "Working smarter, Not harder". BUT that can also mean more headaches and stress. I worked in corporate management for many years and was always totally stressed out. Now that I am a solo LCO, I work harder physically BUT have a lot less stress. Guess it all depends on what you want to do and how you can handle the stresses of getting big.
    Just my $0.02
     
  9. ercrvs24

    ercrvs24 LawnSite Member
    Posts: 93

    I don't have employees and don't know much about "how tos" of paying into workers comp, salary, etc. But, why can't you guys hire them as "independent contractors", that way you wouldn't have to pay on their taxes or pay for workers comp? Would that work?
     
  10. DLS1

    DLS1 LawnSite Bronze Member
    Posts: 1,619

    This has been talked about a few times and it is against the law to be hire someone as an "independent contractors" if they are using your equipment.
     

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