Is smaller better/more profitable?

Discussion in 'Lawn Mowing' started by CharlieBingo, Feb 3, 2005.

  1. CharlieBingo

    CharlieBingo LawnSite Senior Member
    Posts: 400

    After downsizing, I began making more money. Grossing less and netting more. I have watched guys go belly up with two, three and four hundred customers. I know several guys with less than 100 lawns doing very well. Are muliple crews ,fleets of trucks and too many workers like quick sand. Everyone aspires to get bigger are we barking up the wrong tree?
     
  2. Randy Scott

    Randy Scott LawnSite Bronze Member
    Posts: 1,915

    How small of downsizing are you talking? One man show with a helper? One crew, two crews?

    Money can be made at this game, whatever size you choose to be. Don't blame the business for failure if someone can't do it large scale. It's their fault, no one else's. Plain and simple.

    My question is, do you want to do this every day all day when your 55 years old? I sure as he ll don't. Therefore, I better be able to succeed with many employees.
     
  3. Flex-Deck

    Flex-Deck LawnSite Silver Member
    Posts: 2,846

    I am solo - wife helps a bit - would never want to put up with crews, headaches, people tearing up my equipment. Thanks
     
  4. packerbacker

    packerbacker LawnSite Bronze Member
    Posts: 1,433




    Flex, how many accounts do you have and whats the average size of them?
     
  5. 021462

    021462 LawnSite Member
    Posts: 97

    I also am mostly solo. I have a part time helper for about 20 hours a week and on big jobs I pick up a few others just for that job. I have about 50 to 55 accounts at this time. I have a friend that has twice as many accounts and he keeps two guys on the payroll year round. He make 3 times as much money as I do but, when it's all said and done we have the same amount of money left over at the end of each month. I don't know if growing the business past a certain point is the answer or not. Sometimes you feel like all you are doing is touch the money for a breif moment and then handing it over to someone else. I guess the question is "how much headache do you want"?
     
  6. grass_cuttin_fool

    grass_cuttin_fool LawnSite Gold Member
    Posts: 3,503

    The headache part is what I was afraid of. Employees not showing up or maybe making a customer mad, abusing equipment. Atleast being solo, I dont have thoose problems. Plus being able to keep the employees in work year round, it would be hard to do because Im mainly a mow, trim, blow and go. I do offer hedge trimming, mulching and leaf removal but I just dont think I could keep a crew busy enough to keep them
    On the downside of being solo, if you get sick or down who does your work and where does the pay check come from?.
     
  7. Harleyboy52

    Harleyboy52 LawnSite Member
    Posts: 115


    55 is just a number!! I'll be 58 next week and this year will be my first full year. I work as a full time firefighter and work 24 on and 48 off so I'll be able to mow 4 days a week. I only have 7 accounts right now but hope to have about 35 by May. I bought good equipment so I'll have to make a go of it to be able to pay for my stuff. I know I haven't been out there in the 95 degree heat yet but I'm pretty tough. I have a lot of expensive hobbies so I have to work two jobs. Out of the 75 firefighters at my dept. there are about 30 LCO's. Wish me luck.
     
  8. rodfather

    rodfather LawnSite Fanatic
    Posts: 9,501

    My business gets bigger each year with a larger customer base and more employees...wouldn't have it any other way. Period
     
  9. I think there is a tweener point...meaning, in between small and large. That tweener point is a bad place to be, in any industry.

    Think about it: (please don't knock the example...it is just an example)

    one guy 50 accounts at 30 each....(for this example I'll use 40 mows each) 60k right?

    Lets assume your helper will cost you $500 per week with labor and labor burden...just assume, please don't knit pick these numbers. so that adds 10 to your costs per lawn.....meaning you only make 20 per lawn...remember this is very simplified...not taking anything else into account but the labor and it's burden!! :)


    Now before you added this guy you were mowing a total of 2000 times at 30 bucks each right?

    After you add the guy you are mowing a total of 75 accounts 40 times = 3000 mows...but you are only making 20 each because of labor burden.....same money correct? 60,000 dollars in net.

    Please remember this is fictional..but it is a numbers thing and it does play out correctly.

    Now, you have a helper, you aren't working as hard, yet you are on the jobs yourself and they are still getting done properly. And you aren't really getting as beat up as you once were...but you are still working the same hours probably.

    As you add accounts and employees and crews etc…..you make less per lawn, but you can do more lawns. There is a certain point in your growth where this makes sense…and not only that, you are building a BUSINESS instead of having a job. Yes there are more headaches…yes it sux to have employees and responsibility, all of these things are issues for sure, but so is your body.

    Lets say you are mowing lawns for 20 years….you still have 50 accounts..you are still making pretty good money, but now your body hurts. What do you think you will do? You can sell the business for peanuts and get a job…but you probably won’t make the same money and now you are working for someone after having 20 years of autonomy. Boy, I know I don’t want to do that. No way.

    If you had continued building a business over the course of these 20 years..and managed it properly..chances are you have a business that you would be able to sell. Or maybe you won’t have to, because by then you probably aren’t working in the field much, if at all.

    I have run into this same issue with my company in Arizona. Right now it isn’t really paying the bills because I downsized to concentrate on other things. Because of this, I need to make a decision. I either have to grow again to get out of the “tweener” zone, or I need to sell the company at a huge loss. I have grown quite accustomed to being out of the field…and I enjoy the office work, but I got lazy and let the company slide a bit. But at one time, I was making very good money and not doing any physical work. I know it works, I also know it is a PITA to operate a large company with 10-12 employees…but if I had kept it that way….I would have had something to sell.

    I am getting off track and I’m sorry. The bottom line is you have to make that choice. Smaller companies are more streamlined and can be profitable…but they have their limitations. I think the biggest limitation is time leverage. With employees you can leverage THEIR time and energies to make you money, without them, you are leveraging your own time…and while you have the time and energy to do the work yourself you can do quite well and have very few headaches. But as you grow older and get tired, that will change.

    Sorry for the ramble..but this is a bit of a sore spot with me…and being on both sides of the fence at one time…I feel like I have a bit of experience and knowledge in this area.



    Good luck to you whatever you decide.
     
  10. CharlieBingo

    CharlieBingo LawnSite Senior Member
    Posts: 400

    I'm talking about one crew (three or four guys). If run properly and charging properly can generate a lot of net profit. In my area any idiot can have two or three hundred lawns; just work cheap! I define success by how much I net not by my new truck or multiple crews.
     

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