let's anylize this drought

Discussion in 'Lawn Mowing' started by bobbygedd, Sep 28, 2005.

  1. bobbygedd

    bobbygedd LawnSite Fanatic
    from NJ
    Posts: 10,178

    well, the owner and sponsers of the site won't like this, but here goes. the longer i'm in this business, i see, what a crappy business it is. when it was a tiny one man show, it was great, for extra money. when it was a 2 man show, it was great. but, as i try to grow, i see, just how crappy it is. you can't build a big client base, if you are strict on late payments, and on your policies. the fact is, the more clientelle you're exposed to, the more crap you are exposed to. you litterally have to give services away, work cheap, and let them pay when they want, then, you can build a large client base. but if you do this, you will eventually suffer from burnout. just try and enforce late fees,and late payment policies (cancelations, suspended service), every time a client is late, and you'll see them disapear. just try and charge for everything, like extra leaves on the lawn, debris pick up, toys/trash pick up, and you'll run into problems, and your base will never grow. and then of course, you get drought like we have had here. now, you have 2 employees, you took the time to train them, they are awesome, but you have to give them enough money per hour, and enough hrs, to keep them. now, a drought like this happens, how is it possible to keep these employees? where does the money come from to pay them? if the business is not generating enough to pay them, you must let them go. then, next year comes, and you start over with new employees, training period, can't keep up with the work, and on and on and on...it's a tailchase. there are lawns here, that litterally have gone 5 weeks with no cut, and still don't need it. these same lawns, were only cut maybe twice in july, and once in augest. thier 30 cut season is dwindling down to maybe 20, if that. that means mowing revenue is down by at least 33%. sure, we can take this time to do the "extras", but what good is that? the extras were supposed to be just that, EXTRAS!. so where does the dough come from to pay these people, and yourself? do u let them go? start loaning your personal money to the business, so u can make payroll? what if this happens 3 yrs in a row? my conclusion is this- the solo op can always get by, for awhile anyhow, but he can never make real money, and his exsistance term is limited to around maybe 50 yrs old. a small to medium op, say 80-100 lawns, can get by, but can never grow, unless they give things away, keep thier prices low, and allow thier clients to walk on them. then, a drought occurs, they lose thier help, and they need to downsize to a solo anyhow. a large business-100-500 clients can only be obtained by -not having strict policies, keeping prices low, handling constant turnover. but, the innevitable, is "burnout" or a nervous breakdown, heart attack, mad fit hitting everyone in sight with a shovel. my conclusion is this- i will keep my client base between 80-100 strong. make enough to pay the help, and draw whatever is left over for my own salary, it looks like $500-$700 will be it. meanwhile, i'll be an outsider looking in, while i persue my other business ventures
     
  2. sheshovel

    sheshovel LawnSite Fanatic
    Posts: 5,112

    I thought you were making a killing in renovations?
     
  3. bobbygedd

    bobbygedd LawnSite Fanatic
    from NJ
    Posts: 10,178

    can't even do that now, the damn earator won't even penetrate the ground. most people have completely lost interest in thier lawns at this point
     
  4. Nosmo

    Nosmo LawnSite Bronze Member
    Posts: 1,216

    Let's just take into consideration the lack of rain and leave
    the other problems alone for now.

    The reason for having an employee or employees is buying their labor and making a profit on it after their salaries are paid.

    For the Short Run an employer can expect to sometimes operate in the hole with the expectation things are going to get better. Normally droughts don't last forever but there are exceptions --- Dustbowl Days of Oklahoma.

    For the Long Run if conditions continue on the bad side a decision must be made as to how your business will survive. Most often the first thing which happens is the layoff of some employees.

    All the other problems associated with the customers such as slow pay and some who can't be satisfied even if you paid them for allowing you to mow :) are people problems . People problems are going to be part of your life as long as you remain in business.

    Nosmo
     
  5. fga

    fga LawnSite Silver Member
    Posts: 2,449

    good post. and a real accurate dipiction of this years season, with the drought up here.
    my one silver lining, my guy must have some low living costs, or standards. he'll call out atleat once or twice a week.. which really balences the work/pay. normally, this would kill my schedule, but under the drought conditions, some haven't been cut in weeks. so i get an extra day off...
    and my overhead is relatively low, so that keeps me afloat in times of not getting all of the usual cutting money.
    i've also had more time for trimming payup
     
  6. bobbygedd

    bobbygedd LawnSite Fanatic
    from NJ
    Posts: 10,178

    well nosmo, then, let us adress the employee problem. you are trying to build, you have employees, you get them trained where u want them, it's time to build further. the workload is cut by a third, you have to let one, or both go. you are now back to square one. you need good employees to build, you need a customer base to support these employees. your customer base diminishes (not permenantly, but conditions won't allow service to continue). now, in spring of 2006, your large customer base is back and ready for service, but your employees have moved on. so, you seek/hire/train new employees. let's face it, one quits, or is a slow learner, you can't keep up with the work, you lose clients, and worse yet you can't build.....and on and on and on.......this business is for people who can live on china mans wages. it's easy as hell to make, $5, 6, $700 a week, but try to make real money, and the sh!t will hit the fan
     
  7. bobbygedd

    bobbygedd LawnSite Fanatic
    from NJ
    Posts: 10,178

    yes adam, but things like trimming, mulch, etc are supposed to be extra, or, in addition to, the "base service" which is, the grasscutting. losing the base service causes a $$$$$ problem . personally, i am fine, cus we have other income. but strictly from a business point of view, an operation with 2 employees, has to be able to provide 3 salaries, mine, and the 2 employees. SOMEONE has to go without pay, should it be them? then i lose them. should it be me? then i can't pay my bills. it's a tailchase, a freakin tailchase. add the drought, and the late payers, and you don't have enough cash flow to support the operation. i know a guy, who has 600 clients. think he's doing well? he added late fees, and strictly enforced them. think it helped? nope. he's making a few bucks off late fees, but mostly is fighting a big turnover because of it. he's going nuts. the man is ready for a nervous breakdown.
     
  8. BryPaulD

    BryPaulD LawnSite Senior Member
    from MI
    Posts: 392

    maybe let them work and you do other stuff? Go sell it up, fall ferts, aerates, seeds, clean ups, new contracts, etc.
     
  9. lawnworker

    lawnworker LawnSite Senior Member
    Posts: 900

    Bobby, I am just a solo operator. If I was trying to grow, I would do a contract that guaranteed a set amount each month. You really have to be good at selling this type set up, cause basically you get paid when it is a drought. Many people will probably question this, but it is the only way a big business has any idea what revenues will be.
     
  10. bobbygedd

    bobbygedd LawnSite Fanatic
    from NJ
    Posts: 10,178

    well, thank you very much. i am the king of selling this agreement, but let's face it, what's right is right. i can get paid every now and then for missed services, but i can't justify being paid for 30 cuts, when only 17, 18, 20 were actually performed.
     

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