Need help with a situation

Discussion in 'Business Operations' started by exmarkking, Nov 11, 2012.

  1. cpllawncare

    cpllawncare LawnSite Silver Member
    Posts: 2,659

    Exactly! it just seems to snowball on us very quick! I'm thinking of going to a three man crew!
     
  2. Chilehead

    Chilehead LawnSite Bronze Member
    Male, from Stockbridge, GA
    Posts: 1,921

    It sounds like you never wrote out a business plan. A business plan answers the questions, "What is my purpose? What are my goals? How am I going to achieve my goals? What steps do I take if hard times hit?" and the like. If everything is written down in a business plan, that takes the stress off of you because your plan serves as a go-to guide.
    Next, you need to KNOW with absolute CERTAINTY how much profit you pull from each client, and the profit margin for each. Anyone netting you single-digit profit margins should really be re-evaluated. Example: You have an $80.00 lawn, and a $40.00 lawn. The $80.00 lawn is 45 minutes away, and takes three man-hours to complete. The $40.00 lawn is 5 minutes away and takes 1/2 man hour to complete. The $40.00 lawn nets you a profit of $30.00, the $80.00 lawn, $15.00. Which one would you keep? The smart choice: the $40.00 lawn, because you could do 5-6 of them in the time it would take you to do one of the other type.
    If I were you, the Friday & Saturday after Thanksgiving (next week) would be spent putting together a business plan. Start with where you are at. List your assets and liabilities. Next, write down where you want to be next spring. Plan for it. Then, write down where you want to be one year from now. Plan for it. If you see that 10% of your clients account for 30% of your time (and yield very little profit margin), you may want to stop serving them, sell some things you don't use, and use the money to advertise to gain new replacement clientele.
    Several years ago, I was in the same shoes you are in now. I did what I am suggesting. I am glad that I did. By the way, I work the same market you do. Best wishes.
     
    Last edited: Nov 15, 2012
  3. exmarkking

    exmarkking LawnSite Bronze Member
    Posts: 1,012

    Thanks for the input. I never made a business plan. Your right, you have to plan for problems and for growth and I didn't do either. I just always thought I cut grass for a living, didn't really consider it a "business". But use me as an example, there is good money in this industry if you do it right. What area are you in?
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  4. Chilehead

    Chilehead LawnSite Bronze Member
    Male, from Stockbridge, GA
    Posts: 1,921

    We are based in Stockbridge, but service a 30-mile radius of Atlanta.
     
  5. Chilehead

    Chilehead LawnSite Bronze Member
    Male, from Stockbridge, GA
    Posts: 1,921

  6. exmarkking

    exmarkking LawnSite Bronze Member
    Posts: 1,012

    Excellent information. I think I'm just at a growing pain and need to re invent myself,goals,image and area of services. I was at a point where I was doing landscape projects and maintenance at the same time. Even though the landscape jobs paid good my heart just wasn't in it. Also I wasn't really setup for the different types of work. For instance there would be days where we would unload all the equip to go pick up plants and then when we finished that job we would have to run back and get the mowers to try and cut grass before the day was over. There was times when the landscape job took longer than expected and that would push back the maint schedule. It was a disaster. I'm setup for maint. I have all the equip, truck, software, pricing ect. So I think this winter ill change the logos, website, business cards ect to say only maint services. a very wealthy business man once told me to pick something and be the best at it. What happen was when I was younger and just starting out I would take on any job it came my way and I never changed my business idea and now it has caused problems. I don't think there is anything wrong with doing just maintenance. If I focus on building up the maint side of it and getting it to run smoothly I can always add a truck later on to pick up installs again. Do you see any problem with this?
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  7. Chilehead

    Chilehead LawnSite Bronze Member
    Male, from Stockbridge, GA
    Posts: 1,921

    No problem at all. It appears the wealthy man you reference is Jim Collins (author of several best-selling business books). His principle is called "the hedgehog principle". Yes, it is very effective. Find your niche, invest in perfecting it, and you'll shine like a supernova.:weightlifter:
     
  8. exmarkking

    exmarkking LawnSite Bronze Member
    Posts: 1,012

    thank you for the kind words. Would it be a problem if I pm you in the future if I had a question or idea? I think your very knowledgable
    Thanks
    Justin
    Posted via Mobile Device
     
  9. Chilehead

    Chilehead LawnSite Bronze Member
    Male, from Stockbridge, GA
    Posts: 1,921

    That's fine.:usflag:
     
  10. caleb

    caleb LawnSite Member
    Posts: 4

    I know exactly what you are talking about, and ran into that exact problem with a lawn service I was running. I felt like everything was out of control, and I didn't know what to do. I hired another crew and an office manager. It spiraled out of control. I had created full time jobs just trying to train the office manager on stuff I didn't even know how to do, and I was also trying to keep the crews busy, and customers happy. It was awful.

    I finally got back on track, but it wasn't easy. Here are a few of the things I did that might help:

    1. Started reading every business book I could get my hands on. It completely changed my life. I was blown away by how much I had missed out on by not purposefully learning everyday.
    2. Looked at all our customers to see who was losing us money, and raised their prices or dropped them. Also narrowed our services to only offer the things that made us money. That meant dropping one time cleanups. Very few people are willing to do stuff like this - but you absolutely have to if you want to survive.
    3. Changed our entire pricing structure and required credit cards on sign up. We then charged their cards each week - you wouldn't believe how much that helped our cash flow problem once we got enough customers switched to cover payroll.
    4. Wrote an operations manual that outlined how we did everything. This took a while, but was worth the effort. When I had written full instructions to run scheduling, book keeping, customer conversations, etc. I hired an office manager and handed her the manual, and spent a couple weeks full time training her. She has now trained every additional & replacement office hire.

    Just these few things changed our business. It took a ton of time and dedication, but it worked. Let me know if that helps at all.
     

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