Need to make some changes!!!!!!

Discussion in 'Christmas Trees & Seasonal' started by umpire, Aug 16, 2009.

  1. umpire

    umpire LawnSite Member
    Posts: 27

    First of all I just want to repeat what addictedtolandscaping said and that was a Big thank you to Dave,Turk Hokie,Hotrod and all the other vetrans that provide the new guys with advice and direction!! This will be my third year in this and to be honest it has been just okay for me. I have about 20 customers that are all residential that all use big bix lights! I do own the lights and use the same ones every year on their house and replace a light here and there or maybe a strand now and then because thats part of the deal that I replace whats needed every year.It doesnt hardly cost me anything because as you know big box lights are cheap! I would love to get out of the big box light bisiness and move over to the commercial lights but I really dont know how to do this or go about changing everything. Do i keep the customers that use big box lights as they are or tell them i am moving to commercial so you will have to buy new lights? I am sure I would loose some of them right there. Another thing is that I dont have all the cash to do things like get graphics on my truck or buy 100 yard signs and mail 5000 postcards. This is what I do have: I have magnets for my truck, I have nice red polo shirts with my company name embroided on front that I wear for doing bids, Last year I had a website that I designed through vista prints(wasnt the greatest) I have the design software, and all the equipment ladders etc.. Last year my wife made a couple of signs that actually looked great that I got a couple of calls on but never got the job with those also I have business cards. Most of my jobs have came from craigslist and none are less than 300 but I would say are no more than 500.I did get a 1000 job last yr on a subdivision clubhouse. Anyways does anybody have any answers on what I can do on a shoestring budget to make this a better business. In my situation should I just continue with Big Box lights until I have more cash to make myself look more profesional? I would like to know what the pros suggest!!!! Thanks
     
  2. David Gretzmier

    David Gretzmier LawnSite Gold Member
    Posts: 3,645

    I need more time to answer this properly, as I have to leave this morning. check in a few days and I will give you a plan. thanks, dave g
     
  3. hotrod1965

    hotrod1965 LawnSite Senior Member
    Posts: 582

    I know Dave will give you a great answer here on how to develop your business.

    But I will say that if you keep going along doing cheap jobs, that is the reputation you will earn. So it will be very hard for you to switch over to using high grade stuff and charging 2-3 times more.

    I would also say that you can't be afriad to go out and talk to people and businesses. It will only cost you your time and maybe some flier money.

    I will also add, that there will always be a market for guys who buy cheap lights and do lower end jobs. So if you can still make $100 per hour and your customers know what they are getting.... But most likely you are not making that per hour....



     
  4. David Gretzmier

    David Gretzmier LawnSite Gold Member
    Posts: 3,645

    OK, long answer-

    There was a gentleman who had about 300-400 clients here locally and was really arrogant about the size of his business. His average client, however, was exactly like yours. They paid around 3-500 bucks to get thier lights installed, taken down and stored every year. they paid double that the first year. I met him several times, and I laugh about how he talked way down to me about my "franchise" and how he was growing like gangbusters. He went out of business a few years ago because no one wanted to buy his business, and he obviously was not making much money at it, as he decided to become a real estate agent. He left all of his customers out to dry. further, his lights and bulbs were poor quality, and after bidding probably 150 of his previous customers over the years, I have discovered a very important fact. the person at the lower end does tend to ruin those customers forever in the marketplace. I have only converted one of his customers to my product and pricing. One other I am no longer using that product, but rather I substituted some used product I had from an old client.

    The unique position you are in is you can slowly bring some of your current customers up to profitable pricing. To me, profitable pricing is making enough in this business to capitalize growth and live.

    capitalize growth means you should be able every year to take the money you earn and buy assets for your business. Used trucks, graphics on vehicles, yellow pages, website and signs, storage racks, tools, ladders, puchasing property and buildings, building inventory, etc, all those items you should not have to borrow money for, with the exception perhaps of land/building. and even then you should make enough to comfortable pay the payment and utilities.

    Live means you should also be able to pay your own personal bills. The tough part is how you live. single folks can be very happy on 3-4 grand a month, but married folks like me with 4 kids need a bit more. Frustrating to me is the single guy can live better than me, and grow and make his business way better than me because, as a family guy, I drain alot more profits out of the business. but I digress.

    The easiest way to do your business plan is what I do. I start with how much personal money I need for 12 months. then I plan on my business capital outlays for growth for the next 12 months. Those two together, that is the profit I need to make. I go backwards on how much revenue, expenses will lead me to those numbers. I am realistic on expenses, often overestimating them. but my revenue is absolutely a very firm goal. After you do this a few years, you should have a pretty good feel for how many customers you'll keep and how many net customers you will gain, and at what average cost. To do this of course, you'll need to keep good records.

    Ok, When you are in a place in business where you have clients but they either don't pay profitably like you like, or you want to add only profitable higher end clients, it is kind of like tearing off a band aid. it hurts, but can be done with less pain if done quickly. The first step is painful-be really honest with yourself at how many hours each job is taking you, figure what you are making per hour, and rank the jobs. If you don't know, make a good guess.

    Then, the painful part. the worst ones ones that generate the least per hour must have a substantantial price increase to at least bring them to closer to the best. Yes, some will fire you. keep as many as you can, but concentrate on only taking on jobs that pay well. You must bring your current customers and all your new ones at least to the price ranges below.

    This has been discussed elsewhere, but remember this, If you are not making 6-7 bucks a linear foot first year/3-3.50 per foot on c-9s, and 25-35 bucks per 100 lights per year on mini-lights, you are not making enough to live and capitalize your business. I will not argue this point becasue I KNOW. Over the last 8 years, All of my competitors that charged less than that are out of business. I have 2 that charge around the same as me, they are still around. one other, an electrician, is quite higher.

    You need to get your current ciustomers to this price range soon, as they are telling thier friends about you NOW. and You need to raise your prices so they can pass on the fact that you are expensive.

    Many argue with me, so I put it this way, You CAN charge less and live, but not grow your business beyond you and a helper or two. you will not be able to afford to buy a storage facility, trucks, insurance, etc. most importantly , you will never be able to sell your business. no one want to buy a job. they want a business that supports itself.

    Many folks that rent jump right to the 3.50 or so per foot charge and the business owns the lights. I have to sell and make the pretty penny the first year to capitalize growth. Once I have reached the maximum customer level, which is when you add as many customers as you lose each year, then I will consider renting, as I will not have to add storage or trucks, or grow staff each year. that will happen for me around 350-450 customers or so.

    if you are on a shoestring budget, go to gotprint.com and order you 5000 postcards for around 200 bucks. hand deliver them 3 times to the nicest 1300 homes around you. I know you say you cannot afford 100 yard signs ( you are already feeling the "capitalize your business" thing), but if you go over to ebay.com you can find 50 of them for 4 bucks each shipped, one color 2 sided. It needs to say Christmas Lights Installed and your phone number. use a white back ground with a dark red letters. Put them out across the street from stop signs in nice neighborhood entrances, so folks see them as they leave the subdivision. When folks call, you only install what you sell, and you only sell the best. you measure thier property and you have very nice bid forms. you look nice and you are confident when you ask for 2-3 grand to decorate thier home with lights, wreaths and garland.

    craigslist is free for a reason. the folks trolling there want a low dollar deal. The employees that i have hired from there are the skateboard culture ( Although, when I hire the first good one from craigslist I will trumpet that here). I hate to make you face it, but prostitutes advertise thier services there. do you really expect high end clients from there? truck graphics, signs and postcards in the right location work. use them, and borrow 500 bucks if you have to from a brother to get you started getting good customers.

    Good luck and keep us posted.
     
    Last edited: Aug 23, 2009
  5. hotrod1965

    hotrod1965 LawnSite Senior Member
    Posts: 582

    1. I loved your craigslist description! I will say I have a couple good jobs from there, but most people that call/email are not interested. Last year, I think I had one add there because it was soo overwhelmed with low ballers that I wouldn't waste my time.

    2. I will also tell you to get a website. Just a single page $5/month Go Daddy special will do.
     
  6. Okiebug003

    Okiebug003 LawnSite Member
    Posts: 243

    That is great advice David. Not to high-jack this thread but when you use gotprint do you have them design the post-card for you or do you do it yourself. Thanks
     
  7. David Gretzmier

    David Gretzmier LawnSite Gold Member
    Posts: 3,645

    I design it myself. I usually use a postcard with a photo on front, and quotes from customers on back.
     
  8. umpire

    umpire LawnSite Member
    Posts: 27

    David, just want to say thanks for the advice.I will definately keep you posted on whats going on! Thanks again
     
  9. David Gretzmier

    David Gretzmier LawnSite Gold Member
    Posts: 3,645

    Thanks- remember you are at the visablility stage of business. you must be visable by postcards, signs, magnetic graphics, newspapers, etc. it takes over a decade to be at the credibility stage where your reputation will feed the phone ringing.
     
  10. TexasFire221

    TexasFire221 LawnSite Senior Member
    from Texas
    Posts: 479

    Dave, speaking of newspaper. Do you get good feedback on those ads. I am in a small town but thinking of just running the ad to get the name out. Our paper only goes out 8 times a month but thinnking of running it a couple times this month a couple times next and then maybe weekly there after.
     

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