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Discussion in 'Lawn Mowing' started by jamesday, Aug 17, 2002.

  1. jamesday

    jamesday LawnSite Member
    from MS
    Posts: 47

    Being new to this forum and the industry...forgive me if I cross the line on this...but I have just one question:

    How did any of you figure out what a piece of property, any property, is worth for contract work? I am going to start my company next spring but I'm interested in gaining contracts and picking up commercial clients now and throughout the winter. My only problem is I have no idea where to begin. I see apartment complexes around town that are in horrible shape and other commercial buildings that could use a new maintenance provider as well. I'm the type of person to walk right in and demand to know who is in charge of landscape maintenance...but at that very point I stop because I have no idea what I or my company would be worth??

    Can anyone of you at least point me in the right direction? When I started my current business I shot myself in the foot many years because I didn't realize what the going rate was...I'm determined not to make the same mistake.

    Thanks,

    James Day
    james@cubla.com
     
  2. 65hoss

    65hoss LawnSite Fanatic
    Posts: 6,360

    Without having any equipment, insurance, licenses, customers, etc its real hard to figure your expenses. But that is where you need to start. You need to know what it will cost you to be on a property.

    Also, not having the experience of telling how long a property will take you is a problem also. You would probably be better off starting next season or even this one with residentials to get some data and experience. Then go for the comm'l properties.
     
  3. jamesday

    jamesday LawnSite Member
    from MS
    Posts: 47

    Well I do already own 2 Scags for my house on 6 acres so I'm used to maintenance, repairs and overall cost of running the Scags. I have 2 72" older 3 wheel riders. They're too large to use for business but I am familiar with them.

    With my current company I'm used to insurance, taxes, payroll and other "costs of doing business" so hopefully I'm not walking in completely blind. I have several buddies that own various comm buildings and I'm meeting with some next week to discuss what they currently pay for their contracts.

    Does everyone agree that residential is the way to start?
     
  4. SLS

    SLS LawnSite Bronze Member
    from Mars
    Posts: 1,540

    Hey James!

    I hope you got my email.

    As to your question posted above:

    For me, residential is the ONLY way to go. That's just me though. :)

    Practically every post I've read here about commercial contracted work has involved heartache, fustration, anger, loss of dough, or loss of the contract to a lowballer. Just my honest observation.

    On the other hand, residentials have been nothing but SWEET for me. Easy to do, fast to pay, quick to refer you other friends and neighbors...and above all they tend to be very LOYAL to you provided that you treat them right. In 3 years (full time) I have not lost a single account to the flood of lowballers that pop up in my area every spring...not one! And I'm not the cheapest guy around here either......

    Seems that I've read a lot of threads where guys got tossed from commercials because the 'corporate bean counters' go for that $500 less offered by the upstart. In other words...NO LOYALTY...except to their 'bottom line'.

    Service 4 or 5 big commercials and lose a couple of them...BIG LOSS for you! :cry:

    Service 40 or 50 nice residentials and lose a couple of them...NO BIG DEAL! :D

    Like I said, this is just what works for me. Bear in mind too that I am a solo operator who lives smack dab in the middle of thousands of upper-middle class residentials. My fartherest account is 15 minutes from my home. And thats almost 40 accounts....all cherrypicked. :)

    Again, good luck James!
     
  5. TurfGuyTX

    TurfGuyTX LawnSite Senior Member
    from DFW
    Posts: 648

    Hey James, welcome. I don't think residential is all sweet necessarily. We do both residential and commercial and I'll likely have mostly commercial when I can get there. I don't think there is an easy answer for your questions. If you can get some accurate numbers from your friends on what the competiton is charging, that'll help. It doesn't guarantee that they are making money though. I wish you luck.
     
  6. jamesday

    jamesday LawnSite Member
    from MS
    Posts: 47

    I appreciate all who replied regarding my questions.

    Thanks,

    James
     
  7. Scag48

    Scag48 LawnSite Fanatic
    Posts: 6,067

    The thing that I have noticed with commercial properties is that they aren't as picky. At least the ones that I have aren't. I mean, they want a good job, and I respect that, but they don't want things done in a really particular manner. I have a couple customers that are picky and it takes alot to please them, but we are in the service business and have to tailor to that, which is fine. But with commerical props. they notice don't notice detail. I mow at a condo complex that my mom manages (I got the bid from the inside, isn't it great :D ) They put those retaining wall blocks that you can buy at like Home Depot or somewhere like that and put them right next the lawn. No border around them and the bottom of the blocks is sitting right on the ground next to the lawn. Well, since the blocks are kind of a convex shape and have a depressed inside when put together, grass grows up in there and is impossible to trim. They have 3 full time maintenance men that just to the room maintenance and things of that matter, but do some of the gardening. I only do the lawn, nothing else. I've told my mom about this but she doesn't seem to care. See what I mean? They want a good job, but aren't too picky. Sorry for the tangent. Another thing about commercial is that they want to get a good deal, and since they aren't real picky, they'll settle for cheap. I bid the condo job $5 higher a week than the competition. She told me that was too high and I did bid a little high, thinking that I would get it because of her being there. Never take advantage of family or friends. IT DOESN'T WORK! So I settled for the price of the competition, which wasn't a bad bid at all, so I was happy. I'd take commercial over res. in most circumstances because of that reason, but dont' let them sucker you into a low price! And do a good job! LOL. I hope that helps you a little. Just sharing my .02
     
  8. jamesday

    jamesday LawnSite Member
    from MS
    Posts: 47

    I appreciate your 2 cents..for sure. I've been in the commercial service industry for many years and I understand everything you said. I try very hard to make everything perfect when in most cases the companies could care less. This doesn't mean however, that I will ever stop caring. That is what sets us apart in life.

    After listening and reading and talking with friends that own buildings I think commercial can be very lucrative when approached correctly and honestly. As long as everyone knows what to expect I think you'll be ok.

    Just my 2 cents.

    So if you don't mind my asking, what was the total Condo job worth a month?

    Thanks again...
     
  9. Scag48

    Scag48 LawnSite Fanatic
    Posts: 6,067

    It's only $180 a month, not very much, but it's good money for me. I make about $40 an hour there, which is pretty good considering the way the economy has been here. I figure If I can make $35-$40 an hour running my equipment that isn't bad for me, since I'm only 16 ;)
     
  10. jamesday

    jamesday LawnSite Member
    from MS
    Posts: 47

    I'd say it is excellent. To be 16 and dealing with equipment, repairs, cost of operating and all that I think you're doing great.
     

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