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Sales People yes or no?

Discussion in 'Business Operations' started by Emu! Emu!, Apr 2, 2008.

  1. Emu! Emu!

    Emu! Emu! LawnSite Member
    Posts: 16

    I have a small Lawn Care Company in Maryland. We are licensed and offer fertilization/IPM and tree & shrub spraying. I handle the book keeping, marketing, and some production. I have a partner who does sales/advertising part time (about 20 hrs a week), an office manager and 1 lawn technician. My question is how important is it to have a full time sales staff? How should I pay them? Is there a ratio of how many sales people I should have to how many technicians/office staff members I have? I have been trying to grow my business for 3 years and seem to be treading water at about 200 clients for the last year and a half. I spend about 25k/yr in marketing via flyers, phone books and direct mail. Any input would be much appreciated. Thanks!
  2. YoungGun

    YoungGun LawnSite Member
    Posts: 103

    I dotn think full time would be productive
    should be part time 2-3 days a week or 2 full weeks out of the month!

    GSPHUNTER LawnSite Senior Member
    Posts: 310

    Sales people should be paid based on performance. If they are producing new business they get paid.

    Also, this is just an observation, but if you are spending 25k/year on physical advertisments and then paying a sales person part, it seems you should be getting excellent responses and not just treading water at 200 clients. By treading water, I'm guessing that you mean you have hit a plateau that you can't get over at 200.

    Good Luck.
  4. big acres

    big acres LawnSite Member
    Posts: 182

    Ditto. That's alot of advertising dollars. I have a hard time believing you cannot increase your accounts with part-time sales staff and that kind of money.... unless..... your qaulity does not get you repeat biz and you have to replace a large number of accounts each year. No offense, but you could hire a marketing service (like pizza places do) to sell door to door with some kind of coupon. I think they get under $50 per customer, but $25k would by alot of those.
  5. pinto n mwr

    pinto n mwr LawnSite Senior Member
    from gr8, mn
    Posts: 422

    I will guess that the 200 accounts are only fert/weeds...

    200 customers and spending 25k.year on advertising and you're treading water. Don't take this the wrong way but do you know what your are doing?

    I could build 200 customers in a couple of years without spending a dime, and when I reach that 200 I still would not have to spend a dime because most of my new work would be from referrals in the areas that I service.

    You have a partner in business, an office manager, yourself, and 1 technician, and 200 accounts? Something does not add up.

    I do not know your area but in my location, 200 accounts is for ONE person only and that would be part time only and involves everything needed to run the business.
  6. Turfdoctor1

    Turfdoctor1 LawnSite Senior Member
    Posts: 705

    i completely agree. wow. 1st year full time for me, and i don't expect to even hire an office person until I have 400 accounts. I am at 200 by myself right now, and hope to scrape up 30K in profit this year, without paying a dime to anyone else and spending 3K in marketing!

    something is not adding up. you must have some financial backing, i guess. bad investment.
  7. J Hisch

    J Hisch LawnSite Senior Member
    Posts: 952

    200 hundred accounts maybe all are not residental, but large commercial properties becasue if not and they are mostly residental then yes I agree something isnt adding up. 200 residental accounts might generate the 45k to 75k range, "Where's the Beef?"
  8. pinto n mwr

    pinto n mwr LawnSite Senior Member
    from gr8, mn
    Posts: 422

    i agree also with the commercial vs residential.

    right now i have less than 150 accounts but do sites from 2k to 30 acres. It is a full time job for ONE.

    Here's an idea, maybe his prices are high and ALL of us are the lowballers!!!
  9. B & B Yardscape

    B & B Yardscape LawnSite Member
    Posts: 131

    We are all making a lot of assumptions about his business. Because he did not give us enough info.

    I have 4 accounts and do 60 k from them just for mowing.

    He said: I handle the book keeping, marketing, and some production. I have a partner who does sales/advertising part time (about 20 hrs a week), an office manager and 1 lawn technician.

    If you handle the book keeping, what does the office manager do? Can't be phone calls if you aren't getting the work. If it is phone calls, you should talk to them about how they handle calls.

    If you handle the marketing, what does the partner do?
    If you handle some production, what does the 1 technician do?

    Too many Generals and not enough soliders IMO.

    How big is your town?
    How many companies like yours are in the town?
    What is your gross? Because 25k on ads is alot of money. Are you getting leads from the ads? If not, you need to figure out what makes you money and what doesn't and drop the doesn't.

    I have a minor league hockey team in my town that I love to go watch. They have a billboard that costs $15k to put an ad on. If I did it, it would not produce me any results, so I'm not going to do it. But my ad budget would be 15k higher. Do you have something like that?

    Enough questions. He needs to respond so we can help him figure this out.
  10. Emu! Emu!

    Emu! Emu! LawnSite Member
    Posts: 16

    Okay, Sorry I didn't give enough info up front. Here is some more.

    My gross last year was $216k with about 220 accounts (99% residential ranging in size from 2k to 5 acres).

    I provide fertilization, weed control & aeration/seeding services. I also do some tree & shrub work but I am considering cutting that out as there doesn’t seem to be that much demand from my client base. (about 2 days worth of work a month)

    I service 5 counties with a 1 hr radius from my office. My immediate area (20 mile radius) is rural. Big lawns of 3+ acres. The surrounding counties are more densely populated.

    There is a lot of competition in my service area. About 8 licensed companies including TGCL, Scotts, Lawn DR. Weed Man, Natural Lawns, plus 3 smaller companies ranging from 1000-3000 accounts each.

    Up until this year my customer retention rate was pretty good 90-95%. However, this year I had more cancels then my last 3 years combined. I always ask my customers why they cancel and most of the time it is because they are moving. I live in a very transient area.

    I do not seem to get a lot of referrals. Maybe 10 or so a year. I do have an incentive program where I give a $40 account credit to any customer who refers a neighbor.

    I always send a short survey in a self addressed stamped envelope to any estimates that I do not sell. Price is rarely an issue. Also from talking to prospective clients, and the occasional piece of my competitors’ advertising; my prices seem to be pretty competitive. I also have a price match guarantee.

    My office manager deals with existing customers, prints work orders, schedules production, pays some of the smaller bills, schedules estimates, answers the phone. I should also clarify that she is part time 20 hrs a week. Sorry for not mentioning that before.

    My partner’s time is spent doing sales calls/estimates. She also does follow up phone calls. When she is not running estimates she is passing out flyers. These flyers have a per service price customized for each house so this is very time consuming. However, this is my best source of new work.

    I do my tree and shrub work and pick up the slack when my tech falls behind due to weather. My tech works 8 hrs/day 4-5days a week. 45mins – 1hr a day is spent at the office for paper work and equipment maintenance.

    I really appreciate all of your input. Thanks!

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