YES or NO to large contract

Discussion in 'Business Operations' started by grass123, Oct 8, 2012.

  1. grass123

    grass123 LawnSite Member
    Posts: 18

    its is per inch. & its that we dont have enough money coming in during the fall to fund our snow start up.
     
  2. jrs.landscaping

    jrs.landscaping LawnSite Silver Member
    from Maine
    Posts: 2,716

    What do you have for startup costs other than ice melt?
     
  3. ANA Proscapes

    ANA Proscapes LawnSite Member
    from NH
    Posts: 68

    Start up costs would be salt, icemelt, equipment maintenance can be costly, and payroll. The biggest issue I see is that it's per inch. Your not getting paid till you work, then your waiting for the money to come in. You have to have money in the bank to do this. You could pay out $10,000 easy before you see a dime back. Maybe you should expand your landscape maintenance and fall lawn renovations. Aerating lawns can turn a good profit and you can do this yourself to save money. Set a target number that you need for your winter start up money and bank as much as you can.
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  4. nobagger

    nobagger LawnSite Gold Member
    from Pa
    Posts: 3,065

    It took me a couple seasons but Ive learned these big accounts just aren't worth it!
     
  5. muddywater

    muddywater LawnSite Bronze Member
    Posts: 1,813

    Can you buy your snow stuff in july at a discount to help offset the initial cost? Ideally can you save money and put it in the bank? If you had 50k in reserves it would take away some of the stress. If you had a backup truck, it might keep you from working till 2am and you could fix the truck when you have downtime and need something to do.

    I dont do snow, but i do big jobs. Backup equipment and trucks and money in the bank make for a stress free life. Now if i could just do something for my alllergies!
     
  6. jrs.landscaping

    jrs.landscaping LawnSite Silver Member
    from Maine
    Posts: 2,716

    How do you have maintenance and payroll when the wheels aren't turning and your guys aren't plowing? It also depends on the contract terms, payment after services, 30 day, 90 day? Too many unknowns to make a call whether the contract is worth it or not.
     
  7. Premier GreenScape

    Premier GreenScape LawnSite Member
    Posts: 33

    There is a reason you are the boss and not working for one. Do what makes sense and makes you happy.
     
  8. grass123

    grass123 LawnSite Member
    Posts: 18

    We have to service all the trucks, get all the plows on the trucks (i use same trucks during the landscape season then put plows on them for winter) when things break it needs to be fixed. I put out $$ for metal stakes to stake all properties, ice melt, parts for trucks & plows. I have to transport equipment and supplies to the location. When we are working during a storm Im filling up machines & trucks with gas ($$$) The customer paying is not a problem at all. They pay very quickly, its the debt I occur to start up for the season. While im getting ready for the snow I am paying 3 guys weekly payroll as they are still cutting grass, and doing landscaping. I think its just a problem that Im in a hole after a storm so when I do get paid it goes quickly to credit cards, bills, payroll (who worked the storm) any parts that I need etc.
     
  9. 32vld

    32vld LawnSite Gold Member
    Posts: 3,984

    The problem is you do not set aside the cash after the snow season ends for next years snow season.

    You gross $100,000 clear $20,000.

    Put $20,000 in a separate acount and you are good to go to start up next season.

    I don't do large scale snow removal so I don't know if clearing $20,000 from $100,000 is poor, good, great.

     

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