The biggest misconception I'm seeing in some of the new startup guys recently is the scenario that goes like this:
1. You buy yourself a business by signing your name to pieces of paper called finance contracts. You don't have to have forgone consumption in the past to save first.
2. You get to have fun with things like shopping for mowers and other gear, which is of course paid for with pieces of paper promising part of your future revenues to a bank or finance company. You sacrifice nothing, still. Boy, this is cool. It's great to be the boss for a change.
3. More fun ensues with things like grandiose "marketing plans" and girlishly excited trips to pick out uniform colors and such, in which countless hours are spent pouring over crucial decisions such as whether or not to spring for the burgundy piping on the sleeves or not. You know, to look more "professional" than those idiots with the plainer shirts. Much more time is spent on picking out one's business card logo (see the movie "American Psycho") than learning basic accounting and how to estimate costs and do a basic cash flow statement. Needless to say, taking courses on how lawns grow and perhaps working a few part time shifts for a real lawn company to learn the ropes is out of the question, as that would be for losers who lack your entrepreneurial knack. Those are "minor details" in the "big picture".
4. Then the "real work" is expected to start. You head out in your new macho shiny fully financed pickup truck, attired in your natty Khakis and professional looking uniform shirt, to dazzle the populace with your sales presentation, planning on signing dozens of customers each day to long term contracts where they agree to pay you to not come when it rains and weekly even when you can't see the lawn or shrubs for all the snow. Because that's how pros do it. You're a pro, even though you have yet to even mow a lawn commercially in your life. It says so, right on your letterhead. You have, however, driven your new mower over your uncle's dormant lawn at least twice. And what idiot can't spread fertilizer, right? I mean it's right on the bag what to do! You should easily reach your goal of 500 accounts by the end of spring. Everyone needs lawn service, right? How hard could it be?
You put out 5,000 flyers knowing that at least half should be calling you shortly, I mean hey, who doesn't rush in and call the family around to look at a flyer when it arrives in the mail or on the door? Right? Who would chance missing the deal of a lifetime by tossing it out with the other stack of flyers that arrive daily?
You savor the thought that by winter you should be busy planning how to expand and franchise your operation as you sit by the fire opening checks from those on annual payment plans. You will then probably just turn the biz over to your employees and sit on the beach somewhere collecting royalties and cashing checks while your noble workers plug away by year three.
5. Holding your nose, you venture out on the first day of the growing season, to handle the first few accounts which you have managed to obtain. You don't yet have enough business to justify paying employees, so you bite the bullet and head out there yourself. You aren't too nervous about the work however as your initial customers are likely friends, relatives, and former co-workers. After your third lawn of the day, you retreat to your former favorite lunchtime haunt, Applebee's, for a long siesta, sore and tired, but relaxed in the assurance that soon you will be able to find plenty of cheap but highly motivated and experienced help at $7.60/hour as soon as your employment ad runs. You'd better, because you've made $85 so far today and you're really not in the mood to go out again, it's getting hot out. And this "edging" that they hire morons to do is harder than it looks. Your teeth are full of dirt. You've also got a very unprofessional looking sweat stain all over your stomach, back, and pits. And your smartphone needs charging. Someone might call.
6. Fast forward to September. Well, your last mower sold on ebay for 2/3 what you paid for it. It should have done better, since it barely had any hours on it! But since it's not a titled piece of machinery the bank is going to have to come after you personally for the deficiency and it was probably legal to sell it with a lien on it. Anyway, you were smart and did all this under a corporation, so maybe you aren't on the hook after all.
You can't get over how stupid consumers are. Why would they want a guy dumb enough to have been doing this for 10 years w/o getting huge when they could have had you and your perfect marketing plan? Do they realize they could have been having their lawn maintained by one of the biggest operations in the state 5 years from now? Who wouldn't want that? Everyone knows big companies give better service. And what's with those employees? Half of them never showed up! Ingrates, you'd think they had better things to do with their time. You can live like a king in a trailer park on what you paid them! It's not like they need health insurance, auto insurance, life insurance, disability insurance, or hey, even a smartphone like you! (those are for movers and shakers like us) Those customers expect you to get out there and mow their lawn AND do marketing all day?
You did the math based on what you learned here from lawnsite guys about prices and employee productivity! Hey, they don't drop the ramp for under $40, man! 2 employees equals 20 lawns a day at $40/lawn x 5 days a week x 52 weeks a year equals $208,000 of revenue per crew. You of course lay em off in the winter, pay cash, so payroll is just $36,000 year, and other expenses are $10,000. That's $162,000 in your pocket PER CREW PER YEAR!
What happened?
(the above is intended as satire and is not intended to leave anyone butt hurt or offended. It is understood that each example given can be individually defended as a legitimate business decision)
