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Are you resisting growing your business?

Discussion in 'Lawn Mowing' started by JimLewis, Apr 14, 2006.

  1. JimLewis

    JimLewis LawnSite Fanatic
    Messages: 6,872

    For the past 2-3 years I've consistently been more busy than I could handle. Which I didn't think was a bad problem really. We always seemed to get way more calls than I could handle. Which, I figured, was a good problem to have. And for the past 2-3 years I've just returned the calls I had time to return and [unfortunately for the prospective customers] just let the rest go. I'd say last year I was probably only able to answer about 50-60% of the calls that were coming in. There just wasn't enough time in the day for me to do it all.

    At the height of last summer, with 15 employees, I was still the one doing all of the books, all of the banking, payroll, most of the bidding, overseeing jobs in progress, answering all the phones, answering emails, following up with clients, handling at least half of the complaints and call-backs, hiring, firing, fetching supplies, ordering supplies, doing all the marketing, etc. I was always running around like a chicken with my head cut off. Just obviously wearing way too many hats.

    My poor foreman was equally over-loaded. In retrospect I now see how much I was piling on him too. He was in charge of doing some small bidding, overseeing some jobs in progress, doing any and all sprinkler repair jobs that came in, picking up all the plants for the jobs we were doing, handling employee issues, handling the other half of the complaints and call-backs, etc. He was always busy as heck and overwhelmed too. Obvoiusly wearing too many hats.

    I was resistant to hire more help. And honestly, I didn't see how I could AFFORD to hire more help. There wasn't any more money in the company for a few more people. And I was resistant to delegating some of the things I had always done too.

    But that's where I was wrong! Here's a big lesson guys. For those of you who are growing your business, have several employees, several crews, etc. and are struggling with managing it all, pay attention here. This is good stuff...

    This winter I really thought hard about how I could make some changes. I was actually FORCED into thinking about it because I lost our company foreman (of 7 years) back in November. He got a very lucrative job in Texas in a whole other field. And he was at about the top of the ladder here. So there was no hard feelings with him leaving. But with him gone, I was forced to start thinking how I'd get by without him. I depended on him SO MUCH that I didn't know what I'd do. How could I possibly ever find a replacement for someone who knew every possible job in our company. He knew details on every single client. He knew exactly how I liked things done. I'd have to hire 3 people to replace what he was doing for me. And that couldn't be a good thing...Or so I thought....

    Meanwhile, as I looked back on last year, it was obvious that my business was really out of control. In a good way, not a bad way. It was just TOOOO busy. We were getting TOO many calls, turning down TOO much business, and organization was starting to suffer. I was demanding so much of myself, my foreman, and others that we were all stressed out and not getting everything that needed to be done, done. Because I was so overwhelmed doing office work, returning calls, scheduling, answering complaints, handling call-backs, etc. our install jobs were going slower. My crews were often out on jobsites waiting for things I was supposed to be bringing....or waiting for me to show them what to do next.

    Things had to change.

    But again, how could I afford to hire more help? That was the sticking point. There just wasn't enough money.

    So I started thinking....

    The answer was actually fairly obvious. I could only afford to hire more people if these people actually paid for themselves! If the work they were doing brought in enough or more money than it took to pay their wages, then I could afford to hire them. So with this new insight, my mind started to change from, "How can I afford to hire them?" to "What can I find for them to do that will make it so that the company earns so much more money that they pay for themselves?"

    First, it was obvious that we needed a full-time irrigation repair technician. We had more calls for irrigation repair last year than we could possibly handle. If we had a full-time guy doing JUST irrigation repair, I could make a LOT more money. So that was my first step. This was actually an easy decision because he pays for himself and then some! We charge $65 per man hour for irrigation repair work. That's fairly standard for this area and I've been successfully charging that rate for years now. To me, it seems a little high. But our customers don't seem to mind. Most don't even blink when we mention that rate. And we're also marking up materials too. So irrigation repair is very lucrative. We're making $65 per man hour plus mark-up but I am only paying the tech. $15 an hour (plus tax burden, etc.). Obviously a profitable deal. That was the idea, anyway. And it's worked out just as I planned. It's worked out beautifully this year so far.

    So with the new irrigation tech., he's bringing in enough $$ to pay for himself, one of the office staff, AND still have some left over for profit! So that allowed me to hire some office staff.

    Then I started thinking about the office staff more...... I starting thinking of how office staff could pay for themselves. Well, the first way is pretty obvious. By taking a load off my shoulders (answering phones, scheduling appointments, answering emails, handling complaints, etc.) that would allow ME to be more productive in areas where I really made a difference to the bottom line (e.g. giving big estimates). So that alone would almost pay for the office staff too.

    The second way they pay for themselves is by increasing our call-response rate. Like I explained before, I was not able to return about 40-50% of the calls we were getting in the past few years. So now with office staff, they are answering most calls that come in LIVE. (And returning messages within an hour usually) we've increased the percentage of calls we answer and return to virtually 100% now. That definitely helps the bottom line.

    Finally, they pay for themselves because they are also helping two other people be more productive. They are also scheduling for our irrigation tech. So all he has to be concerned with is picking up his schedule for the day and going to do his jobs. He's not wasting time calling customers, waiting for calls back, etc. He can focus solely on just working and making $$$. Same with our new maintenance "accounts manager". The office staff are scheduling for him as well. So that's making him more effective.

    After the office staff, the next person I hired was my new maintenance "accounts manager". The main idea for him was to have someone to oversee all of our maintenance crews, go over all of the properties we maintain with scrutiny, and also handle any compaints that came in from maintenance customers. But the problem was that these things don't really bring in any more money. I mean, in the long run they do because they increase customer retention, make people more happy, etc. But in the short run, this wasn't going to pay his paycheck. So I had to get more clever and think of a way this guy was going to pay for himself.

    I starting thinking that he could probably handle the work outlined above in about 20 hours each week. He didn't have to stop by ALL 160 customers' homes each week. If he just stopped by twenty or thirty of them each week that would work. And so then I could have him doing other things with the rest of his time. So I took him with me for a few days and trained him how to bid maintenance accounts. I also taught him how to bid small jobs like bark-mulch applications, aerating, de-thatching, over-seeding, small clean-ups, small pruning jobs, lawn repair jobs, etc. So now he's been keeping busy half of the week by bidding and landing us all sorts of small jobs - jobs I had been turning down in the past because we were so busy doing big installs and such. But these smaller jobs add up! For instance, just today, he did a small clean-up and bark-mulch job and brought me back a check for $750.00. Sure, we had about $100 in materials and dumping. But the remaining $650 more than pays for his wages for the week. And that's just with 1 day! He also gave 2 bids today, answered about 8 calls, got our maintenance crews off for the day, and more!

    By having this accounts manager handling these smaller jobs it has provided a way for him to pay for himself. He brings in more money each week than his payroll burden is. He bids the small jobs, does the work himself, invoices the customer, and collects the check. It's cool as hell. I just get a check and I never even stopped by the job. He handled the entire thing! He's also been landing us new maintenance accounts each week to, so that's increasing our revenues as well.

    The other nice thing is now I don't have to do hardly anything with my maintence business. It can now grow and do very well with almost no involvement from me anymore.

    So now I've delegated 80% of the stuff that me and my foreman used to do. All I have to do is just keep busy bidding of larger jobs, overseeing larger jobs, and doing basic hiring, firing, and banking. That's about it!

    Now, I've been doing this new arrangement for several months now and it's been going more smoothly than I ever imagine it could. It opened up a whole new world to me. Now that I am free'd up to do more bidding, and now that were able to respond to every call that comes in, we're landing more and more jobs - both big and small. Meanwhile, we have an irrigation tech. that is just doing a phenomenal job at his job and bringing in lots of $$ too.

    The end result - I have a LOT more money in the bank, less stress, and things are runnning more smoothly than they have in at least 5 years!
  2. JimLewis

    JimLewis LawnSite Fanatic
    Messages: 6,872

    And to think I was resisting all this time! I was resisting growing my business because I hadn't ever planned out how it would all work. I didn't think I had the money to hire more people. Once I started changing my line of thinking and making changes in the business, we've been blessed beyond belief.

    So, sorry for the super long post. I probably already lost 99% of you by this point. But I hope this helps someone. I can't believe how well this year is going and can hardly believe that I finally took that next step in growing our business. I had been wanting to do it for years. But I was resisting all that time. I wish I had known sooner how much smoother it would have been, I should have done all this 3 years ago.

    Hope this helps someone. :)
  3. MJLsLawnCareNmoreLLC

    MJLsLawnCareNmoreLLC LawnSite Senior Member
    Messages: 840

    Wow Jim, I have to say you have really caught my interest. I too feel that growing my business might not be possible due to funds. Your posts have really given me a whole new view point. This is a great post that all business owners should read, not just lawn care or landscaping related. Thanks for sharing your experiences!:clapping:
  4. Richard Martin

    Richard Martin LawnSite Fanatic
    Messages: 14,699

    JIm, this will be the first post I have ever printed from Lawnsite. While I am a solo and intend to stay that way I have a very good friend who can benefit from your writings. He is currently at 8 employees and is starting to feel "too many hats" syndrome and he is getting a little nervous. I'm going to give him a copy of your post and tell him to put it away until he thinks he can't handle his business by himself anymore.
  5. dtelawncare

    dtelawncare LawnSite Member
    Messages: 227

    I have to say, you really pulled out all the stops. I have to applaud you for what seems to be a very smooth running operation. I am only part time for now, but I plan on going full time after about a year. I Just hired one person, younger guy who has bounced from couple other LCO's in the area. He loves the work, does a good job, but they couldn't get him enough hours. I have been wanting to give him the go ahead and let him take off with it, but I've been afraid of funds not being there. After readung your post, I think he and I will have a very in depth conversation at the end of the day today.
    Ii have been working in management for over 4 years now and have learned input = ownership. If your worker feels like they are responsible for it working, they will try harder.

    thanks again for the insight.
  6. Tharrell

    Tharrell LawnSite Silver Member
    Messages: 2,967

    That was a very good post. As in any business, you can choose to micro manage or delegate. You can see the problems with micro management and it only gets worse as the business gets larger. Don't laugh but, delegation started with Moses in the desert. I hope you have success and prosper this coming season. Tony
  7. DLS1

    DLS1 LawnSite Bronze Member
    Messages: 1,619

    Can I get the cliff notes. Are you downsizing? :laugh:
  8. topsites

    topsites LawnSite Fanatic
    Messages: 21,653

    You're not charging the customers enough and you're paying your employees too much, that appears to be the problem in a nutshell.

    That's why you keep getting busier, it is why you're overloaded, and it is why you can't afford to hire anyone else.

    Try a $35 minimum and try paying your employees what the big guys pay, or around 7.50 / hour, and miracles really will happen.
    First, half your customer base will flee. Then, 90 percent of your employees will hightail it as well - There you go, now you can rebuild... You'll have enough work and some help, now it will come together the way it should've in the first place.
  9. PGA

    PGA LawnSite Senior Member
    Messages: 710

    Most posts that long I usually get about one paragraph into , get bored and move on to something else.

    This one though...I COULDNT stop reading:clapping: :clapping: :clapping:

    More then likely one of the best I have ever read here. Id like to take this time to nominate you for LS Member of the Year!
  10. EDEN77

    EDEN77 LawnSite Member
    Messages: 102

    That was a great post. It was clear and had a definite purpose. Almost as good were the responses. I like to see these types of posts without all the sniping and personal remarks that happen too often on this site. I've made myself keep to the landscaping/business side of Lawnsite and stay away from the personal opinion issues. I applaud the professionalism you guys showed here !

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