[MowinginEureka]

Ok, so I bought this business two years ago. I have stayed at about the same size, until this winter. I lost 20% of my clients, which is 10. Problem is, I have been losing my larger, more profitable clients over the last year as well. In turn, I have been acquiring smaller accounts. Also, all small landscape jobs (read: under 500$), have pretty much disappeared into thin air. I have lost 3 out of the 4 commercial accounts I had. When I lose work, its because someone moved, or they found a guy for cheaper, but no one ever lets me go because of the quality of my work. Most of my clientele/demographic is over 50, retired, and owns their own home.
I have a large business loan(2k a month), credit cards up the ying yang and a baby on the way. I get most of my business from word of mouth, people seeing my work, and my double-size phone book ad. My work is among the best in the county, my yards are almost all green, weed free, and trimmed. I charge a rate that is in the middle for my area, 37.50, an uninsured mow and blow guy charges 30 an hour, and the large guys here charge 50.00 an hour. I am fully insured and all that, have my spray license, but no contractors license(not doing large jobs). I had to let go my part timer and I am picking up the work load with one guy that is part to full time depending on the work load. I am getting exhausted working 10-14 hour days, sometimes 7 days a week. 90% of my money has come from maintenance, I spend 3-3.5 days a week mowing. I have been just scraping by to pay my monthly expenses, but I have been having to pay some bills with credit cards. They are NOT going down. I have amassed 16,000 dollars in credit card/line of credit bills to my business side. I have absolutely zero money saved for when I owe money on my taxes this year. I am still paying off my gas bills from a year ago's winter, 3k dollars in 4 months, my income hit the ground, and gas went through the roof. My draw is just over 2500$ a month and a lot of that goes to cover expenses that are partial business related (rent at my house(1275$), electricity, cell phone,etc..)I just do not know where to go but stay where I am. Can someone give me some advice?

 

[Kickin Your Grass]

Ok, so I bought this business two years ago. I have stayed at about the same size, until this winter. I lost 20% of my clients, which is 10. Problem is, I have been losing my larger, more profitable clients over the last year as well. In turn, I have been acquiring smaller accounts. Also, all small landscape jobs (read: under 500$), have pretty much disappeared into thin air. I have lost 3 out of the 4 commercial accounts I had. When I lose work, its because someone moved, or they found a guy for cheaper, but no one ever lets me go because of the quality of my work. Most of my clientele/demographic is over 50, retired, and owns their own home.
I have a large business loan(2k a month), credit cards up the ying yang and a baby on the way. I get most of my business from word of mouth, people seeing my work, and my double-size phone book ad. My work is among the best in the county, my yards are almost all green, weed free, and trimmed. I charge a rate that is in the middle for my area, 37.50, an uninsured mow and blow guy charges 30 an hour, and the large guys here charge 50.00 an hour. I am fully insured and all that, have my spray license, but no contractors license(not doing large jobs). I had to let go my part timer and I am picking up the work load with one guy that is part to full time depending on the work load. I am getting exhausted working 10-14 hour days, sometimes 7 days a week. 90% of my money has come from maintenance, I spend 3-3.5 days a week mowing. I have been just scraping by to pay my monthly expenses, but I have been having to pay some bills with credit cards. They are NOT going down. I have amassed 16,000 dollars in credit card/line of credit bills to my business side. I have absolutely zero money saved for when I owe money on my taxes this year. I am still paying off my gas bills from a year ago's winter, 3k dollars in 4 months, my income hit the ground, and gas went through the roof. My draw is just over 2500$ a month and a lot of that goes to cover expenses that are partial business related (rent at my house(1275$), electricity, cell phone,etc..)I just do not know where to go but stay where I am. Can someone give me some advice?

One major thing that I can see that you did wrong is by getting into debt. I have been there and done that and don't plan on going back! Don't buy it unless you have available cash to spend. I suggest you get into Dave Ramsey's Financial Peace University through a local organization in your community or online.

I think all business will go through some hard times. Everyone is going to lose customers at some point in time. Maybe your percentage is high right now and I would suggest getting to the heart of the problem. Are they leaving because someone comes by and offers them a lower price? Are they leaving because your quality lacks? Are they leaving because your not on time and don't do what your say your going to do? If you are not 100% sure why they are leaving, I would suggest sending the customers that have canceled a letter out. A letter saying that your sorry that they have canceled services and that you would like to know what went wrong so you can figure out how to better serve your customers in the future. Make it easy and send an addressed envelop with a stamp on it so they can return it at no cost to them.

 

[jc1]

I am not familar with your season as far as cuts per year etc. Are you saying that you cut 50 lawns a week in 3.5 days alone or with a helper? I think that you could cut the phone book ad as soon as possible to cut that expense. 50 accounts should be pretty easy for a one man show to take care of alone. Since its 40 now it should be even easier. I would cut your last employee so that you can save that payroll and associated costs. (WC fed, state taxes) I think focusing on all the small, less then $500 jobs probably has very little profit margin if you were using 2 guys with you to complete those tasks. Just assuming that you could service 40 lawns weekly at 37.50 each would barely cover your draw and loan payments if you worked alone. Having one or two employees would bring your expenses higher then your gross income and that pretty much puts you were you cant pay down the dept. Does your large add generate so many calls that you spend alot of time tryng to meet customers and estimate these $500 dollar jobs that have little profit?

 

[QualityLawnCare4u]

Mowing Eureka, I could have wrote this post word for word awhile back about me, actually I thought you had copied my old post:laugh: When I have some extra time today and can write a long reply will shoot you a PM.

 

[Mickhippy]

Wow, this is Gonna be good!

 

[LB1234]

what are you doing (advertising/marketing) to get the lost clients/new clients back? I wouldn't simply rely on the yellowpages ad to drum up business. You need to come up with a plan to right the ship. Start looking into every possible area to save costs...insurance (liability, workers comp, commercial auto), if possible reduce your payroll costs (lower salary, switch payroll companies), start selling unused or little used equipment and rent if you need it down the road. If fuel is killing you make sure everything is running at top efficiency....clean air filters, drive under 60mph, etc. If I take my truck down to 60 instead of 65-70 then I can get between another 1 to 1.5 mpg. May not seem like a lot but it will add up.

good luck:waving:

 

[SeedPro]

Some good advice already in this thread. But cut expenses, do the lawns yourself with no helper, and advertise with some fliers to regain the accounts you could not or did not retain. You will always lose some accounts and need to always be concerned about adding more to compensate and or grow.

 

[JDUtah]

Trying to find out what to change is a great step. In my opinion, when we feel like we are burning out it isn't because we are out of energy, it is because we don't know where to spend our energy and thus is just vanishes. As soon as we develope a plan of attack our energy returns. Instantly.

Having said that you need to develope a plan. Only you know your exact situation but I would suggest, like Kickin said, get on Dave Ramsey's program. It takes commitment and discipline but it is worth it in the end.

I don't know how vulnerable you want to get publically, but a detailed list of expenses and income would help you get better cashflow advice. But remember you get what you pay for.

Maybe the answer is working 2 more hours a day for a year, but at the end of the year you have no debt. Maybe it is selling all of your extra equipment and running on just what you need to. (like the equipe you need for the $500 jobs). Maybe it is letting go of your employee's. Maybe it is promoting them so you can get a job... Maybe... Maybe...

What you do NOT need to do is get into more debt. Do NOT use that credit card.

DO buy Dave Ramsay's book "The Total Money Makeover" and read it twice. Then start on baby step 1. If I were you I would buy it and start reading it today. Go to your local bookstore, they will have it. It may guide you to a path that empowers you. You can do it! You just have to do what you are doing here in this thread... figure out how. Good job!

 

[MowinginEureka]

It is not possible here this time of the year for me to run my business without an employee. We receive 36 inches of rain here annually, and most winter months we only get 2 days a week that its not raining. So, in order to get the lawns done in time, I have to have a helper. In the Spring to Fall, I work about 70hrs a week myself plus my guy will probably be full time. I cant do that anymore, that's not including the paperwork I have to do at home and phone calls etc... I have switched insurance companies last month, saved myself 1500 a year total. I do most of my own maintenance on my equipment, my truck gets about 8.6-9.3 mpg pulling my trailer. The speed limit from my house to most of my clients is a 50 zone, in CA you legally cant go over 55 with a trailer anyhow. Most of the debt was from starting the business. We had to go from an apt to a house. That was almost 3k in deposits. I had to buy a bench, grinder, air compressor, tools, random little things at sears , that was another 1000.00 to start. Then immediately after I bought my business that September, the economy just sank, especially with Winter. We were putting expenses on the line of credit, like rent, gas, etc...I bought my equipment only when pieces broke down to the point where it was not economical to fix them, and I did actually pay cash for my new lawn equipment. The phone book ad generates for me about 25-30 phone calls a year here, most of which I bid, I have about a 50% close ratio. When my clients cancel service, 99% of the time, they tell me in person. The only thing i ever hear is they have sold the house and moving, or they cant afford yard service anymore. My average cut is about 35 a week. I have about 10 larger accounts that generate 50 a cut, and one large account that generates 150 a cut. I do a let of trimming, but this time of the year, that doesn't generate much. I like your ideas, keep them coming if you can.

I like the idea of sending out anonymous little letters, self addressed, postage paid letters asking why they canceled service.
The fliers are a good idea, but not sure they would work here very well.

 

[MowinginEureka]

I have to get to work here, but I will type another short sentence or two. I saw the post about that book, I have seen a lot of books, but I am always afraid to buy one and waste money. I hear a lot of those are crocks. I will go give it a look over soon. Its supposed to be pouring rain here for the next two days at least. That will give me some time

 

[LawnBizCoach]

I am also a huge Dave Ramsey fan and always highly recommend his books. Your money will not be wasted.

With that said, it is not a book to help you run the day to day operations of your specific business, how to get more customers, etc.

I sent you a message as well...if I can help, let me know.

You can pull up and out of this and it will take more strategic things than driving slower. Looking for every place to cut costs is good but that only goes so far. You need to create and implement a plan to obtain more customers and generate more revenue and then these credit issues can be resolved......

 

[LB1234]

You need to come up with a plan to right the ship.

lawnbiz, I'm not suggesting driving slow will be the end all. I'm just saying everything adds up. Bottom line, like I said (see above) you need to come up with a plan for getting yourself out of this.

 

[SeedPro]

It is not possible here this time of the year for me to run my business without an employee. We receive 36 inches of rain here annually, and most winter months we only get 2 days a week that its not raining. So, in order to get the lawns done in time, I have to have a helper. In the Spring to Fall, I work about 70hrs a week myself plus my guy will probably be full time. I cant do that anymore, that's not including the paperwork I have to do at home and phone calls etc... I have switched insurance companies last month, saved myself 1500 a year total. I do most of my own maintenance on my equipment, my truck gets about 8.6-9.3 mpg pulling my trailer. The speed limit from my house to most of my clients is a 50 zone, in CA you legally cant go over 55 with a trailer anyhow. Most of the debt was from starting the business. We had to go from an apt to a house. That was almost 3k in deposits. I had to buy a bench, grinder, air compressor, tools, random little things at sears , that was another 1000.00 to start. Then immediately after I bought my business that September, the economy just sank, especially with Winter. We were putting expenses on the line of credit, like rent, gas, etc...I bought my equipment only when pieces broke down to the point where it was not economical to fix them, and I did actually pay cash for my new lawn equipment. The phone book ad generates for me about 25-30 phone calls a year here, most of which I bid, I have about a 50% close ratio. When my clients cancel service, 99% of the time, they tell me in person. The only thing i ever hear is they have sold the house and moving, or they cant afford yard service anymore. My average cut is about 35 a week. I have about 10 larger accounts that generate 50 a cut, and one large account that generates 150 a cut. I do a let of trimming, but this time of the year, that doesn't generate much. I like your ideas, keep them coming if you can.

I like the idea of sending out anonymous little letters, self addressed, postage paid letters asking why they canceled service.
The fliers are a good idea, but not sure they would work here very well.

Why would you want to waste time and money sending out postage paid envelopes asking the clients why they canceled after you already said they tell you in person and most often it's because they move, or want to do it themselves? Unless it's because of poor workmanship or bad business practices.....who cares why they cancel. Just move on and I can't believe you don't use fliers.

The phone book is a dead horse. I can't remember the last time I even saw a phone book let alone used one.

It's the internet now.

Get a small website cheap on godaddy and ****can that phone book ad, and pass out fliers on those days you cant mow because of the rain.

Fliers work. Period.

Early to bed early to rise. Advertise Advertise Advertise.

 

[starry night]

Eureka guy: As you can tell, we all would like to help you. Give us some clarifications. Being a journalism/english major, I was taught to "think clearly to write clearly." You sound too emotional to lay this out for us.

You said that 90% of your income is from maintenance. Is that separate from your mowing? Or is the mowing part of the maintenance?

As best as I could tell your mowing accounts earn you about $1700 a cut.
Are they all weekly?

You said a phone book ad generated 25-30 calls a year and you close half of them. Are these mowing, or trimming, or mulching, or new installs?

I don't think we understand why these 40 mowing jobs are taking 3 to 3 and half days if most of them are at $35 level. And how you are working 14 hours a day?

Good luck. I've been in business for 26 years and the last two seasons have been the biggest challenge business-wise that I have ever encountered.

 

[MowinginEureka]

In the spring to fall, when the days are long, I work 10-14 hours a day. If I wake up at 6:30, start loading up my equipment at 7 and be leaving by 7:30. I work until 9:00. I get home, spend 30 minutes to 1 hour sharpening blades, mixing 2 cycle, repairing equipment, cleaning out the mowers, etc...10 o clock I eat dinner with my wife, collapse into bed at 11. Do it all again the next day. Right now, with the short days, I work about 8-10 hours a day. I gross about 6500 a month right now without extras, like fertililizing, pruning, etc... All but one of my accounts are weekly, I have a large storage unit that I mow about once a month. I consider mowing, maintenance, my bread and butter. Anything up and beyond my 35 dollar a cut rate. I make about 9-11k a year doing fertillizing (3300$ in organic fertilizer). About 8k a year in pruning. This year I am set to make an extra 5-8k in spraying.

The 35 dollar level equals 1 hour of labor for me, 1/2 hour for two guys.I have very tight routes. My houses are usually no more than 1/4 mile from each other. Our average yard takes about 20-30 minutes with two people. I lose 30 minutes each day driving from my house to the city where my accounts are at and back. So if I work a 10 hour day, minus lunch(30 minutes), driving to town(30 minutes), 2 breaks (30 minutes)..thats 8.5 hours to work. If I spend 10 minutes driving, loading, and unloading between each account, and I mow 12 accounts, that is 2 hours. So I now have 6.5 hours to mow. Each yard on average takes 30 minutes, so 2 yards per hour x 6.5 hours is 13 yards. 13 yards times 3 days is 39 yards. That is pretty darn close to what it takes me. There are variables like phone calls, talking to customers, minor weeding and pruning at the site, and equipment breakdown. Also, my days can be hampered a lot due to the VERY rainy climate here.

The house I rent being 15 miles outside of town is not that big of a deal, its all highway, and my rent is 400 dollars a month lower than a similar house in the city, plus insurance is lower due to problems with theft.(my apartment and car were broken into twice in one year in town)

I did 109k gross last year. So...seems like average, mowing(maintenance) is about 75 percent of my business. I get NO new installs, no contractors license. I just received my spray license, so that will be an extra 5k a year easy. I already have a spray route. No, I have never done fliers, I can say I will not cancel my phone book ad, for the 140 dollars a month it costs me I get at LEAST double that back. So far, all of the business I have received from the phonebook ad has been for lawn maintenance (mowing).

I have thought of getting a website, but the market is very strange here. I am in the weed capitol of the world, I find there are two types of clientele, tweakers and old people. Tweakers want their yard mowed once a month(if even) and don't like my prices. Old people want high quality service, but are usually willing to pay for it. My target demographic is the older people, because here, that's the ideal group. They own their homes, they have money, they like it to look good. Everyone else lets their yards go to crap. I don't like to put my name on something that looks bad. The guys that are bigger than me here are about 4 other businesses. They focus on volume not quality. They do 100 accounts a month and up, but they are always usually brown...no sprinkler systems....no fertilizer...they use string trimmers to edge the sidewalks...etc...

So I will try to get a website, I have at least to friends who do that for a living. I can get a good one cheapish. I will try fliers or maybe door hangers. I will look at one of those books you were talking about.

 

[jc1]

In the spring to fall, when the days are long, I work 10-14 hours a day. If I wake up at 6:30, start loading up my equipment at 7 and be leaving by 7:30. I work until 9:00. I get home, spend 30 minutes to 1 hour sharpening blades, mixing 2 cycle, repairing equipment, cleaning out the mowers, etc...10 o clock I eat dinner with my wife, collapse into bed at 11. Do it all again the next day. Right now, with the short days, I work about 8-10 hours a day. I gross about 6500 a month right now without extras, like fertilizing, pruning, etc... All but one of my accounts are weekly, I have a large storage unit that I mow about once a month. I consider mowing, maintenance, my bread and butter. Anything up and beyond my 35 dollar a cut rate. I make about 9-11k a year doing fertilizing (3300$ in organic fertilizer). About 8k a year in pruning. This year I am set to make an extra 5-8k in spraying.

The 35 dollar level equals 1 hour of labor for me, 1/2 hour for two guys.I have very tight routes. My houses are usually no more than 1/4 mile from each other. Our average yard takes about 20-30 minutes with two people. I lose 30 minutes each day driving from my house to the city where my accounts are at and back. So if I work a 10 hour day, minus lunch(30 minutes), driving to town(30 minutes), 2 breaks (30 minutes)..thats 8.5 hours to work. If I spend 10 minutes driving, loading, and unloading between each account, and I mow 12 accounts, that is 2 hours. So I now have 6.5 hours to mow. Each yard on average takes 30 minutes, so 2 yards per hour x 6.5 hours is 13 yards. 13 yards times 3 days is 39 yards. That is pretty darn close to what it takes me. There are variables like phone calls, talking to customers, minor weeding and pruning at the site, and equipment breakdown. Also, my days can be hampered a lot due to the VERY rainy climate here.

The house I rent being 15 miles outside of town is not that big of a deal, its all highway, and my rent is 400 dollars a month lower than a similar house in the city, plus insurance is lower due to problems with theft.(my apartment and car were broken into twice in one year in town)

I did 109k gross last year. So...seems like average, mowing(maintenance) is about 75 percent of my business. I get NO new installs, no contractors license. I just received my spray license, so that will be an extra 5k a year easy. I already have a spray route. No, I have never done fliers, I can say I will not cancel my phone book ad, for the 140 dollars a month it costs me I get at LEAST double that back. So far, all of the business I have received from the phone book ad has been for lawn maintenance (mowing).

I have thought of getting a website, but the market is very strange here. I am in the weed capitol of the world, I find there are two types of clientele, tweakers and old people. Tweakers want their yard mowed once a month(if even) and don't like my prices. Old people want high quality service, but are usually willing to pay for it. My target demographic is the older people, because here, that's the ideal group. They own their homes, they have money, they like it to look good. Everyone else lets their yards go to crap. I don't like to put my name on something that looks bad. The guys that are bigger than me here are about 4 other businesses. They focus on volume not quality. They do 100 accounts a month and up, but they are always usually brown...no sprinkler systems....no fertilizer...they use string trimmers to edge the sidewalks...etc...

So I will try to get a website, I have at least to friends who do that for a living. I can get a good one cheapish. I will try fliers or maybe door hangers. I will look at one of those books you were talking about.

I would suggest reading your post here and looking at ways to increase your productivity. You say your accounts are 1/4 mile apart and it takes 10 minutes to load and get from one to another. thats 130 minutes of time you are payiing an employee for un productive time Thats like $22 dollars a day in payroll. Your phone book ad generates double its monthly expense $120 per month to generate $240? How many estimates are you again taking an employee to that you are paying to sit and wait while you try to sell a job that you make $250 on? Ditch the phone book ad take your free listing in it instead. Go make some flyers on your pc buy a pack of paper for a couple bucks and start putting them out on the neighbors houses where you already are. You are grossing $1600 a week it takes 40 hours to do with a employee, if your paying on the books with WC etc your payroll expense has to be near $450 . I bet you could complete your 40 lawns without an employee in slightly more time each week. Work solo you then dont need a full halfhour lunch and 2 breaks each day. You will save a great amount of money.

 

[kyajsl]

I agree that Dave Ramseys book is THE book for getting you out of the hole you are in, He lives in Nashville Tn and we listen to him on the radio and in person all the time, He is a christian and refuses to accept Credit Cards. You can also check out his website www.DaveRamsey.com . This book really wont be a waste of your money, but it takes a lot of commitment.
Here is my idea... STOP USING CREDIT CARDS :hammerhead: Cut back labor as much as possible, work 90 hours a week, dont have a social life, just work work work... Dont use your equipment or your truck unless you are going to make money. That is what it took to get me out of the hole I had dug myself in, and now for the first time in 4 years we have every bill paid on time! I dont know if its possible because of where you live, but finding a cheaper place to live and cutting every expense in the book (Tv, Cable, Extra cell phone, internet plans, texting plans, eating out, renting movies, Christmas gifts) be brutal, sell everything you absolutly do not need to survive or make money. This is what I did to get us out of this hole, make sure your wife knows the situation and is supporting you, When my wife needed maternity clothes she got her friends to share theirs instead of buying new, (she shares back with them) same thing with baby clothes, shop ebay, find cheaper baby gear off of craigslist. just work your butt off and dont spend money, its about the only get rich quick scheme that I know of! Good Luck!! God Bless :usflag:

 

[kyajsl]

Oh, and I should add, I have 3 kids under the age of 5, so I can understand your pain!

 

[LB1234]

i dunno bout anybody else...but I make money on laborers (i.e. payroll).

I don't understand everyone stating to lose your employees and go solo so you don't have to pay payroll. Makes no sense. Fact is, if you are charging the correct amount you should be making money on labor. The business isn't paying for it, the customers are!

 

[LawnBizCoach]

kyajsl

Thanks for sharing --very cool story---Dave Ramsey is the best I know at motivating us all to get out of and stay out of debt.