Commercial or not???

Discussion in 'Business Operations' started by Coumbe, Sep 11, 2002.

  1. eslawns

    eslawns LawnSite Senior Member
    Messages: 712

    IMO, here it depends on what type of client you market for. I want high end residential and small commercial properties. I go after the Res. because of the money, and have a niche with the small Comm. becuase none of the big outfits want to mess with a lot of them. They don't want to pay a crew to ride from place to place when they can stay at one place all day.

    Having these Comm. places also gives me a good 12 month income.
  2. GarPA

    GarPA LawnSite Silver Member
    from PA
    Messages: 2,585

    well heres a perspective from a guy in his first full time year....give me commercial anytime over res. But I choose my commercial accts carefully...b4 you ever do a cold call, look at the properties where the owners take pride, have seasonal color, are well maintained etc. These are people who will ask you to do more work than just mowing...and for me thats the the other things they want...thats where the better profit margins are. I have a number of commercial accts that are VERY profitable..and I have babied them to the point where when they want something done...they say "just do it"..send me thebill...but I worked damn hard to get this trust...I also find commercial accts to be far less headaches...and nobody standing ther talking my ears off...but on the flip side i will never bid a mall, or a chain of gas stations or large office complexes/industrial sies because at least in my limited experience then you run into what the guys said above...very low profit and high competition...mow/go/forlow$...if you pick and choose your commercials, you can do well...just my opinion
  3. brucec32

    brucec32 LawnSite Platinum Member
    Messages: 4,403

    I work alone because of the labor shortages and because it suits my temperament not to have to deal with all the employee hassles. From what I hear and what little commercial work I've done, here are my pros/cons of each

    1. Estimating: much easier for me on residential. Make a mistake on a huge commercial job and you can be in trouble. And though I have to give more estimates, they usually take about 5 minutes rather than hours of (unpaid) careful planning for a major commercial job. Frankly, I get a little nervous just doing big estate sized home lots. There is so much of this work that can't be estimated by formula, a job that looks like it takes 100 man hours a month could easily wind up taking 120 in reality. And there goes your profit...poof.

    2. Getting paid. Less risk of a big no-pay with residential work. And if I do get stiffed, it's mentally easier for me to deal with $100 than $5,000. I'd feel like shooting someone who ripped me off for that much. I figure I can always go buy and sell real estate or used BMW's if I want a higher risk but larger income.

    3. Getting the business: A simple ad for a few weeks in the local paper and referrals and it's easy with residentials. A low key presentation usually results in a customer. As long as I'm in the ballpark and offer the services they need, I almost always get the job. Making presentations and sales "pitches" to commercial properties is NOT what I got into this business for. I could do that for someone else and make more money. I did that in the past, and didn't enjoy it.

    4. The work. Commerical customers are by their nature "turnkey", in that they need you to do it all. This means the grunt labor as well as the mowing where the machines do the work. Working alone, this is not good, since I hate doing stoop labor like weeding, dirty work like mulching, strenuous work like pruning, and tedious work like flowers. It also just doesn't pay as well as mowing. NOBODY will pay you $60/hour to pull weeds or spread pinestraw, but they never balk at that amount for mowing their lawn. I'd rather just mow, and so residential customers who mostly just need that are my target customer. As long as I stay busy, I make more mowing than I ever could weeding or planting stuff. The grunt work only pays if you have low paid employees out there doing it, but the main reason I avoid it is that I hate the type of work it involves and can't find the type employees I need to do it reliably. Only about 15% of my income comes from non-mowing work.

    I also find that doing minor installations and seasonal color required as a "full service" operation can cause a lot of problems in terms of complaints (people are basically ignorant about their yards and will complain about things that are out of our control, as you know) and more customer communication is required. Again, not my favorite part of the job. I get worn down trying to educate people about even the most simple things like you have to water your lawn after seeding. I can only imagine what comes up during a drought when their flowers start wilting. I gave up doing fertilizer/weed control years ago because I was running around in circles trying to please people who never bothered to water their lawns and had poorly installed sod in the first place.

    I prefer to kick back and relax while I work. Mowing lawns is easy mentally and I can listen to the radio and daydream if I want. On commercial jobs, I assume that working in parking lots, dodging cars and kids in apartments, blowing off retail lots while cars pull in, etc. it's harder to get in a groove while I work. True story. I put a rock through a Veterinarian's window on my first commerical job years ago. A freak accident, but it still cost me a month's income from his property. String trimming and mowing around cars just makes me nervous. I also don't enjoy having to defend myself from every dork with a rock chip assuming I did it to his car just because I was mowing near it.

    5. Income: The negative of residential work the way I do it is that I don't have much income in the winter. I catch up on major shrub work, do a few gutters, etc, but generally I just enjoy the time off. But in a way, it's a big positive. I am able to get away from it and recharge my batteries. I also feel that by being able to offer 9 month service instead of 12, people are willing to pay a little more per-mow than if I was charging them year-round. The negative is that it's impossible to find responsible, legal, permanent long term employees with this setup. But, again, I'd go do something more lucrative if I wanted to be in management again.

    I realize that many will disagree, but I feel that hiring a bunch of low wage people for drudgery type work (you try spreading pinestraw 5 days a week, 10 hours a day), with zero advancement opportunity is just plain unappealing and unsatisfying. I prefer hiring people for jobs where they enjoy their work, can grow and learn, and you can actually enjoy being around them. But I suppose you gotta do what you gotta do to make a living.
  4. MOW ED

    MOW ED LawnSite Fanatic
    Messages: 5,028

    We run the "mom and pop" type lawn service and we service only 3 commercial properties, the majority of our work is residential. They are technically commercial but I must admit that I have some residentials that are bigger.

    There is a big difference in commercial properties. I perfer the small to medium sized commercial lawns. 5000 sq/ft to about an acre. That is economical for us to do. We can knock anything under an acre out in less than an hour (spring growth) or under 40 minutes in the slow summer growth. These are the hot properties. There are some negatives to these but not many. The obvious garbage on the lot, it comes from everywhere and you have to get the napkins and big stuff. The employees park over the grass line, that area doesn't get cut every week. The business pays but holds the first check until the second invoice comes out. No problem with me.

    Major commercial work is a completely different type of mowing. I have a friend that has 3 crews of 2 guys. You are talking about different equipment altogether when you are mowing 5 to 40 acre industrial complexes. The average mom and pop mowers don't even figure here. He has one account that takes 3 crews with 60 and 72's 8 hours to cut. He takes in big bucks for this. On top of that the crews drive 40 miles (one way)to cut this account.
    I cannot even think of competing on that level without a major commitment to personnel and equipment, not to mention that there are only a small amount of big commercial jobs to be had and an equally small amount of companies equipped to do them.

    The post above makes some very valid points. Like I said, the small to medium businesses work for us because that is what we are set up for. Anything is possible if you are committed to it but you have to know what you are getting into before you go for it. Good Luck.

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