Employees a problem? I may have a solution. Feed back urgent!!!

Discussion in 'Starting a Lawn Care Business' started by Pittsburgh Stone83, Dec 25, 2012.

  1. larryinalabama

    larryinalabama LawnSite Fanatic
    Messages: 19,638

    Theres 14 to 16 yearolds on here all the time, sometimes I even learn from them.

    Reality is for someone to pay employees 50k per year they would have to be able to produce 150k to 200k per year, And with taxes going up on 250K earners that number will likley go up.

    For me solo is the only way to go.
  2. TPendagast

    TPendagast LawnSite Fanatic
    Messages: 11,088

    7a-6p 4 days a week? That's 44 hours a week. That's not 57% of the week.

    75% of the year? You mean YOU have YEAR Round work? SERIOUSLY? if you were going to to have someone on for a FULL year you would have to pay more. Which means PAYING 25% more. Most people lay off almost all their staff.

    U/I is something you have to pay ANYway, you DONT have a choice. This is a seasonal business and your rating, depending on the size of your business is ALREADY maxed. So it doesn't cost you anymore, because you ALREADY lay guys off.

    WHERE do you get that 27k is the average income? Just make that up did you?
    IF that's the average you are paying LEAD men? No wonder you can't find good help.

    92% of the household income? Yes. that's how it works. You state 27k is supposedly some magical average, so if my wife worked for you too, we'd be at this "average" household income. so your plan is to hire someone who is not the main provider for his family? Who are you hiring retirees and college kids?

    Your numbers 'you think' you should be paying are NO where NEAR what the numbers for a crew lead are at any decent sized, reputable company.
    Tru Green, Chapel Valley Landscape, Ruperts, Brickman, Denisons....
    They are paying, and will pay with only a resume (not seeing you work for 3-5 years) 40-50k a year for a crew lead.

    THAT's the average wage for that position.

    Basically what I am hearing is A) you don't charge enough (seriously? you only charge $30 per hour?)
    B) You don't know the value of a crew lead ( do you REALLY want someone you will only pay 27k a year in charge of your jobs, equipment and running your men?)

    C) this is why anyone decent is going to be your competition.

    You say "I must be a super duper employee" Gee maybe I am, Did you miss the 22 years of experience?
    I worked for tru green during the acquisition days, I've run my own business for 7 years, consulted multiple other businesses for 5 years, and a multitude of other things.
    But Im not even talking about any of that, A decent guy with 10 years experience, whose resume checks out, and has photos of past work, with the clean background check/criminal and driving history who can run a crew of guys without supervision and complete the proper paper work, in a timely fashion is worth 40-50k per year easy.

    You're also missing the fact that even tho you are paying the crew lead 30/hr. His joes are getting the average wage. So THOSE are the guys making 18k-25k per year. (ranging from 11-18 depending on hours and OT)
    Most of the $$ you are making hourly is based on the joes. You pay the leader to LEAD, in your absence.
    Your not going to make Tons of money off him or her, you are making money because you are paying that person to do what YOU would otherwise do. So you can go do something else, like run your company, run another crew, sell work, whatever.

    If you insist on paying people what they cannot live on, you will always have transient people, who don't have good work ethic, wander in and out of your business, holding it down, keeping it back, spending more time redoing work, going back and fixing screw ups.

    You will never get a good guy to come work for you if you think he is going to wait YEARS working for you to get good pay, because HE has to show YOU how good he is.

    In most cases, a good foreman/Lead will show YOU a thing or two, because he is likely coming from a larger, more successful company, where is was likely treated poorly by management, screwed over on payroll or just tired of their bunk. Which leaves you one chance to snag him.

    IF he isn't that guy, his resume won't check out.

    a Lead man is going to have 5-10 years in his trade. How long have YOU been doing this work?
  3. TPendagast

    TPendagast LawnSite Fanatic
    Messages: 11,088

    A crew lead in the 40-50k range will manage somewhere between 3 and 6 employees on a job site (depending on what the job is, and ranging differently from job to job)

    But the standard 3 man crew, in a regular season, should be producing 200k to 250k, with a possibly best at 300k (better if your season is longer, like atlanta etc)

    So for starters, you would need to HAVE those sales. Most companies I see whining about not having good help are at the 600k-900k in sales mark. So that's usually not the issue.
    if you are at the 250k-300k sales you are still in the do-it-yourselfer mom and pop range.
    If you are trying to grow/expand and reach 600k, you are going to need the 40-50k guy. He could be like 36k ish at first and grow into the role as the sales built up. a good way to make that transition is through bonuses. Maybe his base pay is 27k and he gets another 10-15 when the work is completed on time and in budget.

    The major issue with that however, is I have never seen a company under 600k in gross sales make good on the bonus idea. Because the funds are mismanaged, no matter how good their crew lead is, no matter if his individual jobs made the money, the company always squanders it, or comes up with excuses not to pay it. Then they piss off their lead, who will eventually leave, and they go RIGHT back to having people they can't trust running their jobs.

    IF you can't justify the money for the employee, DON'T grow. Cap yourself at what you can handle. There is nothing wrong with being a mom and pop shop.
    Many people find a way to grow through family, brothers, sisters, kids etc.
    A multi generational family business can rake in the dough (if you have a dysfunctional family this probably won't work)

    You still have to have SOME employees tho.
    The best way to decide "what to pay your guys" is to sit down with them, send the time, to figure out, what does Jose need to make it through a year? How much does he NEED? Not how much does he want, so that new camaro will come into reality.

    Depending on your demographics, I think you will find GOOD help will need 14-15$/hr. In most areas where you landscape, this will translate into around 20k ish a year.
    That one employee will likely 'cost' you 26,000 per year.
    But he produces around 1500 hours of work for the season which you should be billing out at $45-$70.hr (depending on the nature of your business, and what work it is)
    So on the low end, his gross is a bit over $67,000, just in the labor you sold, not the material installed. Which would be separate.
    IF he has a crew mate, and a lead man the crew will cost you around 100k ish in payroll and bill out over 200k in labor. (plus materials installed)
    Last time I looked that's 50% gross margin.
    Your overhead calculations will dictate what your hourly rate actually is, everyone is slightly different depending on their company.
    But if you are into high end residential construction, and you have good sales and a good year that SAME crew can bill out at 337,500.00 for the year. But your overhead is likely going to be higher than the first example, so that doesn't exactly mean you make MORE money.

    Employees aren't the enemy. It's your overhead. your cost of doing business. Most guys in the business have NO idea what their true overhead is, and NO Idea how to control it. they panic because they don't have money, and have no idea where it is going, and they try to keep the employee payroll down to compensate for the mismanaged business, which is causing the issue of "what can't I find good guys", When you can find the guys, you are making the problem worse, by having them not show, have crappy efficiency and not even complete the work you DO have sold for the year.

    This all brings the company owner back the the point "I need better guys"

    What's the definition of insanity?

    Doing the same thing over and over and expecting different results.
  4. Will P.C.

    Will P.C. LawnSite Senior Member
    Messages: 966

    I think 38-50k is a very fair salary for a foreman. He is doing everything that you would have to spend time doing, but frees you up to grow even further.

    It really is a no brainer IMO. These people are the linchpins of your business.

    I know a foreman for a Atlanta based business that makes 50+k as well as they other perks like truck and benefits. I think he is responsible for 12 guys.

    It is similar to having another business as it can run itself.
  5. MasScape

    MasScape LawnSite Senior Member
    Messages: 258

    I completely disagree with people saying no point to a college degree in horticulture. I hold my degree in horticulture, landscape design and contracting. Now with years of experience and my degree, I feel better prepared to tackled any problem I run into and thankful I worked my butt off to put myself through school. There are things experience will not teach you. I am formally train in business management, landscape design, horticulture and spool much more. Also very rare with a top rated education that puts my resume over other with two to three times the experience. I highly encourage my men to pursue certifications, education, and etc. To discourage is stupid in opinion.
  6. Will P.C.

    Will P.C. LawnSite Senior Member
    Messages: 966

    I agree with you and am very big on education myself. I have spent about 7 years in college/graduate school.

    I think a degree from a place like Devry or Everest is just a waste. They hold almost no weight in the professional world. A 2 year degree from a community college is better than these places. Furthermore, if you are going to spend the money and time on a place like Devry, why not get it from a 'real' school instead?

    The problem with the OP is guys that pursue an education do not consider 8-10/hr to use a stick edger all day a great job.
  7. cpllawncare

    cpllawncare LawnSite Silver Member
    Messages: 2,659

    I agree, I would love to have a degree such as yours, I just wish there was a two year program around here that I could attend. I have a degree in electronics not doing me much good now though. Thought about a business degree probably not a bad idea. At 45 with a growing business it's a lot to take on college.
  8. TPendagast

    TPendagast LawnSite Fanatic
    Messages: 11,088

    "The Big guys" ARE paying those wages for leads.

    Wal-mart ALSO pays those wages for their 'leads'

    The problem you are having is trying to compete with walmarts low end labor and make them YOUR leads.

    Shift supervisors, dept managers etc are making between 32-45k a year (depending on store size and volume of sales) with a benefits package that wops anything a small landscape company could dream of digging up.

    27k a year is 13.50 an hour at walmart for a year round job for a guy who isn't supervising but isn't chasing shopping carts around the parking lot.

    Even Mcdonalds/Taco bell crew leads are pulling 36K year plus bennies. sure you don't start at that pay, But we aren't talking starters here we are talking CREW LEADS.

    Everyone how is going to pay 10-14/hr for part time labor is going to be swimming in the same mire of basically useless people who are constantly turning over from one job to another. Walmart/Taco Bell etc usually keep these people for 45-90 days and dump them (by then they know it's not going to work out) they pick them up during rush seasons (like christmas etc) for every 10 people they hire, they might keep one. If that person sticks around a while, they'll grab a 13.50 job like "lord of floor buffing" or "Candy Isle King".
    In a setting like Taco bell and McDonalds, in three years, if you can stand it that long you are pulling 36k with bennies and in middle management.
    Walmart etc depends, it is all based on need and who is in line ahead of you, Ive seen it happen inside a year, Ive seen it take 5.

    But trying to pay 27k with no bennies is not going to get you anyone better than Lord of Floor buffing, which is why you can't find good employees.

    I mean by all means, hire Lord of floor buffing, it's working oh so good right now isn't?

    Holding your breath, insisting "I won't pay that much" and B&%$ing you can't find good help, isn't going to work either.

    All the while the guy who is worth 40+ k is working for your competition or BECOMING your competition. Which drives those prices you think you can't raise, down even further.

    "The big guys" don't charge more because they are better or smarter than you, they charge more (and get it) because they are hiring (and paying for) better guys to do the work.
  9. TPendagast

    TPendagast LawnSite Fanatic
    Messages: 11,088

    You have a degree in hort? Your a business owner are you not?

    I've never seen a hort degree or something similar work out for a worker in a company, they either become designers/salesmen (something company owners want to pay for even less than a good foreman) or they become company owners (or at least try to).
  10. cpllawncare

    cpllawncare LawnSite Silver Member
    Messages: 2,659

    I get what your saying, I'm just not at that level yet, My one crew leader is getting a raise this year and as the season progresses and the business grows he'll continue to get raises just like last year. he gets a truck as well. He agreed to the small starting pay because he could see the business was growing and wanted to help it grow and grow along with it.

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