Grow or keep it small?

iumichael

LawnSite Member
Location
Bloomington, IN
Hi all,

Third season of mostly lawn maintenance here. Currently just my teenage nephew and I doing maybe 20 hours a week on average working as a 2 man crew (includes travel time between customers). Currently a sole proprietor business structure, insured, but just paying him cash and no payroll headaches. A year ago we were doing $1500-$2000/month in revenue and maybe 10-12 hours a week. This year $4k-$5k/month revenue. I've done zero advertising this year and increased prices and still seen sales jump nicely.

I currently have an office job at a university with decent pay and good benefits. I hate to leave it, but the potential for the business is looking better and better. Also, my day job is pretty dull.

I'm single, no kids, 42. I hate winters in Indiana and try to escape somewhere tropical for at least a month around January or February. This was originally just for a little extra money to sock away for retirement, or to supplement my income when I retire around 52 hopefully.

I see more mowing crews everywhere around here than ever, but I'm not having any trouble at all picking up customers without even advertising. So maybe the market isn't saturated here somehow. I'm probably a little on the cheap side ($35-$40 for .25 acres per mow, $60-$65 for .5 acre, a couple of 2 acre properties for $160 per mow). A split of about 50/50 on weekly vs. bi-weekly customers.

I always said I would keep this small and not hire employees. However, it's getting tempting. I don't think I'd leave my day job until I could make enough to replace my current salary and benefits, but don't want to start turning down good customers either.

I really don't have a good feel for insuring employees to drive company trucks. Is it a minor expense or major?

Also, is it common to lay people off in the winter? I get that unemployment insurance goes up when you have employees file, but that's just a cost of doing business in seasonal work? We don't do snow, and I have no desire to be here in the winters. The mowing season here is basically late March through late October, but things slow down some after August.

Basically, I feel like it's about as much as I can handle with the current structure of the business, but I don't feel like I'm quite big enough to hire a full time employee. Do I take the leap and wait for the business to catch up? I think I could afford around $15/hr with my current pricing, but not totally sure how much other payroll/insurance expenses would add to that $15/hr. Worker's comp for a single employee isn't cheap I don't think, but if spread over 3-4 employees is better. A payroll service for 1 employee probably would cost as much as 4 employees. Things like that are what I'm concerned about adding up expense-wise. But if I don't do something, this will just remain a hobby business. Any advice is appreciated whether it is encouragement or a reality check. Thanks!

Also to add - we added a Ferris Z2 52" earlier this spring. About 50 hours currently and fully paid for. Also have a Z1 36" that's a couple of years old, about 250 hours, still owe about $3500 on it but financed at 0% with 2 more years of payments. Older truck that's fully paid for. We're in decent shape financially at the moment so I could afford some mistakes for a little while but hoping to avoid too many costly ones.
 

grass4gas

LawnSite Bronze Member
Your biggest problem is going to be finding and getting functional employees that want to do this type of work. With free money flying into the hands of just about everyone right now, why would anyone want to do this or any other manual labor?

You're in a tough position. Staying small means you will be working a helluva lot more hours per week. Growing and getting bigger means you will have a helluva lot more headaches...pick your poison. But know that if you get it right, you will or should be in a much better position down the road in a few years. Get it wrong and...

Good luck with this venture but realize it will take you a few years most likely to match your salary while incurring the expenses in running a business. And make sure you put your nephew on as an employee. Yes, it will add around $3-4/ hr more to your payroll but keeps you legal and protects your business from the IRS and allows you to sleep better at night.

I am a solo operator so take my advice and think this through carefully
 

oqueoque

LawnSite Fanatic
Location
Jersey
Instead of growing big, grow fat. Keep it small and charge more replacing some existing low paying customers with new higher paying customers, if the existing are not willing to pay more. Every $1 you raise the price is net profit.

If you do want to hire, you can pay more and hopefully get good well paid employees, if you are very profitable.
 

DA Quality Lawn & YS

LawnSite Fanatic
Location
Rochester, MN
Agree with above DO NOT be in a rush to grow so much that you have to hire a part time or full time guy/gal. The employment game is a joke right now, and you don't want to be dealt a bad hand before you have to.
 

Mumblingboutmowers

LawnSite Senior Member
It sounds like you do good work if customers are finding you without advertising. The important thing to keep in mind here is that they are wanting "you" because you are good at what you do. They are seeking "you" not a $15 an hour employee that most likely won't give a damn about anything but a paycheck. Then that employee will quit or you will have to fire them, then start over again at square one. It sounds like you are doing well now, I would keep it the way it is. An employee is going to be approx 4 grand a month and tons of headaches and could even harm your business if they do half assed work.
 

Jeff@diyokc

LawnSite Senior Member
Location
Owasso, Oklahoma
All well written responses!

here’s mine: mowing is something anyone can do, and you wrote it yourself, “ lots of mowing crews….”. The cheap guys leave and are replaced with other cheap guys.

in addition, right now, if you have a payroll problem, you to hr/payroll to get it straight. What do you do when your counting on being paid, and you get stiffed? Th we e is legal recourse available, but it takes time, not helpful when you need to pay expenses.

Employees? Do a search and read the results, that’s your answer. Stay small and keep your job and enjoy the extra cash. As you gain experience, get licensed to spray, better margins.
 

GRANTSKI

LawnSite Silver Member
Location
Ct Shoreline
Lots of self defeating advice here regarding employees. We are at 8% unemployment... if you cant pull from the other 92% of able bodied workers then it’s clear there are bigger issues. I’ve talked to many potential and past helpers and the biggest hang up is it’s SEASONAL and perceived as unreliable. If you want employee focus on THEIR perspective and build a job that attracts and keeps good workers.
 

walkinonwater27

LawnSite Senior Member
Location
ct
It sounds like you have a great side hustle going and I applaud you for that. I would ask
You if that month vacation to the tropics is a paid vacation?
How much money are you making at the university?
There are some questions you should ask yourself before quitting your job.
can you replace that income mowing lawns?
How will you make money from November to March?

I wouldn’t say your ready to hire someone by any means, you would have to be working overtime mowing lawns to bring on a full timer or any profits your making now would be in your employees pocket and not yours. There’s nothing wrong with having a little walking around money doing this on the side and only mowing a certain amount of properties that you two can handle. It’s a nice escape from the office it sounds like but when mowing becomes your office it isn’t much of an escape.
 

brydan

LawnSite Member
Lots of good comments. I don't have much to add other than I have an indoor good paying, good benefit, day job as well and always get the itch this time of year to go back in business full time again. Similar reasons too, hate turning down work, remember the potential income, etc. On the other hand, I remember what it was like feeling tied down to the business 24-7. There's benefits to both ways.

All in all, after almost 28 yrs working in the green industry, I'm enjoying giving my body break and keeping it as side hustle. Most days I can't wait to get off work and head outside but when it was a full time gig I wasn't nearly as excited to head out into the heat all day every day :D

I don't use the extra cash as spending money anymore. It's investment money. Don't want to be working this hard forever so trying to make every dollar move the ball down the field
 

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