Grow or keep it small?

Trisao

LawnSite Member
Location
Iowa
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.
Ditto on the “good employees are hard to find” post. Finding people to stick around is a huge headache and even harder unless you gouge people on prices.

I would just say take as many as you can possibly do solo and stay there while raising prices until you have all good paying yards.

That way hiring someone is awesome and makes your season easier but at the same time they aren’t “required”.
 

GLC-TN

LawnSite Member
Location
Tennessee
I was where you are - had a decent paying job as a Registered Nurse working in ICU. My mowing business put me through college and continued to be a profitable side income. Two years ago I reached the point of throwing in the towel at the hospital and going full time into the green industry and running my business. Riding the lawn mower was a great relief on my days off from the stress of managing multiple sick patients for 12 hours straight who were constantly on the verge of "coding".

Also, i'm not single - I have a wife and daughter with a son on the way next month. I can say that so far I have not regretted my decision. Being able to devote myself full time to the industry was the ticket to more rapid growth. I am able to make enough money to be comfortable (not driving a Bently by any means :laugh:) - But I can support my family fine. Trust me, I could never find a job that offers a more flexible schedule than working in this industry.

All of the other things aren't too terrible. I got an isuzu NPR, and I have one full time employee and that has been fun. Sometimes a slight frustration, but overall a huge relief. I'm hoping to add another next year and step off the truck day to day so that I may expand my business offerings to other profitable avenues.

Since quitting my Nurse gig, i have been able to expand my mowing and landscaping. I now have a dump trailer and Dingo with a full line of attachments and even spend some of my time doing sub work for other landscapers in my area with my equipment. We will also be expanding into more serious aerating this fall. The sky is the limit!
 

GRANTSKI

LawnSite Silver Member
Location
Ct Shoreline
Just some quick math looks like you are averaging about $32 per man hour. Wayyyy to low. You can maybe function as a small op at those prices meaning you work in the field . You basically can’t get out of the field and still make profit at these prices. Maybe if you did all the estimating and payroll yourself you’d save some $ there ,, but then you end up working a bunch of un billable hours. $2000-2500 per 40 hour week from 1 employee is my goal before expanding. Contrary to popular belief it’s even more important that you make the more per man hour than the larger companies. This is because Larger companies tend to price lower and profit off volume. They have more room for error because even if one crew has a bad week … they still profit off the others. so Imo just don’t try to copy a huge business model & pricing if you plan on staying a smaller operation. And don’t underestimate how much customer communication/ billing / and babysitting employees is involved w 80 hours per week of mowing (1 crew).
 

bmc1025

LawnSite Senior Member
Location
Big Bone, KY
Just some quick math looks like you are averaging about $32 per man hour. Wayyyy to low. You can maybe function as a small op at those prices meaning you work in the field . You basically can’t get out of the field and still make profit at these prices. Maybe if you did all the estimating and payroll yourself you’d save some $ there ,, but then you end up working a bunch of un billable hours. $2000-2500 per 40 hour week from 1 employee is my goal before expanding. Contrary to popular belief it’s even more important that you make the more per man hour than the larger companies. This is because Larger companies tend to price lower and profit off volume. They have more room for error because even if one crew has a bad week … they still profit off the others. so Imo just don’t try to copy a huge business model & pricing if you plan on staying a smaller operation. And don’t underestimate how much customer communication/ billing / and babysitting employees is involved w 80 hours per week of mowing (1 crew).
Exactly, a good truck, a trailer full of equipment, insurance and and employee costs every bit of 32.00/HR. You can squeeze all the equity out of your paid for equipment for a few years but it may not end well.
 

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