Growing pains - Would love to learn from someone else's experience!

Discussion in 'Lawn Mowing' started by guitarman2420, May 4, 2011.

  1. guitarman2420

    guitarman2420 LawnSite Senior Member
    Male, from Midlothian, VA
    Messages: 617

    I've been in business @ 4 years. We've grown @ 40-50% every year. Revenue growth isn't my problem - expense control is. The problem is I'm making less and less money with every account I sign and every employee I add. I've estimated my overhead, which is 26%, I've shopped mulch prices, insurance, etc; but my labor is killing me! During Mar - June my labor is approaching 60% of what I bring in. It seems every day I have to make a choice - either keep my word regarding the things that are promised in the contract or try and cheat the client by not living up to the terms. Mulch is a good example - all the agreements say 3"; but none of my competitors install more than a 1/2"! I would love to hear from those of you who have been in the business a while and have grown their companies from one man operations to multiple crews and can relate some of the lessons they learned.

    I have @ 400k of revenue, 4 trucks, 4 trailers, 2 z-turns, 1 wright stand on, 2 walk behinds, the normal contingent of string trimmers, etc. @ 60 residentials & 8 commercial/townhouse communities, which results in @ 60/40 split. We work Monday - Friday 7-5 and try and use Saturdays for make up days when it rains. Myself, one operations manager, 2 crew leaders & 7 crew members
  2. ashgrove landscaping

    ashgrove landscaping LawnSite Gold Member
    Messages: 3,529

    Having employees will suck you dry plus all of the insurance!! You could cut your insurance down by getting rid of two trucks and two trailers. Seems a bit much. Change your configuration of trailers to make it work. It's easy to see why you not making more money with all those trucks and too many employees. 60 accounts and 8 townhouse communities can easily be done with two crews including yourself. Which means you having only 3 employees. If mowing is all your doing basically, and mulching I guess, I think you are way over staffed and probably paying them too much money with those fancy titles. Remember that less is MORE.
  3. guitarman2420

    guitarman2420 LawnSite Senior Member
    Male, from Midlothian, VA
    Messages: 617

    Two of the townhouse communities are large @ 150 units. It takes a 7 man crew 1 1/2 days to mow & trim & weed it. Also, my wife is a landscape designer - we bring in @ 120k in projects, such as plantings, etc.
  4. nobagger

    nobagger LawnSite Gold Member
    from Pa
    Messages: 3,065

    You have 400K in revenue off of 60 accounts? Are your town home communities multiple housing counting as 1? IDK, sounds like you might be heavy on the amount of employee's needed for 60 accounts. Again its tough to figure because one of your town home communities could take a full day to do with 2 crews. This is the problem when you run multiple crews and I'm fine running a small crew of 3. Do you or are you able to check on the crews during the day?, even if you were to be the boss and crack the whip a bit to speed them up, saving even a 1/2hr a day of labor between 7 guys is huge. That would add up to several thousand dollars at the end of the year.
  5. hackitdown

    hackitdown LawnSite Silver Member
    Messages: 2,649

    It sounds like you have 11 people working on your 60 residential accounts and the equivalent of 40 in commercial work if your 40/60 split is correct. I'm small, but I have 3 people (me and 2 workers) working on 50 residential, 1 commercial (17 accounts per guy working). You have 11 people working. That is one guy for every 9 customers. You are generating $36,000 per employee per year. Maybe you should be closer to $50K per.

    I mulch at 3 inches only on a new bed. If you are going over an old mulch job, 1 inch is fine. Especially if the customer wants it mulched yearly.
  6. nobagger

    nobagger LawnSite Gold Member
    from Pa
    Messages: 3,065

    I kind of thought that might be the case. Our 51 unit condo place is a bit of a PITA to mow, bottom half is all 21" work, one side is on a steep hill and all 50 yards x15ft wide on the upper half is all 21" work. 3 guys, mowed, bagged, trimmed, edged and blown off 3.5-4hrs tops. But again its tough to say without seeing your properties. It still sounds like labor is too high. Even after doing this large complex you still have 3.5 days to mow 60 some accounts. I would think you would be able to mow those accounts with 2-4 guys.
  7. topsites

    topsites LawnSite Fanatic
    Messages: 21,653

    I'd start cheating already, and not just the clients but try and balance it out, look here
    you're taking a loss, why should it be just you taking it, spread it out evenly between
    yourself, the clients, and your workers.

    That's what I would do, that way everybody shares the burden some.

    Last but not least, your problem is a likely indication that your prices are a bit too low.
    Last edited: May 4, 2011
  8. guitarman2420

    guitarman2420 LawnSite Senior Member
    Male, from Midlothian, VA
    Messages: 617

    I appreciate everyone's feedback. It helps to have people trying to help you out rather than saying, duh . . . I think we are too top heavy - I try and generate sales and run the office and I have an operations manager who is trying to maintain quality and keep all the equipment going. One thing I have not been able to figure out is seeing companies working their crews from daylight to dark - the overtime would seem to be a killer; but when you do the math of having less employees and less equipment and overhead, maybe it makes sense. The other problem that I have is if I drop 1-2 crews and trucks is how to keep the revenue flowing for the landscaping project work? I make more profit on that work; but in VA, you have @ 4 months a year to do plantings, etc. You can't build a constant revenue source from that. I try and build my constant revenue around the lawn maintenance and use the other for gravy - but I do recognize the labor & insurance (overhead) is way too high.

    Also, what do you guys do about damage at townhouses, etc.? Do you cover all storm door damage? That seems pretty straight forward that if you broke it you fix it; but now I have a client that wants us to fix vinyl siding that on the bottom edge is nicked by the string trimmers.

  9. Monster Lawn Care

    Monster Lawn Care LawnSite Member
    Messages: 13

    Maybe if you drop to 2 crews and add part-time / seasonal help every year for installs, etc. You could get with a temp service to provide the seasonal labor, plus they'll handle most of the employment paperwork headaches.

    I think if your guys damaged the siding, you're responsible for it. I think you should crack down on that kind of stuff with your guys.

    Sounds like you've built up a great operation, kudos to you.
  10. willretire@40

    willretire@40 LawnSite Bronze Member
    from VA
    Messages: 1,390

    Looks like you need an office girl. Operation manager should be doing some cutting and landscaping. You should be out helping cut if the guys get behind. You need to only have 3 man crews. On your residential accounts if under 3 acres then you should only have 2 man crews. Trim back the employees and then see how much can get down.

    I would have the 60 res accounts set to one crew tues-thursday. Then have that same mowing crew doing landscape or commercial work on Monday.

    Just look at your numbers and see where you can shave $500 a week. Your not making any money so be tight with your budget. What do you have to lose anyway?
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