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

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

  1. willretire@40

    willretire@40 LawnSite Bronze Member
    from VA
    Messages: 1,389

    Where do you think your business is suffering? I ask that because normally we know what the problem is but we tend to ignore it sometimes. It can really only be a fee things. Not charging enough, too much debt, or to many employees, and/or not following a budget. Imo
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  2. guitarman2420

    guitarman2420 LawnSite Senior Member
    Male, from Midlothian, VA
    Messages: 612

    Because of too many vehicles, debt is an issue. I think it's already been established that I have too many employees. "Besides that, Mrs. Lincoln, how did you like the play"? :)The good new is that it's correctable; but I can't sit on it any longer to let it work out. BTW, we have a rainy day here, that's why I'm playing on the computer today!
  3. Texas Lawn

    Texas Lawn LawnSite Senior Member
    Messages: 262

    Here is why your company is not doing well:

    -very low revenue for 4 crews and 9 people

    -you dont make enough money to have an operations manager

    -you have too many people in your company. You dont need that many, i guarantee it.

    -Your overhead is too much because you have 4 trucks but dont have the revenue to justify it

    I know its easy to sit here and say all that, but it seems like you are running a very inefficient operation. You dont seem to know your numbers because if your labor is at 60% it didnt happen overnight. Good luck
  4. guitarman2420

    guitarman2420 LawnSite Senior Member
    Male, from Midlothian, VA
    Messages: 612

    Dear Mr. Texas Lawn, I've had responses from @ 20 people today, and yours is the only one that seems to have an air of arrogance about it. The WHOLE reason I posted the question was to recognize I don't have all the answers although I do know my numbers - I PLANNED to invest in my business and grow it quickly - I'm 58 and I don't want to do this when I'm 70, so I PURPOSELY built it quickly and PLANNED to lose some $ upfront to grow the top side or revenue. @ 20 people today have responded with good natured help and it takes one person to sound like a know it all. Good luck to you too!
  5. Texas Lawn

    Texas Lawn LawnSite Senior Member
    Messages: 262

    How was I suppose to know that? Im sorry if I came off as if I knew all the answers, Ill be the first one to tell you I dont. You asked for help and I gave it to you. When it comes to business and money, I dont sugar coat and Ill agree that comes off arrogant, but thats not the idea. I do wish you the best of luck in business and hope it all works out. I would argue about knowing your numbers because of how high your overhead is and how much you are paying in labor, but I guess if that was on purpose, its ok.
  6. guitarman2420

    guitarman2420 LawnSite Senior Member
    Male, from Midlothian, VA
    Messages: 612

    Thanks for the clarification. I'll be the first to admit that I'm more of a "salesy" guy and I'm trying to learn to better manage the day to day operations. That's really why I hired the operations manager, who is a close friend; but I have learned the hard way (losing my shirt) that I have to have my hands and nose in the middle of everything. I was spoiled because I was in another service business for over 30 years where I managed professional service technicians. My apologies:cry:
  7. Kelly's Landscaping

    Kelly's Landscaping LawnSite Platinum Member
    Messages: 4,676

    Every one seems to jump on the trucks but you didn't list their sizes years or even if you own them outright. I have 4 trucks I run 2 crews I have 3 trailers I have been getting the pieces in place to equip a 3rd crew. I own my trucks but am upgrading in a few days to a brand new one and we will eliminate the smallest pick up. But I stand by owning that many as you need back ups and things break and the older they get the more often they break. Never thought id want a back up trailer till an axle snapped last summer and left one with 3 wheels for a week before I could get the parts. Needless to say we were really behind that week. As for the trailers they don't cost you much to hold them the truck insurance covers them and our taxes on them are like 60 dollars a year each add in registration and less then 200 a pop. Your not going to solve the problem with that modest gain.

    My trucks have 500 k insurance and cost me about 1100 a year each to insure add in the extras and less then 2k each a year to own em. Repairs of course are extra as are the tires but they are gona wear the same rate regardless how many trucks you own.

    Which brings us to employees you your wife and your manager. For the most part do not perform the actual work being billed for you all have your roles but you 3 cost more then you bring in. Your manager sounds very good the issue is what are you paying in salary for you 3 even a modest 30k or so a year times 3 of you is over 100k when you add in all the little taxes and fees we pay. That leaves 300k roughly for the remaining 9 guys and all gas all materials and all repairs and upgrades.

    9 billable guys at 400k your guys are bringing in 44,444.45 a year each that's 15k a man less then my guys. If you add in your wife you and your manager that number gets real ugly. Now your down to 33,333.34 a year each so the problem isn't the equipment its the dead weight and I mean no offense. At the very least your manager ought to be running a crew himself and running the companies daily issues and you need to step in to some of his roles like doing the errands dropping off broken stuff picking up repaired stuff grabbing loads of soil and mulch what ever you can do to keep the jobs running smoothly. Next the Ot it does hurt but it is part of the trade just try to work it so you only have what you need i.e. try to keep the crew leader hours under control since they make the most but feel free to work the new guys cause they make the least in fact its a great idea to run the Saturday jobs yourself. You won't add to the cost and your get the benefit of getting the most done you can out of each week. Bottom line you need to get your average income a year per man up past 55k or your never gona make much.
  8. guitarman2420

    guitarman2420 LawnSite Senior Member
    Male, from Midlothian, VA
    Messages: 612

    Thanks for a great posting. :) If we continue at the level we are today with our project revenue, we may be @ 500k by the end of the year; but who knows what the summer and fall will bring with the gas prices. In my old career field, medical service, we had to bring in @ 110k per FTE. The trucks are 1 2003 F250; 1 2005 F250; 2011 F250; 2008 Nissan Titan and 1999 Chevy Tahoe. We owe something on everything except the Tahoe.
    Last edited: May 4, 2011
  9. mattfromNY

    mattfromNY LawnSite Bronze Member
    Male, from Central NY
    Messages: 1,582

    Just a couple points I would throw in from my own experiences: Running less guys on crews, but more hours each (dipping into overtime in the busy times) will generally cost you less overall than trying to keep more employees paid full time all season (Ex: 2 guys making $12.00 each, 8 weeks at 60 hours + 20 weeks at 40 hours= $32,640 <straight pay, overtime pay over 40 hours for this example, not figuring taxes,etc>, whereas 3 guys at straight 40 hours for those same 28 weeks= $40,320)
    -Also, I am not afraid to invest into more efficient equipment when necessary. My thoughts are that if I find a great employee, I will equip him/ her with whatever it takes to make them the most efficient as possible. I would rather burn out a good piece of equipment than a good employee, any day of the week. Good equipment is easy to find, good employees arent.

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