How in the heck do they do it?

Discussion in 'Business Operations' started by Bunton Guy, Apr 14, 2012.

  1. Bunton Guy

    Bunton Guy LawnSite Bronze Member
    Messages: 1,895

    Now im not saying I want to be like the people im getting ready to describe....but for anyone that knows inside workings of these larger companies HOW IN THE HECK DO THEY DO IT?

    Im sure every large city has these big player LCO's. Im in Charlotte NC and have dozens that do in the millions every year.

    Anyway to point out a few. Ecoscape solutions group. They started in 2005 and were on lawn & landscapes list of top 100 companies #70. I think they are in the 10-15 million a year range. It all started as two much much smaller companies merging. How do you go from two partners and 2-3 trucks to over 300 employees in 7 years? I know a good solid team of sales people & a good marketing campaign helps but this is to the extreme. They had to be doubling in size every 4-6 months to get to where they are. I don't even see how you can get credit lines that big to help with those growing pains.

    The other company is Providence landscape group.... They were formed in 2006 I beleive. They have some of the most beautiful trucks on the road. All of them are isuzu crew cab cabovers with vanscape bodies on them that have full wraps. I think last I saw passing their shop they had 8-10 of them in a line and then some other trucks. I know some can put on a great show with smoke & mirrors....but geez. Makes some of us "normal" guys wonder what we are doing wrong & what could we change.
  2. Duekster

    Duekster LawnSite Fanatic
    from DFW, TX
    Messages: 7,961

    Likely good funding, strong advertising and the ability to take a loss for a while. Us smaller guys do not have that luxury.
  3. Bunton Guy

    Bunton Guy LawnSite Bronze Member
    Messages: 1,895

    How in the world do people get that kind of funding. Must have private backing with some major capitol to hire sales people and crews without work coming in to pay for the first year or two. I would not want that liability and bill to have to pay back to whomever loaned me several hundred thousand dollars.
  4. Patriot Services

    Patriot Services LawnSite Fanatic
    Messages: 14,019

    Good connections.:usflag:
  5. Moose's Mowing

    Moose's Mowing LawnSite Senior Member
    Messages: 452

    probably lots of debt. I'm just starting out as a solo op. I'm only in debt to myself and haven't overextended this idea to the point where it'll cripple me. I have less than 10k in to it so far not including my pickup since I'd have that anyway. if it all goes south I can always sell the equipment which I bought used and really only lose what I have out for insurance and licensing. I haven't financed anything or borrowed from anyone or any bank. I shelled out my own cash to start this. Granted I'm super super small and I'll be happy to break even this year. that means next year I'll have much greater profit margins while owning everything I have (which I already technically do) I don't have an actual business model in writing but I have it mapped out in my head and it seems to be working so far, just slower than I had hoped.

    Those huge companies grow so big so fast, they're probably digging their own grave. this certainly isn't always the case, but who knows, you and I might still be around in 10 more years mowing grass, but will they? business is a funny thing and big companies have the smart pencil pushers that know how to use debt to their advantage and I'm sure many of them cook their books to make things work. be like the turtle, slow and steady and you'll win the race.
  6. grandview (2006)

    grandview (2006) LawnSite Gold Member
    Messages: 3,465

    In L&L that had a story about a company that is closing shop even through they did over 40 million in work last year.
  7. Duekster

    Duekster LawnSite Fanatic
    from DFW, TX
    Messages: 7,961

    They say many companies are operating in bankruptcy and do know it for 6 months to a year.

    It is not about winning a bid, it is about making a profit.
  8. lawnman3

    lawnman3 LawnSite Member
    Messages: 44

    very well said my friend...

    big is just that alot of overhead and employees to pay .. not thats a bad thing you just need to know how its done...

  9. coolluv

    coolluv LawnSite Platinum Member
    from Atlanta
    Messages: 4,371

    Thats the truth with a lot of companies. Out of business but don't know it yet. Lots of newbies too, they think I need to get accounts and will do whatever to get them. Then they realize that with more accounts comes more overhead and then poooofff their gone. See it every year around here. I say it every year but I really believe there are the most LCO's around these parts then I ever saw.

    I used to work for an 80 million dollar a year construction company that was in business for over 25 years. Started out small, 2 brothers. Long story short they got hooked up with a major builder during the beginning of the boom years. Bidding the work was easy because everyone was making big money, so if you were in with a company and your bid was within reason you were good to go.

    Everyone was making money. Then as things started to slow down those bids had to be more in line with what was reasonable and the profits started to get thinner and thinner. Those doing the estimates for the company in the good times were now forced to sharpen the pencil to get work and still make a profit. Well since they never had to do that in the past they were unable to get work at the bids they were giving.

    So here come the layoffs and the downsizing. They were having a real hard time getting work now. So panic set in and here come the lowball bids just to stay busy hoping things were going to get better. Well as you know that never happened and we are still trying to claw our way out of this mess.

    They went from over 300 employees in 3 states with 3 divisions down to about 50 before I left. They couldn't afford to get a tire fixed on a machine and every vendor wanted cash before they would even think of giving them anything.

    Point is they couldn't bid to make a profit because they never had to. Then when they had to they didn't know how. Its easy to run a business when times are good and bids get accepted at high profit margins. Its hard to run a business when money is tight and you have a thousand guys bidding for the same work for very little profit.

    When this company finally figured out they were in real trouble they brought in a few consultants to help get them back on track. Well after the consultants spent a few weeks going over everything they concluded that the only course of action was to liquidate and file for bankruptcy. The two owners were amazed and were devastated because they had no idea it was as bad as it was.

    I remember at one of our mangers meetings the owners saying that they were going to be one of the only business to survive this downturn. I myself could see the writing on the wall and got out before they went under. But they believed till the end that they were going to survive. It wasn't until the outside consultants came in and said "Hey guys guess what? Your screwed and you don't even know it!

    They are now out of business and all because they could not bid properly to make a profit when times were hard. It doesn't matter if you are a big company or a small company. If you don't know your numbers and what you need to make a profit and you just lowball to get work, and your mentality is I need more and more accounts.

    Then be prepared to be like these guys. Out of business and you don't know it yet. I will never forget what I learned from them on how not to run a business.

  10. Efficiency

    Efficiency LawnSite Bronze Member
    from zone 6
    Messages: 1,736

    Buntonguy, you have to ask: what is the end game? What do they want to accomplish? Once you know that answer (and you may never), then you may begin to understand what and why they are doing things.

    If the plan is that they just have to squeak buy paying their debts until a larger fish comes by and buys them up, thats how they get by. At that time, as long as the payoff is greater than their debts, they win. What the payoff amount results in is the gamble. We are playing that game as I write this with one of my divisions.

    If you know fairly precisely how much your business is worth in the eyes of a buyer and how they arrive at that value, then you can play those games to your advantage and reasonably hope to come out on the winning end sooner than later.

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