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How long do new start ups last on average ?

Discussion in 'Starting a Lawn Care Business' started by paulsgrass, Jan 10, 2020.

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  1. paulsgrass

    paulsgrass Banned
    Messages: 380

    For those of you who have been on here a few years how long does the average startup company last ?

    For example a single man operation ? Those with full time jobs doing this on the side ? Those who start too big with too many expenses ? Or any other unforeseen circumstances.

    Limbourg and MILLC like this.
  2. Carolina Cuttin' Company

    Carolina Cuttin' Company LawnSite Senior Member
    Messages: 757

    Let me add to that question: How about those who start small, pay cash for everything, and keep expenses as low as possible? How long do they last. How many of them last?
    Cam15, sjessen and paulsgrass like this.

    GRANTSKI LawnSite Silver Member
    Messages: 2,121

    The guys that pay all cash and operate with “no overhead” in my opinion tend to be more prone to fail as their business grows. Owners get used to pricing like they have no overhead - but as you expand - you WILL have overhead no matter how you do it. Profit margins get lower and lower the bigger you get .
    statistics :
    20% of small businesses fail in their first year, 30% of small business fail in their second year, and 50% of small businesses fail after five years in business. Finally, 70% of small business owners fail in their 10th year in business
    grassmonkey0311, MILLC and kemco like this.
  4. OP

    paulsgrass Banned
    Messages: 380

    Are those stats. specific to lawn care or general new businesses ? If not specific to lawn care those stats are useless. I have been in various businesses over the years. First year is a loss, second year is a loss . If everything works out and you are lucky ( luck is a BIG factor ) you will start seeing profits business growing after the 3rd year. A new business has to be in a financial position to take a loss the first 2 years.

    That is a life lesson for younger people reading this.
  5. caseysmowing

    caseysmowing LawnSite Silver Member
    Messages: 2,438

    All depends on the person.....
  6. Mark Stark

    Mark Stark LawnSite Fanatic
    Messages: 10,755

    Well, lots of new people show up on here, say they just started, ask what mower is best, try to argue why using a Prius instead of a truck is smart, and then....BAM.... they're gone after 10 or so posts. They probably fail. Or rather, they never really succeed.

    GRANTSKI LawnSite Silver Member
    Messages: 2,121

    Those stats def apply. Too many ppl think it’s easy. But to scale it to a reliable/ streamlined business isn’t so easy. Like you said figure on not making much $ the first few years . A lot of ppl don’t believe that and after a cpl years of working and nothing to show for it - they quit before they even get a tax ID so that’s why you never hear of them. Also the % that succeed almost always have failed and found a way to come back from serious set backs. Those big hits that can and will happen require alot of patience and problem solving as well as long term thinking that a lot of ppl just don’t have. I know personally 4-5 that failed without even thinking hard about it and I live in a very small town.
    TPendagast and paulsgrass like this.
  8. grass4gas

    grass4gas LawnSite Senior Member
    Messages: 931

    It doesn’t matter what business you’re in. be it the green industry, the restaurant industry,
    the Waste industry, etc...BUSINESS IS BUSINESS. They all have their own set of problems and issues that need to be addressed at times.

    If you don’t know your numbers, work your numbers, and protect your numbers, guess what, your days will be...
  9. JFGLN

    JFGLN LawnSite Silver Member
    Messages: 2,531

    I see the part timers come and go and I hear somewhat often about solo guys closing down because they needed a steady job with benefits.

    It's a good business for solo guys if the wife has a job with good benefits like health insurance.

    I rarely see someone starting out going "all in" and starting a lawn business from scratch with a big cash investment.

    Back in 2008 some of the install companies went bust or tried to get into the maintenance business.
  10. Matthews Lawn Care

    Matthews Lawn Care LawnSite Gold Member
    Messages: 3,232

    That's just it. Too many people think just cuz it’s a “lawn biz” that general biz practices don’t apply. They don’t look at it like a “real” biz and that’s why they “really” fail.
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