How long do new start ups last on average ?

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SilverPine

LawnSite Member
The key is to separate yourself from the rest of the other companies. Yes, cutting grass is easy enough to get into. Pick a specialty and offer extra services. I started off cutting residential, now we do everything from maintenance to construction on commercial and residential.
Quality over quantity will get you further in this business. Just my opinion.
 

Jake the grass guy

LawnSite Senior Member
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?
im a small solo op and im on season 4 i believe... im in it 100% for the cashflow though.. the business was created as a way for me to payoff debt and then to buy rentals... so i would say having a solid purpose or goal keeps me focused. however i do this part time. i have benefits through my day job( health care 3 12 hour shifts a week) so i have the time and the drive for now.. i pay myself first.
 
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sjessen

LawnSite Fanatic
Location
Knoxville, Tn
im a small solo op and im on season 4 i believe... im in it 100% for the cashflow though.. the business was created as a way for me to payoff debt and then to buy rentals... so i would say having a solid purpose or goal keeps me focused. however i do this part time. i have benefits through my day job( health care 3 12 hour shifts a week) so i have the time and the drive for now.. i pay myself first.
2 questions: How many hours do you spend a week being an LCO during the season and do you have a family?
 

Jake the grass guy

LawnSite Senior Member
2 questions: How many hours do you spend a week being an LCO during the season and do you have a family?
Ya I have a wife and a toddler. Wife is also in the medical field and works 3 12s... Last year I averaged about 12hours a week. This year I’m hoping to increase my efficiency and profit margins without adding a ton of hours. Ideally I would like to be around 20 customers in a 5 mile radius that all have at least 1 extra service besides mowing. With that I think I can gross around 40k
 

TPendagast

LawnSite Fanatic
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.

ETC.
so the industry standard answer is the many of them do not make it a year

the most common is to grab a bunch of work in the spring during the “mad rush” and run yourself out of business by August

by far the vast majority do not make it three years.

It’s a loose statistic which is probably worse than we realize because of all the businesses that started and no one knew about them...
meaning the average time to go out of business would be even faster
 

TPendagast

LawnSite Fanatic
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

Those numbers are worse if you look at landscaping in particular abc not just small business
 

Hayduke

LawnSite Senior Member
Location
Oregon
You also have to ask what does it mean to "last"? What does it mean to experience long term success and how many companies achieve this? Much harder to define. I know a couple outfits that have been dragging dust for years now, but they are still in the game. One owner takes home $15,000 grand at the end of the year and he's happy. Because he is already retired, has a pension, nice house and just likes the idea of having a pet landscape business to take care of.
Another two brothers inherited a house and probably a tidy inheritance from their mom, no mortgage. They do 30 lawns at $160 monthly 12 months of the year. Haven't raised their rates in 15 years. So they each take home $24K before taxes and overhead. They have been doing it this way since 2002. They seem happy as clams.
Me? With kids and a mortgage and bills etc etc, success at this business is measured in much larger dollar increments. But I am sure there are some out there who would pity my yearly income.
So it is really a toss-up, as there are plenty of LCOs out there who probably should have bailed out but just didn't have to.
 

sjessen

LawnSite Fanatic
Location
Knoxville, Tn
Ya I have a wife and a toddler. Wife is also in the medical field and works 3 12s... Last year I averaged about 12hours a week. This year I’m hoping to increase my efficiency and profit margins without adding a ton of hours. Ideally I would like to be around 20 customers in a 5 mile radius that all have at least 1 extra service besides mowing. With that I think I can gross around 40k
Good plan. You have margin to make some extra $ with margin for your family.
 

sjessen

LawnSite Fanatic
Location
Knoxville, Tn
so the industry standard answer is the many of them do not make it a year

the most common is to grab a bunch of work in the spring during the “mad rush” and run yourself out of business by August

by far the vast majority do not make it three years.

It’s a loose statistic which is probably worse than we realize because of all the businesses that started and no one knew about them...
meaning the average time to go out of business would be even faster
A significant percent of new startups are under the table the first year especially if they are part time.
 
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