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How to fail in the lawn business by someone who did it.

Discussion in 'Lawn Mowing' started by PROCUT1, Feb 18, 2009.

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  1. EcoGreen Services

    EcoGreen Services LawnSite Member
    Messages: 205

    Very interesting thread.
    I honestly don't know how anyone can do well just doing residential mowing these days.
    There's far too many unlicensed / Uninsured people out there working for nothing or next to it. Even on tenders this year there's insured guys going in 20% to 30% less than their own price last year to try to keep from losing what they had last year.

    The only area the prices are staying decent is on municipal work with large acreages because "Billy Bob" gets scared off by the equipment cost, Bid Fees and (In most cases around here) the $5,000 to $10,000 performance bond.

    The profit on landscaping for one small job can exceed the profit for a whole year of residential mowing. The per hour profit is more that 5 times higher. There's no 30% GM on materials cutting grass. The profit on a $5000 water feature design / install can be $2000-$3000 for 2-3 days work. (And I pay GOOD installers Well)

    Even to this day, I don't buy new equipment. There's so many people go into this with stars in their eyes not understanding what's involved and end up selling their equipment a year or 2 down the road because they're broke. I bought a used mower last year with 82 hours on it for $3000 less than new because of this.

    I won't even be distributing flyers in subdivisions this year. Far to many guys with a 42" riding mower will to do a 1 acre property for $20 or kids doing small places with a 21" for $10.

    Don't ***** and whine they're lowballing, Don't even bother trying to compete. you'll just shoot yourself.
  2. Rivervalleylawns

    Rivervalleylawns LawnSite Member
    Messages: 146

    Ill take it like me you didnt bother to read the whole thread. I just posted a page before you and said exactly all this!!! You have to find a way to get away from the no barriers of entry.
  3. EcoGreen Services

    EcoGreen Services LawnSite Member
    Messages: 205

    No, Just skimmed it.
    But you are right of course.
    A friend of mine has the only large boom mounted rough cutter in the area. He gets every one of the contracts for the townships doing the ditches and overhanging trees because of that. Between the tractor and the mower, you're looking at about $150,000. But he also earns $120 a hour with it.
    He makes a very good living and works 4 months a year. High entry barrier, No Competition .
  4. Exact Rototilling

    Exact Rototilling LawnSite Fanatic
    Messages: 5,378

    There is another thread from year before last where the gist is "If you're going to Mow ...then Mow Solo". Another great thread where frankly 2/3 of the lawnsite poster wanted to prove this person wrong. He had successful Co. back east [former brickman crew leader etc.] worked himself silly - ran crews - knew the drill...etc. He laid it all out and still many in that thread didn't get it. Every market is different but in many markets Ted's approach will work.

    I can post a link if it interests anyone but anyhow yes I agree. Mowing & Trimming is a fairly low margin game. I know what some of the bigger operators are charging in my area. Multiple crews, big shop, paying a crew of 2 or 3 to drive around town for frankly bigish $30 lawns. I have mainly smallish to tiny $30 lawns. I've lost all my $35 and $45 lawns to grandsons and neighbor kids.

    In the mowing arena I see the price battle in residential mowing boil down to Solo operators with meticulous quality and cost effective time efficient equipment and yes the $15 a week for the neighbor kid who can't edge correctly to save his life for those who just don't care about attention to detail. The 3rd option for mowing smaller lawns is the "Just Mow It" business model. Ford Ranger Trucks, 2 man crews, H2B workers, smaller lawns fairly fixed pricing per sq. foot.

    As for myself I don't see myself ever being BIG or even a "Just Mow It". I just want to be know as the lawn guy with that fancy grass graphic'ed trailer who does have a high attention to detail and my customer apreiate that. And who also does outstanding lawn renovations. I have no current interest in retaining walls, excavation or even landscaping on any large scale etc. I'm seeking maximum productivity solo and I want to basically run the equipment and offer a superior product and end result over the neighbor kids.

    Get rich no...do better than many other lines of work and be happier and more content with less headaches...Yes.

    Learn from the mistakes of others here on Lawnsite....Yes
    hort101 likes this.
  5. pitrack

    pitrack LawnSite Bronze Member
    Messages: 1,048

  6. Blazerfb

    Blazerfb LawnSite Member
    Messages: 136

    Thanks for this story. I really believe it's important that people, including myself, realize that this really can happen to any of us, and easily if we aren't careful about spending, estimating, and forecasting. My motto has always been to "keep it simple" and to "keep my costs as low as possible". There are many inexpensive alternatives when it comes to mowing equipment and easy ways to ensure that you will make a profit.

    Know your costs BEFORE you bid on a job! How else do you know what to charge to make money? Also, why buy on credit? Wait till you have the cash, buy a used piece of premium equipment and make more money because of it, very few people NEED the Exmark Navigator or Walker mowers (some do, and they are nice as hell). Buy what you NEED, not what you want, to get the job done and make the most PROFIT. Do the research on the equipment to know what you need and what is the best equipment INVESTMENT.

    Don't get Lazy!....
    I laugh when I watch a guy take the time to unstrap his walk-behind or zero-turn, gas it up and mow two strips across a townhouse or garden home lot with major maneuvering, then load it back up, strap it down and start his finish work .....all the while I have already unloaded my 21" HRC and finished two full lots and am leaving bc I'm not afraid to walk a little....or at least to use the right piece of equipment for the job. Besides, alot of homeowners hate even the idea of the large mowers on their yard, not to mention you can't change your cut direction and leave ruts after a season.

    Train your employees to know all that you know.... sure they might move on or start on their own, but the ones that do stay you don't have to worry about being non-productive or constantly breaking things.

    Learn all that you can about everything, that has anything, to do with, what it is that YOU are doing! There are many free educations you can find out there, nice people, peers, fellow landscapers who can teach you one or two little things. Dont be afraid to ask! Those little things add up. This is site is a GREAT reference tool if you weigh the opinions......

    Just a few very small tips from a guy who still has stars in his eyes, but is taking a controlled growth plan to get to the dream: putting the money away and taking the jobs that make sense ie. only the ones that make good profit. Still using 21inch mowers when I have to, mostly residential but making a fat profit off any job that gets bid on. Slowly getting into commercial, buying what I need and keeping up top notch work.

    Believe me, it sucks when I'm telling someone "No, I can't lower my price" or getting "No, I can't afford that" but if you aren't making at least a decent profit then why do the work, or lower the price? There are plenty of fish in the sea (at least here) who want a professional quality job and who will pay a fair price for it.

    Thanks again for writing this post, and to everyone who has commented. This is a super important topic!

    (btw, i didn't mean to say that my way is better/I wouldn't have had that happen to me. Just wanted to leave my 2 cents, get people thinking a little, help if I can)
  7. slamjamrockinman

    slamjamrockinman LawnSite Senior Member
    Messages: 715

    You hit the nail on the head. I have to agree all the way, landscaping is where the "big margins" are at. Yes there are those who make a killing in maintenance, but you really have to have it down. The way I look at it, why not start seeking education/experience in the landscape install market and learn how to sell these type's of jobs. After a couple years, you could have a steady flow of high dollar installs coming your way if you build a good reputation. Keep a maintenance crew going, or do the maintenance yourself to keep a more steady and recession-proof source of income.

    That is my plan of action. Do more installs, take the mowing accts I get, but not go out of my way to get them. Make more money doing a "skilled trade" and not have to deal with bidding wars over commercial properties and lowballers stealing residential accts.

    This go's back to the OP, he got out of the lawns and into a more "skilled trade" where he doesn't have to worry about bidding wars as much. "A more level playing field" I believe is how he described that market. Just my .02.
  8. LwnmwrMan22

    LwnmwrMan22 LawnSite Platinum Member
    Messages: 4,373

    This will be year #22 for me.

    I started when I was 16, my dad put an ad in the paper for me to start mowing lawns at $10 / hour. I still have the first yard I ever got a call on.

    I started out with my parents JCPenny rider and a weedeater trimmer on a single place plywood sided snowmobile trailer behind a 2 wheel drive S-10.

    I now have (2) 2006 Dodge 2500 crew cabs and a 2007 Dodge 3500 crew cab with a 9' contractors dump on it. I have (2) 24' enclosed trailers, a 26' flatbed trailer, a 14' dump trailer.

    I have (2) 2008 Kubota ZD331 / 60" decks, a 2007 ZD331 / 72" deck, a 2008 Kubota M6040 that pulls a 15' tri-deck mower.

    I only do maintenance. Mowing and applications, along with mulch installs. No hardscape, no irrigation. Snowplowing and firewood sales in the winter.

    My best years were years 11-12. I had just gotten married, and dropped from doing 130 accounts with 6 guys (residential, commercial and muni) to 40 full service accounts that I did by myself.

    I netted about $60k on a gross of $120k, working solo.

    I too went the Procut way, figuring hey, if I could triple the accounts, or at least triple the amount of acreage we're mowing, then I'll really be in the money.

    I picked up the local school district. Then last year I picked up 2 of the local cities' parks systems.

    This years taxes will show a gross of about $300k. I have an accountant do my taxes, so I can't quote the exact number for my depreciation, but after all is said and done, I'll net about $12-15k.

    The profit margins have just gotten too tight. I had 2 full time employees last year, and 3 fill in guys when we'd mow some of the larger properties (60 acres+) or if one of the full time guys would need a day off.

    For those that think large properties are the way to go, you're sadly mistaken. Everyone and their brother thinks "wow, if I could just get that one account, I could make $35,000 for the summer just for mowing". Truthfully, that one account should be going for about $55-60k.

    Our biggest accounts are where the margins are the lowest. Man hour rates are down to about $30-35 / hour, and that's if we are able to skip 2-3 weeks in the summer. If we get a long season, since the accounts are on a flat rate for the year, some of the man hour rates are pushing $25 / hour, which is break even, if not under.

    I didn't read every page. I'm just coming back over to this side, as I'm hoping plowing is about done here in MN.

    I'm afraid I'll be in Procuts' shoes by the end of next year, if I can't work myself out of this debt.

    It doesn't help having more and more slow pays, which equals more late payments on my part, which equals late fees on top of the already tight tight margins.
  9. Turfcutters Plus

    Turfcutters Plus LawnSite Senior Member
    Messages: 391

    Stay Solo like me . no problems .:weightlifter:
  10. coolluv

    coolluv LawnSite Platinum Member
    from Atlanta
    Messages: 4,443

    Well the way I see it is this way. Most guys start off with big dreams of working for themselves and being boss man. They don't have any experience with business, they don't even try to learn. They come on here and listen to all the kids and part timers giving advice like they know what their talking about. Sure its easy to get sucked up into believing the bull $hit, I know I did. I didn't start my lawn business for the money. I started it for the business experience. I worked 3 seasons part time. Fully licensed and insured etc. right from the get go.

    I found this site and I read and read and read all the threads on here and spent countless hours going through old post trying to get as much info as possible. I have a neighbor who has been in business for about 9 years now. I talked to him every chance I got. He was open about his business and didn't mind sharing the info, But... You have to pay attention to what people are saying and you have to pick out what is actually the truth.

    I don't know why people have to lie about things, maybe it makes them feel better, or maybe they are trying to convince themselves, and if they repeat it to everyone then it will somehow be true. I don't know. That's life I guess. Its the same thing here, you get bits and pieces of the actual truth but rarely do you get the full story.

    Well my neighbor used to have around 250 customers, he acquired 50 of them from a fella who was no longer servicing that area(because of distance) and just gave him the customers for nothing. Pretty sweet deal. The customers that he gave him were all priced low, average $30, but should have been more like $40 or $45. But he didn't care he was happy to get them. Anyway he gained more customers because he was holding to that $30 range, about $10 to $15 under what they should be. Year after year he was growing, so he hired one then another until he was at 6 plus himself. He is a mow only operation but does shrubs and the usual stuff, but no landscaping or fert.

    Well long story short, in 2007 he started with around 225 and finished with around 175. What happened was he started raising prices because he figured out that his guys were making more than he was after it was all said and done. So by the time the end of 2008 came around he was down to about 140 and 3 guys and himself. At the end of last year (2009), he is down to 93 customers. Now some he lost because he started raising prices, and some he lost because of the bad economy, and some he lost to the lowballers and Mexicans.

    Everything he owns is worn out. Trucks, Trailers,equipment everything. Now the only smart thing he has done was not get into debt. But... He has to replace everything and doesn't know what this year is going to be like. The problem with my area and from what I have seen and experienced is, Too many illegals, Too many Bubba's, Too many lowballers, Too much competition. Your area may be different. Since 2006 I have witnessed the explosion of LCO's in the Atlanta area. Just when you think it can't get any worse, well it does.

    Anyway the problem is this, you can stay solo and make a living. Now some think $25,000 to $30,000 is a decent living. I don't. Most solo guys are making $30,000 or less. That is why most won't talk numbers. Now some are making more but not much more, those are the guys that are flying under the radar. They won't admit it, but they are. Now what most of these solo guys fail to realize (because most are young and are going to live forever and never get sick or hurt or break legs etc.) that they are one mishap away from being broke. They think, man I will just keep on keepin on forever. Well good luck with that Johnny.

    The other problem is that every year more are entering in this market, some due to the economy, some because they believe the hype, some because they don't want to work for the man anymore. Most never made more than $10 or $12 an hour, so to them its good money. But... if your used to making more than that then it's going to be a long haul before you make that kind of money you were used to. Some will never make what they used to make and after a while will decide that its just not worth it and go back to working for the man. But for every 1 that gets out 100 take his place.

    In the mean time prices get lower and lower. Talk to the guys that have been in this since the 80's and they will tell you that prices either have stayed the same or have gone down. Now what happens to most guys is they count customers instead of profits. In the beginning, the get 10 then 20 then 30 then 40 and think man if I could just get more my income will just keep getting higher and higher. That's the trap, because they have no business experience, they don't know what their costs are and don't even know how to figure it out, so they just keep right on going until they suddenly realize that they have more going out then what they have coming in.

    Whoop there it is, Whoop there it is, whoop there it is.... another one bites the dust. Go big or go home right. This business has got to the point that you are limited to what you can make because the margins are so low and keep getting lower that the business model just doesn't work. Most don't figure that out until its too late. Now if your wife works, or your part time then you can make a few bucks. But don't expect to be rich doing this. If you don't mind living on low pay and working your @$$ off then this is the business for you. Sure some will grow and make a decent living, Some on here are. But not many, and the guys making a good living are doing landscaping for the real money.

    Which takes investment in tools, training, equipment, etc. that most don't have the time, money etc to invest in. It takes deep pockets and years of sacrifice to make it in this business, and guess what? Prices are going lower not higher. So mow,blow and go, but be prepared to eat like a popper not live like a king. These are the facts. LwnmwrMan22 post above is a prime example of the life of the mow,blow and go guys. He started when things were different and now he's trying to survive and don't think he is going to. Why? because the numbers don't make sense in today's economy. Its not getting any better, and the new guys that enter in this business soon realize that they can't get customers for $35 or $40 so they go down to $25 or $30 or less, just to get work. Which is an unsustainable business model. Once you figure your costs (if you know how) you soon find out that at those prices your making $8 or $10 an hour if that. Now some are happy with that, I'm not. So get those flyers ready and polish up those mowers, its going to be a great year.

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