Let's take a minute to talk business

Discussion in 'Heavy Equipment & Pavement' started by Hollowellreid, Apr 8, 2013.

  1. Hollowellreid

    Hollowellreid LawnSite Senior Member
    Messages: 306

    A lot of topics and conversations here revolve around the hardware and methods in which to do work- granted, I share a certain attraction to the Iron that comes with this business.

    However, I find that one can only "equip" themselves so much. We currently have a great group of employees and are pretty well equipped (Never perfect and always looking to change, but we have the tools and equipment to do most jobs in our realm. Anything we don't have we can rent).

    Lately I have been spending a lot of time thinking about marketing, leads, and volume of work. Doing the work is easy enough, it's finding the work and keeping the pipeline full that proves more of a challenge.

    For the last couple of years we have probably done right around $300k in sales per year- We have the time and capacity to increase to 4-500k but find ourselves out of work at times.

    Anyone have any great ideas or insight?

    We get a decent number of jobs from websites, referrals, and find new leads through trade shows and some very selective direct marketing-(special packages sent to builders, etc)

    What are your goals for the sales department of your business?
  2. Scag48

    Scag48 LawnSite Fanatic
    Messages: 6,067

    Take my opinion for what it's worth, I was in business years ago but I'm a hired hand these days.

    It seems to me the repeat business is absolutely where it's at. And when I say repeat business, I'm talking at least once annually. It's 10x cheaper to keep a customer you already have than get a new one. Coming from a lawn maintenance background, I learned this over a decade ago; pretty tough to lose 80% of your business overnight if you're signed up for repeat service. How does that relate to small excavation/hardscape/etc.? You'll have to decide how to make it work for you.

    Those of us hired hands battle almost the same thing. Essentially, I'm in business for myself as a hired hand out of a hall. There are the guys that'll run all over town chasing the biggest, baddest job with the most overtime only to get let go at the end of a project when the outfit leaves town. Make good money while you're working, but you may have some time off when you're done. Some guys prefer that, I don't. I would much rather work 10 months out of the year and keep going back every spring to the same outfit. I've been riding the bench for 2 months as the job I was on wrapped up and the outfit has nothing going here (yet), so I'm trying to get back with a local outfit.

    The point is, chasing the big money, one time projects typically bite you in the ass unless you can maintain some sort of small time, repeat business in the background. Generating business relationships is the name of the game and repeat business is where it's at.
    Last edited: Apr 9, 2013
  3. ksss

    ksss LawnSite Fanatic
    Messages: 7,168

    What Scag says is true. However if your existing customers and the way your doing business is getting you around a 3rd of a mil and you want to get to half a mil, then you need to make changes. It seems like everyone tends grade themselves and others by gross money. I think gains have to be made on both ends, working more effeciently and gaining larger work. Most of us have a limited number of days to make our money and limited amount of qualified help by which to get the work done. So you have to go after the jobs that bring in the most money for the time and resources spent, but you also have to work efficiently.

    The jobs that bring in the most money for me are the medium sized commercial projects and the high end home excavation market. I think having some niche work helps fill the gaps between those commecial jobs which are bid competetively and thinking outside of the box on how to do all types of work better helps with the bottom line. After all you can make 500K and work sloppy or gross 300K have less stress and put more money in your pocket by working smarter and more efficiently.

    I also am continuely trying to increase my work load, but also trying to find the quality work. There are some types of work that we do more effeciently than anyone else in my area. There are also some types of work that we dont do as efficiently as others. I think its important for everyone to seriously evaluate where your strengths and weaknesses lie. We struggle with ductle iron, and some of the larger underground projects. I simply dont have the people with a strong backround in this type of work. So its hard for me to be competetive in these areas. I will if possible sub these portions out to those that excell in these areas, but its harder to be competetive, I have to cut somewhere else that I excell at.
  4. AWJ Services

    AWJ Services LawnSite Platinum Member
    from Ga
    Messages: 4,281

    Marketing is tricky buisness. Different types of work respond to different types of marketing as does different regions. Keep your marketing diversified and look too expanding your scope of work on existing jobs. If you subcontract during jobs l;ook to see if it is feasible too do the work in house. Also look into increasing your "net" on the existing 300k by increasing efficiency or adding equipment to decrease employees. As KSSS said you will find the market is more stable as the jobs get to be more expensive.
  5. treemover

    treemover LawnSite Senior Member
    Messages: 427

    Very Very well put! I tired many years in my younger, earlier days to chase big gross numbers, with alot of trucks and guys. It always seemed the more I grossed the less I actually took home and my stress level was insane. I run 5 guys including myself, gross a decent amount, a workable stress level and take home more than I ever have. You have to find the things that makes you money(profit), not the things that just turn dollars...
  6. Hollowellreid

    Hollowellreid LawnSite Senior Member
    Messages: 306

    Thanks everyone for the responses- it is good to hear from the long-timers on this board that are all around respected and knowledgeable.

    My intention isn't to make it all about the numbers, but more so to set a goal.

    We are also a small outfit- Usually no more than 6 or so.

    We are lucky to have a very diverse and skilled set of guys that aren't overly demanding in terms of wages. Over the last few years we have spent lots of time cutting overhead as much as possible- have a year's payments left on one piece of equipment but everything else is paid for, including trucks, tools, attachments, etc. The shop and office space still has a mortgage but there is an on-site rental house that covers most expenses there. Most of the fat has been "trimmed" so to speak.

    I would imagine with the current crew we have the ability to do 500+ a year without adding crews or growing- we just need the work. I find a lot of years we spend a month or two in the summer looking for work and doing odd jobs/fixing/working around the shop etc to stay busy.

    In essence, I am happy with the size things are now and would like to keep it that way, but would like to flush out the full potential of the current situation.

    This has been good to think about, thanks for the replies thus far.
  7. AWJ Services

    AWJ Services LawnSite Platinum Member
    from Ga
    Messages: 4,281

    I gross over 200k a year with about 15k a year in payroll too employees. Gotta work smart and do not fight the the lowballers.
  8. excav8ter

    excav8ter LawnSite Member
    Messages: 221

    I'm at $225,000-$240,000 a year....No employees. But in the last year or so, I seem to be picking up too much work. I am having to sub out a fair amount of the dozer and excavator work that I would like to do myself, so I can do some of the small detail oriented jobs that are in VERY tight spaces or on hillsides. Last November I got a call from a high end home builder, who is having me take over, basically all of his excavating work ( he has a sweet KW T-800 and a 650j LT dozer and a Cat 277B). He had an employee for 6 years, who did the digging and moving of 4 skytraks and 2 JLG boom lifts. Now I am doing all of that in addition to my other stuff. So now I am having to look for a parnter, and employee or another smaller excavating company to work together, and benefit both of us.
    As far as finding more work goes, i just try to be as fair as possible. Do a good job. And focus on getting referal work. I am having a marketing company come up with a new logo for my company, as well as business cards and possibly a web site. Currently, and for the past 7 years I have done ZERO advertising....but that may change. :)
  9. AEL

    AEL LawnSite Bronze Member
    Messages: 1,724

    Just curious what type of work you do?

    We do no advertising what so ever but are very specialized in 2 different fields of work, and our markets are the general contractors, developers, and government agencies.
    Posted via Mobile Device
  10. excav8ter

    excav8ter LawnSite Member
    Messages: 221

    I do a lot of stuff revolving around my TL130, Kobelco 35sr and my Kobelco 135sr. Concrete and asphalt removal, selective demolition. I sub in to a company who has bad luck working on slopes, hillsides and around water (they've sunk 3 40,000 excavators a D6 and a D8) so now they call me when they work in, on or near water and steep slopes. I also dig for a bunch of plumbers and some residential and commercial builders. This year, a high end home builder who I have worked for off and on for 7 years (he had his own operator/truck driver, but let him go) called me to be his "full time excav8ter", I happily accepted, but now I am almost too busy. I have 7 homes to finish from last year, 10 new mid priced (under 400k) and several that are more than 2.5 million to do. Most of the million and up homes translate in $20,000 or more in equipment time....plus storm drainage work, and sand gravel and topsoil.

    It looks like a pretty good year is shaping up. :)
    Posted via Mobile Device

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