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Maintenance Labor %

Discussion in 'Florida Lawn Care Forum' started by RBatten, Jul 3, 2012.

  1. RBatten

    RBatten LawnSite Member
    from FL
    Messages: 101

    Commercial auto $650 per month (3 vehicles 2 trailers), one car payment $400 per mo., maintenance seems to run consistanly $100-$200 per month, phone $250per, internet $50, office supplies $50 per (stamps, envelopes, paper, ink)=$1600 per.

    That doesn't inlcude gas, which runs $1300-1500 per and labor.
  2. Hmmm...have you shopped around for auto? Have you considered converting to Quickbooks and eliminating the need for stamps, envelopes, etc?? Why is you phone bill so high?? You said you have room for 5-7K more in income. Could you eliminate some accounts or routes and downsize??
    Posted via Mobile Device
  3. Landscape Poet

    Landscape Poet LawnSite Gold Member
    Messages: 3,638

    I am able to reach 14% with ease and could make it lower if I did not pay my guy for a full 40 during the on weeks during winter. If I was a real prick I could send him packing during the winter months all together and call it good and either re-hire him or another as spring approaches and bring my profits up.

    My lower % comes from as stated not including my labor in that too in case you missed that part, the rest is just volume as we are a two man crew handling roughly 28-30 residential lawns each day. Most of our properties are newer (within 7 years or so old) so the landscape is not mature which requires less input on our part too. I do not chase shrubs etc just for the hell of it either. Most guys that I know will include shrub trimming etc for a extra $20 or $30. That simply does not make sense to me when I can go two houses down and mow their lawn and not spend near the time and make twice as much gross. It simply does not make sense to me and my business model. The same holds true for high detail properties....do we still have some..yes but I can assure you that those are not as profitable in this market as they should be in comparison to just straight mow, trim, edge, blow properties. There is a line of diminishing returns in the current market. Everyone is willing to give the customer extra for just a little more. I don't see it that way. You want your shrubs trimmed and you have a house surrounded by viburnum - that is fine, but it will cost you, because the time I spend jacking around with your viburnum every month - I can go mow two of your neighbors 3K of turf properties, edge them, trim them, and blow them off. This is were I differ from many - I do not let my ego get in the way and only insist on doing the nicest properties with customer who want everything perfect....I like the upper middle to middle class person who works 60 hours a week, does not have a detailed landscape that consumes time each month and just simply wants someone reliable to care for the lawn, not scalp the piss out of it, not be consistent with the days they are mowed, will leave them a note in the mailbox or drop them a email if the lawn is too dry or if webworms or any of our other lovely pest we have down here are currently attacking their lawn. I want that guy because he is happy to pay a reasonable amount just to have that done and not have to worry about it after working all week. He/She holds a well paying enough position at their employment that they are not cheap asses and will pay through the winter because they appreciate the fact that business is business. Those are my kind of people that allow me to run a 14% payroll with ease. Everyone else can have the Mc Mansions with the prices they are getting on them in the current market.

    As Diamond pointed out - I am not required to pay WC because of my size so that does not figure in to my payroll either.

    I think that the problem that the OP is facing is just what many lawn guys face, they want to be big, they want to have it all. That is ego getting the best of you if you are not in the position to correctly grow like that. The simple step of adding another truck and trailer is one that I am struggling with right now. That is extra money in fuel, extra money for the truck, extra money for insurance, extra money for maintenance upkeep of equipment etc etc after the initial outlay of cash to equip the trailer you have to purchase so that it ready for business.

    Like the OP stated, he has the ability to take on a extra 5-7K in accounts right now...my question would be why is he already there? You know Jvan and so should any one else that has been in business for awhile...Payroll is your largest expense....why would you keep that many people employed if you did not have the need for them. Why would you have that much equipment at the ready?

    My plan instead of being ready for today for what might happen tomorrow. Swamp myself with so much work that it is hard for us to keep up, which is where we are at. Before I buy another mower, truck, trailer, set of sticks, insurance for it all...myself and my guy will work OT. Why pay OT? Because it is sure as hell a better return on my investment that having equipment sitting around not bring me home money.

    Many of you have asked why do you sub your sod etc out. Because my ego does not get in the damn way of my pocket book, that is why. I make a very very nice profit on sod each year for essentially taking sales calls, spending some time with the customers, asking silly questions like why are we replacing sod? The generally don't know - or their pest control company let it happen or their lawn guy did not let them know anything was wrong or that he took out 3 sprinkler heads on a visit but did not bother to tell them. I take that little time, figure out why the sod went bad - sell it, have a good close rate on selling my maint. service while discussing this, and oh yeah, then I sell them the PCO part too. Then I collect my check for the sod from them, collect my check for lawn maintenance , check my collect for the PCO part and guess what...all I did was the lawn maintenance. I do not let my ego get the way of my wallet. Too many lawn turds want to do everything themselves, they want to be the biggest and baddest and fail because they are overstaffed,, try to grow to fast, want to have the nicest trucks and nicest accounts, that is why I am able to keep my payroll low - I simply do not do that. I grow slow and steady taking on work that is profitable and which allows me volume. In this business just like every other there is a law of diminishing returns ..the trick IMHO is to figure where you can make money and laugh your ass off a the guys that think you are as good of a businessman as them because you do not have the brand new f-350 or the most tricked out trailer. Look deep at your cost on a property by property bases and you will start finding out where your real money comes from and where it does not come from.
  4. jvanvliet

    jvanvliet LawnSite Gold Member
    Messages: 3,944

    1/3 of the labor force is furloughed from November through the end of March and we go to a four day work week.

    Work crews for special projects are billed @ $25.00 per hour.
  5. Duekster

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

    Man I wish we could be excluded from WC. I suppose I could be but many of my commercial contracts require it. I would be taking a financial risk without WC even if not required.
  6. Ric

    Ric LawnSite Fanatic
    Messages: 11,969

    I got caught with a small WC violations that opened Pandora's Box. I had a casual Helper on a job with my regular employees. Workers Comp walked up on the job checking. OK I am Guilty of one day labor off the books. They audited my books back 3 years and fined me for every subcontractor I had that I didn't have a WC paper on. It didn't matter if that Sub had WC, Only that I didn't have proof. BTW the WC Inspector was a Divorced Woman who was training two new inspector both who were divorced women. All Man Haters.

  7. RBatten

    RBatten LawnSite Member
    from FL
    Messages: 101

    I have shopped the auto, and believe it or not, that is a good rate. Its billed 10 months a year, two months no bill. It works out to $160 per mo per vehicle. One is a HD box truck that is almost half the premium, but well worth the extra cost, providing advertising (rolling billboard) and security for the equipment. The phone includes office line, fax and cell phones. I tried not providing cell phones for the crew leaders, but they never seem to pay their bills on time and their phone would get cut off. I got tired of not knowing what was going on some of the time. Its also a nice perk that doesn't cost an arm and leg, like health insurance, which I don't provide.

    I could downsize and get back on the truck, but then growth would slow to a crawl and there would be no time to bid new work and take care of customer relations. I want a business not a job. If I'm working in the business, I'm not working on the business, and a business that isn't growing, its dying. I also don't want a job. If something happens to me, I get hurt or sick, then there is no income and this business is too tough to just be a job. There are a whole lot easier ways to make a living if you just want a paycheck. **** I would propbably make a whole to more money working for someone else, but I would loose alot of the freedom that my position offers.

    I don't need to be the biggest, baddest guy on the block, but I do want something that has value that someday my kids can have or sell. I guess I want a legacy, to have something of value for my family. My wife has a job, and it pays very well, but at the end of the day all she really has is a paycheck. Something happens to her and the income is gone.

    Right now I'm in that middle ground between having too little work for current staffing and having too much work if I cut it. I'm still running good labor and profits, but I want to make sure that I'm getting every penny I can while I work on growing.
  8. mjlcare2

    mjlcare2 LawnSite Member
    Messages: 200

    All of you guys who don't have workers comp even if you ARE under the 3 employees.. what are your plans if you or your "workers" do get hurt on the job? sue your clients? just wondering..

    not having the right insurance's is a risk I'm not willing to take even if I was under the 3 employees. and many of the commercial contracts require it!
  9. Landscape Poet

    Landscape Poet LawnSite Gold Member
    Messages: 3,638

    Just because you do not have workers comp does not mean that you can not be covered by a umbrella policy, it is my opinion that you should have one no matter if you are sole prop or LLC, the umbrella gives you the needed security " Just in case"
  10. Landscape Poet

    Landscape Poet LawnSite Gold Member
    Messages: 3,638

    Your phone situation is simple. You discuss with them the fact that you pay them to be a crew leader and that comes with certain responsibilities. If they can not be responsible enough to pay their own phone bill, how effective can they be as crew leaders? Are you scared of letting them go? In case you have not noticed unemployment is pretty darn high in in Florida and there are lots of people looking for work. Maybe I am just lucky but when I advertised for a employee I had people with all kinds of green industry knowledge for assistant golf course supers to guys that had worked at Disney and Universal for YEARS. I had people sending me their resume that had their Masters degree, but the economy sucked so bad they just wanted a job. I am not a big fan of using intimidation on a employee, but I would if they did not have their act together enough to pay their phone bill. There are people out there who are leaders looking for jobs and have the common sense enough to manage to pay their phone bill so when the boss calls and says lets go work, they can answer the damn phone.

    You can not have it both ways. You can not complain about the % of payroll but not be driving the sales home yourself. If as you state you need to be free to drive customer relations and drive sales. What seems to be the failure in why you can handle a extra 7K of work right know???? I do not give a crap what kind of lawn boy logic you try to apply to it, call it a job, call it a business, call it whatever the heck you want, but I can assure you any SMALL business owner or Large Business owner has a JOB. DO you think that Donald Trump wakes up some days and simply does not work to earn his money? Think again. People who have money have accomplished things in their life/work are working all the damn time. Do you think that this people do anything and I mean anything without worrying about how they are going to get their next dollar? The difference between being successful and not is a matter if you are hungry or not. That is it, do you wake up in the morning and feel that strange nervous feeling in your stomach that feel like a bunch of angry bees floating around in your stomach???? That is you worrying about how you are going to make your next dollar, how much profit are you going to pull in this month, will you be able to buy whatever it is your kid wants this month, whatever you wife wants to do this month....you have to feel them damn angry bees in your stomach. If you do you will be like whatever example you want to use that is truly successful ....you will will wake up in the damn morning and work your tale off until you simply must go to bed, the entire time wonder how are you going to grow, how many sales can you gain tomorrow. The morning you wake up and don't feel those angry bees in your stomach is the day you and your business start to decline. So you state you are overstaffed, you don't work in the feild and do not want to because that would simply be having a job. Then who the hell is selling the business? If you don't go do that job, then I think you should understand who is to blame for having a crew overstaffed enough to handle a extra 5K worth of work.

    Again - this is lawn boy logic that has been spread on this site so much it makes me want to puke everytime I see it. I want a business not a job....WAAA WAAA WAAA:cry::cry::cry: Go to anyone you consider successful in your community and ask them if they have a job. I bet you the answer after looking at you like you are mentally slow is your darn right I do and that they put in a heck of a lot of work to achieve what they have. Nothing is going to be give to you. Just because you went to city hall and bought a license and opened up a lemon aid stand does not mean you are entitled to crap. You may one day out sell Minute Maid in lemonade...but I can assure you that if you do you will agree that you still have a job.

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