My competition calls me for business advice .

Mdirrigation

LawnSite Platinum Member
Location
Maryland
I am a small basically 1 man show , I am friends with a guy who started the same time I did . So here is his picture , 8 service trucks with plows , rented warehouse loaded with the best equipment , $3400 a month rent plus cam fees . Bi weekly payroll of $15,000 . He has 1100 irrigation service contracts , annual gross 1 million . He did a lot of big commercial and golf and residential .

Why did he call me ?

His question was , " How do I become small ? "

He was explaining how employees were poaching work , stealing gas filling up their cars , padding hours with the help of managers . Hard time getting paid . High insurance , workers comp etc .

He couldnt figure out how I lived in a nicer house , nicer toys , rental properties all being a 1 man show in an unlettered van . I took all this as a compliment .

I asked him do you have time tomorrow ? And show me your books , and I will show you mine . Thats what I did for 6 hours yesterday . And boy were both surprised . He was just moving money around , he paid so much attention to the big deposits , that all the little expenditures didnt seem like much until you added them up . He was barely breaking even on 80% of what he did . The other 20% is where he made his money . ( irrigation service ) . Now he couldnt figure how my expenses were so low . And how I had no debt service . I explained how I buy equipment , used , from guys like him who are fed up or from auctions . I pointed to his 3 point slit seeder , similar to mine , I asked how much ? he said $9000 How often does it get used ? 1 month in the fall . I said mine was $175 and I put 50 bucks in parts , its not as pretty but it works . His jaw dropped . New service van vs my used one . on and on . He laid off most of the employees on Dec 15 , all but 2 .

So today I came back and gave him a possible game plan . Go with 1 helper , the service van , 1 pick up with plow , skid steer , trailer and vibratory plow . Thats it . Drop the sport field maintenance , sell all that equip , use up excess stock or sell it . Move out of the building , I found him a place to park equip for $400 a month . The plow and skid for winter income , the pick up and van for service .the skid steer for misc jobs . ( excellent shape kept indoors 1100 hrs ) Now using my numbers I told him to concentrate on service , installs only if they are highly profitable . And low voltage lighting , this is his largest customer base and highest % profit, lighting and irrigation . He liked the idea especially when the numbers were there in front of his face . The net to him was close to what he was making .

He was concerned he may need help at times . I said I hope you do , I told him of an arrangement I have with another 2 small guys . We sub to each other work together , we are all happy as long as we make our nut . So you get a big job , make a call and you have an experienced crew and equipment for a day , 2 , 4 or 5 . Then we are gone . It goes for service and blow outs too . Everybody makes money but doesnt have the labor burden .

Your sick ? want to take a 4 day weekend ?, it can be covered , and you just do the same when needed . And the best part is we wont poach your customers , we dont need to .

The discussions went on the entire day , he was taking notes , as was I we learned a lot from each other . he even commented that at one time he thought I was an Idiot for not getting bigger .

I started laughing , I told him I am still having fun , remember when it was fun ? he said "Hell yea" . I said " I dont hate my job , I get paid to play in the mud and run thru sprinklers "

Heres the difference , Me , I own myself and my business , You, the business owns you . You were working for everyone and took what was left if any , I am working for me and keeping it all .

Between rent , payroll , 1/4 ly taxes , insurance and payments rough numbers put him at a $60K a month to break even . AND he DEPENDED on snow . So a bad year or 2 was a major set back .

Now alot was his fault and he admits that , some of his best and trusted people were shafting him and he didnt have enough checks in place to catch it early . This season coming up will be difficult but on paper he should be able to re group .


Now there was a point in time about 20 years ago thats what I wanted , pretty trucks , my company running over most of the state , a building with my name on it , making $50K , $100K deposits , living the dream . I was some times jealous of their appeared success , there is another large company in my area with over 1 million in liens and judgements against them . A real eye opener . Especially when we were comparing notes and he mentioned he was a bit jealous of my success as a small operation and my other financial decisions . I basically told him even though we are competition we are not . If me and this other guy can help get you thru this transition we will do what we can . But I hope you remember how to hold a shovel
 

prezek

LawnSite Senior Member
Location
Baltimore, MD
Most guys would be too proud to ask for the help. Hope it works out for everyone...I think I’ve asked before. What area do you work out of? Anne Arundel?
 
OP
M

Mdirrigation

LawnSite Platinum Member
Location
Maryland
Most guys would be too proud to ask for the help. Hope it works out for everyone...I think I’ve asked before. What area do you work out of? Anne Arundel?

I am in Anne Arundel , he is in Howard . Hey when you have been in the business for 30 plus years , all the old guys know each other . Kinda like sports , we compete , but we also shake hands .
 

djagusch

LawnSite Platinum Member
Location
MN
Both ways are fine to run. My take is this.

His business is mismanaged and could be alot more profitable. When its profitable it gets fun again. It would truly be a business and he would collect a pay check, profit, and assets.

You have a business but it's really a job with benefits of ownership. If you broke a leg would your income change drastically? If you got sick does your income suffer? Now used vs new I like used also if it's not critical for daily operations. You pay in repairs or principle and interest that is the main difference. A 1 man show it doesnt cost as much to have a breakdown vs a crew depending on it.

Asset building using your business is critical for retirement and long term wealth. He should of been buying a building not renting. If you can cash flow the property owned will increase in value and add assets for the owner.
 

TPendagast

LawnSite Fanatic
I am a small basically 1 man show , I am friends with a guy who started the same time I did . So here is his picture , 8 service trucks with plows , rented warehouse loaded with the best equipment , $3400 a month rent plus cam fees . Bi weekly payroll of $15,000 . He has 1100 irrigation service contracts , annual gross 1 million . He did a lot of big commercial and golf and residential .

Why did he call me ?

His question was , " How do I become small ? "

He was explaining how employees were poaching work , stealing gas filling up their cars , padding hours with the help of managers . Hard time getting paid . High insurance , workers comp etc .

He couldnt figure out how I lived in a nicer house , nicer toys , rental properties all being a 1 man show in an unlettered van . I took all this as a compliment .

I asked him do you have time tomorrow ? And show me your books , and I will show you mine . Thats what I did for 6 hours yesterday . And boy were both surprised . He was just moving money around , he paid so much attention to the big deposits , that all the little expenditures didnt seem like much until you added them up . He was barely breaking even on 80% of what he did . The other 20% is where he made his money . ( irrigation service ) . Now he couldnt figure how my expenses were so low . And how I had no debt service . I explained how I buy equipment , used , from guys like him who are fed up or from auctions . I pointed to his 3 point slit seeder , similar to mine , I asked how much ? he said $9000 How often does it get used ? 1 month in the fall . I said mine was $175 and I put 50 bucks in parts , its not as pretty but it works . His jaw dropped . New service van vs my used one . on and on . He laid off most of the employees on Dec 15 , all but 2 .

So today I came back and gave him a possible game plan . Go with 1 helper , the service van , 1 pick up with plow , skid steer , trailer and vibratory plow . Thats it . Drop the sport field maintenance , sell all that equip , use up excess stock or sell it . Move out of the building , I found him a place to park equip for $400 a month . The plow and skid for winter income , the pick up and van for service .the skid steer for misc jobs . ( excellent shape kept indoors 1100 hrs ) Now using my numbers I told him to concentrate on service , installs only if they are highly profitable . And low voltage lighting , this is his largest customer base and highest % profit, lighting and irrigation . He liked the idea especially when the numbers were there in front of his face . The net to him was close to what he was making .

He was concerned he may need help at times . I said I hope you do , I told him of an arrangement I have with another 2 small guys . We sub to each other work together , we are all happy as long as we make our nut . So you get a big job , make a call and you have an experienced crew and equipment for a day , 2 , 4 or 5 . Then we are gone . It goes for service and blow outs too . Everybody makes money but doesnt have the labor burden .

Your sick ? want to take a 4 day weekend ?, it can be covered , and you just do the same when needed . And the best part is we wont poach your customers , we dont need to .

The discussions went on the entire day , he was taking notes , as was I we learned a lot from each other . he even commented that at one time he thought I was an Idiot for not getting bigger .

I started laughing , I told him I am still having fun , remember when it was fun ? he said "Hell yea" . I said " I dont hate my job , I get paid to play in the mud and run thru sprinklers "

Heres the difference , Me , I own myself and my business , You, the business owns you . You were working for everyone and took what was left if any , I am working for me and keeping it all .

Between rent , payroll , 1/4 ly taxes , insurance and payments rough numbers put him at a $60K a month to break even . AND he DEPENDED on snow . So a bad year or 2 was a major set back .

Now alot was his fault and he admits that , some of his best and trusted people were shafting him and he didnt have enough checks in place to catch it early . This season coming up will be difficult but on paper he should be able to re group .


Now there was a point in time about 20 years ago thats what I wanted , pretty trucks , my company running over most of the state , a building with my name on it , making $50K , $100K deposits , living the dream . I was some times jealous of their appeared success , there is another large company in my area with over 1 million in liens and judgements against them . A real eye opener . Especially when we were comparing notes and he mentioned he was a bit jealous of my success as a small operation and my other financial decisions . I basically told him even though we are competition we are not . If me and this other guy can help get you thru this transition we will do what we can . But I hope you remember how to hold a shovel

I didn’t read all that
People scoff at me when I say business consultant
But that’s what I do, 90% of the time

Solve the problems like employees stealing fuel
Padding hours
Inefficiencies
Problems
Replace them with systems

It’s not just him
Unmanaged everyone will have the same problems
Not sure how many “managers” as in plural he should be carrying with only a million in revenue
 
OP
M

Mdirrigation

LawnSite Platinum Member
Location
Maryland
I didn’t read all that
People scoff at me when I say business consultant
But that’s what I do, 90% of the time

Solve the problems like employees stealing fuel
Padding hours
Inefficiencies
Problems
Replace them with systems

It’s not just him
Unmanaged everyone will have the same problems
Not sure how many “managers” as in plural he should be carrying with only a million in revenue


95% of your posts that I have read are pretty much spot on .

My post was kinda long . Where he is sitting, at this point in his business is a crossroad , does he put it all on the line and try to regroup at 55 years old , hire , train 10 new guys and keep at the former level , or pull back and scaleit and keep the cream and possibly milk it for 5 or 10 more years ?
 

TPendagast

LawnSite Fanatic
It sure was , they were there for snow , basically 3 sat still 10 months of the year .

He focused on the gross sales but neglected the costs .
Wow
Has he heard of sub contracting?
Not to mention buying snow pushers and renting/leasing the equipment to use them only for snow season .

See
This is why there ARE consultants

People think it’s “obvious” or “easy”
Or that consultants are just there to take money and do no work.
I don’t know how others price.
But I usually make my own salary...
“If I can save you $150,000 can I have $36,000 of it?”
Omg! That’s too much money!
Well I’m not asking for money you’re not already spending, I’m going to take $36,000 and I’m going to give you $114,000... deal?

You’d be surprised how many people think there’s some kind of trick or scam afoot.
But you just outlined a good bit of the “how to save $150k” right there on your own.

There’s some people who think they need a consultant and they don’t.
I might waste a few days hanging out with them, looking at books... deciding there’s nothing I can do or change to help them.
It happens.
Those people are usually “burned out” and thinking “there’s got to be an easier way to make money”
Which is why they think they need a consultant.
If they open a trade mag and hire a consultant and find out $70,000 later they just wasted $70,000.... that’s how consultants get a bad name.

But lots of firms this is all they do, they’re not going to jabber with you and look at your books for nothing, they aren’t flying across the country to see you in their snazzy suit for no reason... this is their profession.

Me?
I’m a contractor
I only charge for consulting because if I were free, I’d never have time to make any money contracting. So I have to charge something.
 

TPendagast

LawnSite Fanatic
95% of your posts that I have read are pretty much spot on .

My post was kinda long . Where he is sitting, at this point in his business is a crossroad , does he put it all on the line and try to regroup at 55 years old , hire , train 10 new guys and keep at the former level , or pull back and scaleit and keep the cream and possibly milk it for 5 or 10 more years ?
That depends on what he wants to do at 65?

Retire?
Where’s the money going to come from?
Hopefully in ten years he has something he can be president of and pay someone else to run day to day operations.
 

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