Need a manager?

Discussion in 'Business Operations' started by CSRA Landscaping, Aug 4, 2001.

  1. CSRA Landscaping

    CSRA Landscaping LawnSite Bronze Member
    Messages: 1,232

    Here's the deal. Right now I'm a one-man operation. Not near enough work yet to keep me covered up. My wife and I are considering moving back home (about 2 hours away) and I'm trying to figure out what to do with the biz. I've considered selling but haven't decided that's the route to go just yet.

    Another idea that keeps occurring to me is finding someone to run the business here while I'm 2 hours away, working on something else. They would pay the equipment expenses from co. income, service the accounts, etc. They would, ideally, act just like me (only hopefully better) and I could help out by bidding on certain jobs for the company and stick to that aspect of the business. Of course, I would want them to go after more work as well, so that it could grow.

    Right now it takes all that the business brings in to pay expenses and to live on (no other source of income att) so I would have to transfer the cash-flow to them so they could live! I would need someone that is ambitious enough to see the opportunity here but not so ambitious that they want to strike out on their own. I need some way to make it attractive enough to them to have them stay here ... and they need to be a good worker with a good head on their shoulders ... a rather uncommon thing!

    So ... any ideas as to how this can be brought about?
  2. parkwest

    parkwest LawnSite Senior Member
    Messages: 678

    Read an article a while back in one of the trade magazines where the owner would provide the equipment minus the truck and pay strictly on commission 40% to the workers and 60% to the owner. Something like that arrangement might work.
  3. John Allin

    John Allin LawnSite Bronze Member
    Messages: 1,488

    I would venture to guess that you should be netting about $100K in order to afford to allow someone to run your business (paying them around $70K with bennys, and leaving you with some money after it's all said and done). Under normal circumstances, this means you should be grossing about $1Mil a year to achieve this kind of net. Some business's achieve $100K on $500K gross, but it would be unusual.

    Also, being an absentee owner takes an awful lot of confidence in your management team. If they decide not to pay the feds their cut of the payroll taxes, it's your fault - and your responsibility. Same for loans.... you're probably going to have to put up a personal guarantee, and if the management team screws up - you're on the hook anyway.

    I would recommend thinking long and hard before going down this road. You may be further ahead to sell what you have outright, take the lower net gain and move on (or back home, as the case might be).

    Just an opinion, like you asked. Not meant to be gospel....
  4. CSRA Landscaping

    CSRA Landscaping LawnSite Bronze Member
    Messages: 1,232

    That's fine, John. I'm loving the feedback that I'm getting on this so far. It seems to me that's a pretty low percentage of the gross to net, 1 out of 10?

    At any rate, that's what this thread is for - to get all sorts of differing views and see what I can get to come together from it all.
  5. John Allin

    John Allin LawnSite Bronze Member
    Messages: 1,488

    Corporate industry average of 10% is great. Look at the public companies... they get 10%, thier stock soars.

    Net 10% is good.

    Some are better (we are), alot are worse.
  6. Lanelle

    Lanelle LawnSite Bronze Member
    Messages: 1,361

    A one-man owner/operator maintenance business should have a higher net than industry standard for several reasons. The primary one is that an owner will work harder, longer and more carefully than an employee. Since your business is dependent upon how good the service was last week, relying on someone else could lead to more headache than you can tolerate. You definitely need to look at several solutions before proceeding.
  7. gusbuster

    gusbuster LawnSite Bronze Member
    Messages: 1,932

    I had many family friends try this. Out of 5 that I know about, 3 sold their route, 1 rotates days that he's around, 1, so far(been 6 months since he moved) hasn't had many complaintsor loss of accounts. The reason for this is it is his worker that has been working for him the last 10 years. All his clients nows the worker well. My oppion, the worker does better work than my friend.

    Think real hard about what you want to do Jeff. Most of the time, your client expects to see you and not a worker. This does cause problems.

  8. charlesw

    charlesw LawnSite Member
    Messages: 34

    Sell and take what $ you can.


    Help get someone else started in the business using your equipment and collect a small percentage of the $. With the intent to buy you out after a certain time (1 year). If the person wants to get into the business this is a good start with little upfront cost and low risk. Because it is going to be their business, they will work harder at it. But have a contract....

    Did I mention to sell now and take your money?

  9. Barkleymut

    Barkleymut LawnSite Bronze Member
    Messages: 1,117

    I couldn't agree more with Charles W. If you are bringing in less than $5K/month then no one will buy the business, just sell based on per customer and sell the equipment. If you are only bringing in $4K/month or less you should have gotten out earlier
  10. CSRA Landscaping

    CSRA Landscaping LawnSite Bronze Member
    Messages: 1,232

    Barkleymut, I was Airforcin' before that, so this is good money compared to that! :D

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