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Planning Ahead

Discussion in 'Business Operations' started by magrima, Nov 24, 2017.

  1. magrima

    magrima LawnSite Member
    Messages: 59

    So I started mowing lawns when I was 12, now 23 about to graduate college with no debt (woohoo!)....but now that I'll have the degree I'm not so sure I want to give up the service. Pretty much solo besides bringing in a brother or two for a large job, I do 60-70 lawns a week with a few commercials in there as well as mulch, hedge trimming, etc. Money is great. Now that I'm thinking of staying in the game and going full board, I've got a few concerns.

    1.) Staying solo in my opinion is risky long term if something happens to me so I would definitely be looking to bring on employees. I've never worked for another lawn service and I don't really have a clue on how crew dynamics work. I'd rather not give up all the clients I have now to go work on a crew if I don't have to.

    2.) What I am charging now is right on market for most solo/single crew guys around here. But when it comes time to start adding employees im sure my prices will need to go up...I've heard some guys who are expanding their business don't raise prices on current customers, they up the price on all new customers. Thoughts on this? My take is that still leaves quite a bit of money on the table, but they say they have higher customer retention because of it.

    3.) Basically is there any good literature, threads, etc. out there that provides good info for guys in my boat who can't go work for someone else to learn the business side?

    4.) My season has always been April-November (Michigan) and winter I would part time as a suspension tech at a local chrysler dealership. Do I need to get into snow or are there other services out there that can be profitable enough to carry over the off season especially once employees get involved?
     
  2. Jmcculler

    Jmcculler LawnSite Member
    Messages: 81

    I don't really see why prices would have to go up, the volume of work should go up to pay for your employee. . If you are at 70 yards and hire a 2nd guy you should have the capability to handle 140 yards. That's where the money comes from to pay him, not a price increase.
     
  3. Jmcculler

    Jmcculler LawnSite Member
    Messages: 81

    I don't bill a cheaper rate if i' m on a job site solo. I bill per man hour. If it's just me there it's $50 per hour and takes me 2 hours I bill the customer $100. If it's me and my employee and we get the same job done in an hour I bill $100. For an example.
     
    RDALawns likes this.
  4. Mitty87

    Mitty87 LawnSite Bronze Member
    Messages: 1,143

    Some people don't have prices to begin with that could sustain employees with a profit. If you are charging $30 man hour it will be hard to make a profit with an employee.

    Employees won't work for nothing like us business owners do
     
    sjessen likes this.
  5. BigJlittleC

    BigJlittleC LawnSite Bronze Member
    from Chicago
    Messages: 1,711

    You should be pricing your yards now as if your paying an employee. What's the point of doing the work solo if you don't get the employee pay + the owners stroke. That's one of the reasons I'm solo I get to double dip.

    If you have priced yourself to cheap that you cannot hire on because of it your on a long road of rebuilding.
     
    ltdlawn likes this.
  6. magrima

    magrima LawnSite Member
    Messages: 59

    Right now I'm getting about $50-$60 per man hour (just me) on residentials and about $100 per man hour on my commercials. So basically I would just be billing additional man hours then. I think I've done pretty good with charging a good amount and not falling into low baller territory so I don't think I've priced too cheap for the area. Standard cut for most lots is $22-$28 and most of mine are $23-$26 residential.
     
  7. Jmcculler

    Jmcculler LawnSite Member
    Messages: 81

    Must be close together $23 to $26 per lot isn't worth my time. Dont unload my equipment for less than $45. I have 58 lots, all in one subdivision, actually have the contract for the subdivision. Most 0 lot line and I get $30 a cut for them.
     
  8. Jmcculler

    Jmcculler LawnSite Member
    Messages: 81

    May be because I'm in a more rural area. I have to have a minimum to pay for travel time and gas in the truck. If I was only charging $25 and $10 of that was for gas in the truck and equipment, then wear and tear on my equipment, I wouldn't be making anything.
     
  9. sjessen

    sjessen LawnSite Platinum Member
    Male, from Knoxville, Tn
    Messages: 4,513

    Keep in mind that overhead runs north of 30% for most solo ops and then income tax and fica will take up to another 40%. What this means is a $30 lawn ends up netting the operator about $12-13.
     
  10. BigJlittleC

    BigJlittleC LawnSite Bronze Member
    from Chicago
    Messages: 1,711

    You need to sit down and figure out exactly what it cost to run your business per hour. Make sure to include what it will cost to hire someone to do the work. I bet you'll find out quick that $50-$60 per hour billed is not making you much money.

    Why are you take such a large pay cut doing residential? Your $100 rate should be a base line for all work not just commercial.
     

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