Questions about employees/crews and profitability

Discussion in 'Business Operations' started by sandman23, Mar 10, 2008.

  1. sandman23

    sandman23 LawnSite Member
    from GA
    Messages: 212

    I will need to hire employees soon and would like some input on profitability/efficiency. I am trying to do a forecast and would like to know where I will be most profitable and efficient.

    First let me share my thoughts... I can do 60 accts solo. At 61 accts, I need an employee. For easy numbers say 60 accts grosses $84000. 61 grosses $85400. Basically the same but I now have a $25000 employee. I have just taken a drastic pay cut. I will need to rapidly build to 100-120accts to get back to where I was. As is the case for every employee I hire.

    That being said...

    How many crews are most people running and how many to a crew?

    What are the break points to needing a new employee? Do you base it on accounts or sales?

    I know it is hard to be accurate without knowing my properties but how many accounts should I expect a crew to service per day. My properties are 5k tight Bermuda's and some larger fescue lawns.

    I have heard that it is common to pay employees based on 40 hrs/wk 52 weeks/yr. This is to keep good employees. Thoughts?

    According to my hypothetical forecast, It seems that 300 accounts with 5 full time employees is a fairly reasonable goal. It should gross a little over 400k. Less expenses, employees, and taxes it should net (not gross) in the 90k range.

    It's not Bill Gates money but it is more than I could make solo. I really do not care to have the headache of employees but at 37, I need to start looking at the future. Not to mention my wife is upset at me that I cannot go on vacation this July. How the he!! am I supposed to take a week off in July when I have 60 accounts to service?

    Thanks for reading.
  2. merrimacmill

    merrimacmill LawnSite Senior Member
    Messages: 515

    And what happens if/when you get sick??

    I have a lot of the same questions as you, so I'm no much help. But it will be an interesting thread..
  3. davis45

    davis45 LawnSite Senior Member
    Messages: 985

    Sorry im not help, but also looking for an answer. I run solo and this will be my first season qutting my regular job and going full time. Have a couple 10-12 acre accounts, which is the only time i would need a helper. Im not sure how to go about doing everything.
  4. pinto n mwr

    pinto n mwr LawnSite Senior Member
    from gr8, mn
    Messages: 422

    6 crews, anywhere from a 2-man to a six man crew
    Adding a crew is primarily focused on sales but routing has a little to do with it
  5. silentbob

    silentbob LawnSite Member
    from NJ
    Messages: 27

    The big key to deciding whether to hire an employee (or 2) is based on your own personal interests. Like you said, if you want to go on vacation, or if you are sick, or have some emergency then having someone to cover you is very important. Yes, you will make less money yourself, but you also run the risk of losing customers if you can't service them if something were to happen.

    The best thing is to try adding 1 employee and getting enough accounts to compensate. Then add another and again add some more accounts. Before you know it, you will have built up a large, strong business and still made approx the same amount of money. Most importantly, find someone you can trust. It costs you more per hour to get someone good, but it is worth more that the extra couple of bucks to have someone reliable. Believe me, I know, I've had both good and absolute nighmares as employees. Just my 2 cents.
  6. salandscape

    salandscape LawnSite Member
    Messages: 168

    A decent employee should be able to earn you $15K more, profit not added sales. So if an employee is going to cost you $25K +$3.75K in expesnse such as comp and taxes you should increase your sales by $43K. Probably won't happen first year but if you break even on them and get them trained properly you can spend more time selling.

    Start by trying to sell to existing customers first, little extras, shrub pruning, bed weeding. If you can sell $500.00 worth of work to 30 customers this year that's $30K! your 1.25K in the black already. Sound easy enough, your an entrepeuner (sp) give it a go!
  7. salandscape

    salandscape LawnSite Member
    Messages: 168

    Should have been 60 customer not 30, you get the point

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