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Starting Commercial

Discussion in 'Lawn Mowing' started by ABY, Jan 13, 2003.

  1. ABY

    ABY LawnSite Member
    Messages: 3

    I started my lawn maintenance and landscape company 10 months ago. I inherited five employees from a previous company that shut down. I also paid them to convert their existing accounts to my new company. I started with 35 high end residential homes. I now have 60 homes. I have never worked in this business before now. I was a corporate officer in a publicly traded company for the last ten years before I was laid off. The company I inherited the employees from did my landscaping two years ago. It looked like a good business after spending the money I did on our own home.

    My challenge is learning the business. While I thought I knew how to mow a lawn, I did not know very much of anything. I am blessed with wonderful employees who have been trained for the last fifteen years on how to do it right.

    However, it seems I cannot do more than breakeven. While I had start up cost with new equipment, trailers, and trucks, my expenses seem to go up right with my revenues. I'm starting to believe that I need a mix of commercial accounts to make a profit.

    Any words of advice for me to step into the commercial side? I do annual contracts for my residential clients. The bidding process has been difficult for me because of the learning curve. I suspect the commercial bidding process will be more difficult.
  2. beasleyslawn

    beasleyslawn LawnSite Member
    Messages: 4

    there are plus signs to commercial accounts and they have there negitive signs. i have been in the business for 6 years and started by doing residential yards and then 3 years ago i went commerical and residential. plus signs are that they pay more money and are usually year around contracts but your residential will make you or break you. the negitive signs are sometimes they will pay you quicker than other times.
  3. curry

    curry LawnSite Member
    Messages: 211

    Do you really need 5 employees for 60 accounts? I would think you would see a bigger profit if you cut a couple of them with that amount of accounts.
  4. rodfather

    rodfather LawnSite Fanatic
    Messages: 9,501

    I agree. Do you need 5 employees to take care of 60 (even if they are large) homes? 2 or 3 I would think should be enough.

    As for money going in one hand and out the other, there will always be times that you feel that way (especially start up time in the Spring). And 10 months is not a long time to be in business, too.

    The commercial "learning curve" is not much different than handling residentials. Commercial accounts are more financially-minded with different needs and issues (insurance, w/c, etc.).
  5. IBGreen

    IBGreen LawnSite Senior Member
    Messages: 726

    One guy on a mower, one guy on a trimmer, one guy with a blower and picking up is all you need. There should only be three at a time on residential accounts.
  6. greenman

    greenman LawnSite Addict
    Messages: 1,405

    And that would be a larger property,IMO. Two guys would be sufficient.
  7. Gravely_Man

    Gravely_Man LawnSite Silver Member
    Messages: 2,075

    Please give us some additional info on these "high end residential homes" as to what services you are providing and how many square feet of turf.

  8. bubble boy

    bubble boy LawnSite Bronze Member
    Messages: 1,020

    so true, been crunching my spring numbers for a while...always interesting.

    going commercial won't help your bottom line. in either market it's possible to profit, since your in res. i would try to turn things around rather than open up a whole new set of potentially unprofitable accts.

    if you were willing to give us some details and numbers we might be able to give you some ideas on how to turn it around
  9. lawncare3

    lawncare3 LawnSite Bronze Member
    Messages: 1,981

    I agree you can two guys using 52"ers and then they both trim and blow @ the end. 1 arce = 15-20 min with a 2 guy crew
  10. GraZZmaZter

    GraZZmaZter LawnSite Senior Member
    Messages: 740

    60 accounts could be serviced by 1 person if set up right. Now depending on what the clients needs it will alter. You definately have way too many people on the payroll for your size business.

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