stay the same or go big

Discussion in 'Lawn Mowing' started by jaketri4, Jul 8, 2004.

  1. jaketri4

    jaketri4 LawnSite Member
    Messages: 3

    advice needed from all who know and understand my situation. I am a firefighter and i mow 55-65 accounts off duty by myself. my wife is a school teacher and helps during the summer. i do all by the books as far as filing taxes, no insurance though. i run good equipment toro, scag, honda etc...

    i know i could hire employee, but is it worth it? how many more yards do i need as i will always be an operator/owner. insurance and liability are a big concern when adding help and so is quality control.

    let me know what you think and anything that i forgot. thanks
  2. gunner27

    gunner27 LawnSite Member
    from ohio
    Messages: 243

    I can't believe you don't have insurance. If anything bad would ever happen, you could lose everything including your house. Before you start thinking about getting bigger, i would get insurance for yourself.
  3. Expert Lawns

    Expert Lawns LawnSite Silver Member
    Messages: 2,660

    you are going to catch a lot of grief here on lawnsite for not having insurance. as for "going big", I'm in the same boat as you are. I have around 40 weekly accounts and also wonder how many more it will take to justify hiring help and adding equipment etc. I want to do it right. By this I mean getting ALL the correct insurance, having a payroll (not paying under the table), and maybe having a lawyer and consultant (if these are necessary, I'm not sure)

    Good post, I would like to hear some stories and suggestions also.
  4. Hawkeye5

    Hawkeye5 LawnSite Senior Member
    Messages: 295

    Gunner makes a very good point, Jake. Insurance is a must have. As to your question, I'm sure you will receive opinions all over the board. Just remember, opinions are like (well, you-know-what), everyone has one. Hope your skin is thick. If you can keep the scheduling straight and do 55 to 65 (you don't know?) lawns solo, and make money, I personally wouldn't consider expanding to the point where you require employees. It all depends on what you want to do though, it is your business. My experience really is that employees are a bigger pain than I am willing to bare.
  5. jbrink01

    jbrink01 LawnSite Member
    Messages: 49

    No Insurance? Not even a personal liability umbrella? You are risking everything you own, every time you mow....What is $500 - $1000 a year if you, god forbid, hit a little kid in the head with a rock and kill or injure them? Don't think it can't happen - we just had an incident were a small excavating contractor had his Bobcat fall off a trailer and bounce into a car - 2 people DOA. Now that I'm off my soap box - keep the firefighter benefits and stay small. Retire early when everything is paid for and use the lawn money to enjoy life - you only get 1.
  6. brucec32

    brucec32 LawnSite Platinum Member
    Messages: 4,403

    I am biased, I prefer to work solo in this business after trying employees in the past. If I want employee hassles I would be in another line of work hiring attractive women and intelligent people I can relate to, not sweaty smelly young guys who may or may not be able to hold a conversation. I understand the temptation to save on insurance, I did so for a few years myself early on. In retrospect it was foolish.

    You have a real advantage over most of us in that you probably have access to fellow fire fighters who have the time free due to their on/off schedules and who are always looking for 2nd jobs. That might mean you can find better quality workers than is the norm. But it's tough to find good help legally otherwise.

    Your insurance will go up considerably, both liability and the now-needed worker's comp, plus unemployment insurance. You'd have to get quotes to know for sure how much.

    You will have more bookeeping to do with payroll taxes. As far as how many accounts to add, you'll just have to add up the costs and do the math.

    You will lose a lot of flexibility in your scheduling. Need a day off? Tough, your worker is expecting to work that day on HIS day off. Rainy today? Your worker won't want to be sent home repeatedly with no earnings.

    You'll also have more hassles. Worker home sick or just no-shows on you? You now have much more work to get done before the weekend. Will you be able to handle that? In a business where showing up on time is paramount, it's hard for a small company to handle employee no-shows. A bigger company can fill in for a missing guy. You can't suddenly clone yourself, especially when you already have one full time job.

    You're correct to say you'll still be an owner/operator. No way I'd put employees out on residential lawns unsupervised w/o extensive training and time spent as part of my crew.

    Punch in your own numbers, but if your labor burden with all your additional costs included is $14/hour, you'll need to bill out 112$ extra in an 8 hour work day just to break even. You'd still be doing almost as much work as before (maybe sitting on a mower instead of also trimming) , plus supervising, which takes more of a toll than some realize, unless they get a good worker who also knows his stuff. In which case, he will soon wise up and start his own business and double his pay! The 2nd man in a crew is less efficient per man hour than a solo due to added "seat time" and various inefficiences. But assume adding a helper means you can bill out an additional $180/day. Subtract your labor costs, and you're up $68/day, then subtract additional variable costs (equipment wear, gas, etc from increased sales volume) of maybe $20/day, and you have a net per day of $48. If you're working just 2 days a week part-time, that's $96/month, or maybe $1000 a year. I wouldn't bother for that.

    From my observation, the guys who make money with employees do it by:

    a) paying very low wages. Will you be able to find productive workers who will work for low pay yet also be reliable? Doubtful.

    b) cheating: There is a huge spread to be made by avoiding niceties like insurance, licenses, payroll taxes, reporting their income to the IRS, hiring legal workers, etc. For some this may be their ONLY profit.

    c) Volume: Making a little off each employee. Working them massive hours in the season to help reduce per-hour overhead costs. Getting lots of accounts and hiring lots of workers. It may be too much of a commitment for a part time endeavour, however.

    d) hiring family or friends who are worth far more than their wages, who are more reliable, and more flexible in scheduling than typical employees. After all, what kind of go-getters typically need part time seasonal work? Students maybe, but the current generation seems labor-averse. But having an 'in' with a good labor source may make it feasible.

    I picked up 3 new accounts yesterday and today. In each case, the previous guy hadn't shown up in over a month. Two of them were because the previous lco lost an employee and couldn't make it out. The other the guy just quit coming and didn't return calls. So, if adding employees means you can't be as reliable, you may find yourself just treading water financially.
  7. rodfather

    rodfather LawnSite Fanatic
    Messages: 9,501

    I'm biased too...but I am probably the opposite of brucec32.

    a. I pay very good wages. My guys make $15 per hour and foremen $20.

    b. I don't cheat. Insurance alone for me for trucks, trailers, equipment, liability, etc. each year runs me around 9 grand. This does NOT include WC which I don't know the final amount until 12/31. I don't hire illegal workers and I report all our income to the Federal Government.

    c. We don't work massive hours. In fact, I am sure my guys would like to work more hours than they have this year. I use a payroll company for everything and their records tell me that the most any of my guys have worked in a week this ytd is 42.5 hours.

    d. I don't hire family or friends...all of my employees for the past 10 years are referrals from existing employees.

    Bruce makes and brings up many good points (especially the math part), but it's also good to know you can make a nice business for yourself surrounding yourself with dedicated people.

    Best of luck in your endeavors btw...
  8. KL Squared

    KL Squared LawnSite Member
    Messages: 113

    I am also in a similar boat. I am a full time firefighter with 80 accounts. I ahve taken on my son in law and a partner who is also a closefriend. So far everything is good but we are drwing a weekl salary. The salary idea is so we can have a pay check in the winter. The problem that we are going to have is growth. This year each of us will make 26,000 per year per person. This will leave us some money for expenses. The question is growth or how much is enough? My cohorts are doing this full time and want to make as much as possible. I on the other hand want to keep my flexibilty.

    Bruce32 offers many of the same advice that I have recieved since getting in the business a few years ago. I had a remodeling business when I started the fire service many years ago. I ahd all of the employee problems that Bruce mentioned and I was using part time firefighters. I was cutting corners and grossed over a 120,000 the first year. I put only 30,000 in my pocket. I averaged (counting fire department time) 90 hours per week in work. I hated every second of it.

    My advice is keep it manageable. Consider one seasonal worker to help during the rough summer months. Make your money while you can don't kill yourself to make others a good living.

    As far as the crew goes for this year, when we get to 150 yards then I am going to split the company up to my cohorts and I am going back to a one man operation. Just an opinion.
  9. txlawnking

    txlawnking LawnSite Bronze Member
    Messages: 1,905

    Personally, I think RF, and Bruce have excellent points. Myself, I plan to do as bruce is doing until I own all of my equip. outright. Then, I will attempt to go to a scale similar to RF's.. I definatlelly Have much to learn about running a successful biz before I get in as deep as RF though.
  10. maple city

    maple city LawnSite Senior Member
    Messages: 305

    We are in exactly your situation. My husband is a full time ff and I work with him doing the lawn care. This year, I am pregnant and unable to help him. We have had to hire employees for the first time. It has been the biggest nightmare ever. We have been through 6 guys since May of this year. Drunks, no-shows, losers. It's a losing battle. The only employees you will ever be able to count on in yourself and your wife. Sad but true. The more accounts you take on, the more you will end up mowing alone when your workers don't show up.

    PS - We have carried insurance since day 1. Insurance is a MUST.

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