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Discussion in 'Business Operations' started by nozzy, Feb 11, 2013.
You must have been doing something wrong.
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SRT8, in your experience what is a conservative expectation for profit from a 2 man mowing crew? Also, does that expected profit take into account having to ramp up some to keep them busy? The part that concerns me the most is stepping from having all the work I can handle myself to suddenly having to keep a crew busy, training, new bids, etc. I'm guessing it will be a couple months minimum of taking a significant pay cut personally. Was that your experience too?
What do you do with your guys in the winter??
Any other insights into dealing with the transition would be appreciated!!
Our 2man crews gross $120k plus $20k or so in enhancement work a year.
That $20k in enhancement work is almost all profit, we just pay materials and I have my guys take care of it so I don't have to pay for extra labor. Enhancement work is key to running a successful company.
We don't make millions off a 2man crew but its worth having. I think it will be tough to sit back and hire 2 guys to run your crew. I don't know how much overheard you have or how far apart your accounts are. Every account is different and every account has a different profit margin even if its just by a little. We get lucky on some of our sites and they let us use their dumpsters so we don't have to bring green waste home. I also don't know how much you pay your guys.
Our "profit" is going to be different because of our high overhead. We try to pull about $3k profit per month from a 2man crew.
We also have no truck payments, that can drop your profit by $500 per month per crew.
My advice is to break everything down and see how much it will cost you down to the penny. You will then see if you can do it or not. If your profit margins are low growing your company isn't the answer, getting higher paying accounts would be better.
My guys work 40 hours a week, 52 weeks a year.
I live in California and we don't get snow in our area.
I have my guys on site rain or shine. even if they are not working due to heavy rain they are on site and we still get paid. I convinced all my clients that its better that way in case a tree falls on a building we can take care of it or if a storm drain clogs we can unclog it before it starts flooding. Rain and heavy winds can be scary if you have big trees close to buildings so our clients have no problem paying. It also works out great for my guys, they can all get their 40 hours in.
My construction crews are the ones that take the hit. Landscaping in the mud is no fun and not very productive, but again we don't get that much rain so they only miss less than a week a year.
Hope this helps
It sounds like you want to transition into owning a business, and are willing to deal with the hassle that comes with employees. I would recommend hiring a helper that you can envision running a crew, interacting with your customers, and legally driving your trucks. They will cost you a little more per hour, but it will be worth it.
Adding a helper should give you plenty of time to sell additional accounts and start managing your business. As you add accounts, start letting him maintain some of your less important properties on his own. This will let you judge his work and give you time to continue selling.
When you get maxed out with one helper, add another part time worker for a few hours a week. They can help your full time worker on a few properties, while you continue selling and managing your business.
The next step will be starting a second crew. This step will be expensive, but you can delay the purchase of new equipment for a while. Have your full time worker (crew leader) do 4 10 hour days. This will free up your equipment for you use while you add another 1 or 2 days of work.
Eventually you have a full time 2 man crew, run by an experienced crew leader, and a part time crew that you are running. Make sure you always leave time to sell, manage your business and check the other crew's work. You can then repeat the process until you are managing 2 full time crews.
Sorry for the long post, I hope something in it is helpful.
Also, don't worry about a bonus plan at this point in your business. Each time you expand you will experience a temporary pay cut, and you can also expect regular turnover with your employees. If someone proves to be a good worker for a year, you can always consider a bonus then.
Thank you both! Great insights and suggestions. SRT8, would you be able to elaborate on "enhancement work" - what that is, and how it works in your company?
I will second SRT8's post, my previous company also aimed for 120k plus 20k in enhancements with a 2 man crew. In the Southeast, we have very different summer and winter seasons. We would keep our key employees full time all year and hire additional workers, such as college students on summer break, for the busier summer months.
I would consider an enhancement to be a small "landscape" job that your "maintenance" crew could do for an existing customer. Preferably, while they are on site doing a visit. Enhancements could include such items as; mulch, seasonal flowers, small plantings, fertilizer, etc. Our enhancements typically took less than half a day and would usually not require special equipment, like skid steers or tractors.