Trimming the fat

[tiedeman]

Well, I have been thinking about trimming the fat with my business. We just moved into our new shop which has added a big budget woe. And with gas prices at $1.84 here, insurance rates increases, and the new city tax that we will encounter, I have thought about letting go my top manager. I have been thinking about bringing in another guy and training him and paying him less. I would save approx $500-$750 a month by bringing in a new guy.

I have also thought about going back to a one man operation to save on expenses and pocket some extra money. The problem that I will face is the lack of help, no free time, etc. Currently I have one full timer, one part-full timer, and one part timer that help out during the year.

What do you guys think of the situation? Have any of you run into something similar to this? And what did you do?

 

[specialtylc]

With 3 employees you have a TOP MANAGER. seems like over kill.
Put the manager to work.

 

[tiedeman]

well, really there are only two employees, the other is a fill in maybe like 5-8 hours a week.

 

[GreenMonster]

I hope your top manager isn't a Lawnsite member

Has he been loyal, dependable, and helped you grow your business and be profitable? If so, the least you owe him is to make him aware now, before the season gets rolling.

Is $500 a month worth the headache and investment of the hiring process & training? Will you be able to keep that next individual happy enough to stay on board? How long until his paycheck is the same as the guy you have now?

 

[Kelly's Landscaping]

If the guys is not efficient then fire him but if he is efficient what good its it to save a few dollars an hour on a new guy when the new guy is slower and takes longer to complete the job. What you need is more work and more income when I have adversity I push ahead I don’t retreat I watched to many ex employers retreat them selves out of the market.

 

[tiedeman]

well, the manager really hasn't been around long with me. I am the only one that made the business grow.

The story behind the pay of the manager: He was working at an appropriate wage, well I don't know if a lot of your remember that I was bought out last summer, in which he lost a job, but then I backed out of the deal. So I still had all my customers with nobody to work and I needed someone fast. The only way that he would come back would be a $1.75 raise from his current pay. So needing someone, I said yes. Well, I am starting to regret that I agreed to it.

 

[GreenMonster]

Originally posted by tiedeman
well, the manager really hasn't been around long with me. I am the only one that made the business grow.

The story behind the pay of the manager: He was working at an appropriate wage, well I don't know if a lot of your remember that I was bought out last summer, in which he lost a job, but then I backed out of the deal. So I still had all my customers with nobody to work and I needed someone fast. The only way that he would come back would be a $1.75 raise from his current pay. So needing someone, I said yes. Well, I am starting to regret that I agreed to it.

Well that changes things a little doesn't it? Tough business to be paying people more than they are worth....

 

[tiedeman]

exactly green man. I just don't know what to do. He's a great worker, but the whole hourly wage throws me off. I would even like it if it was reduced at least 75 cents, but I know that he wouldn't go for it. To make matters worse we just moved into a new shop, which we reallly really needed badly, and I know that he will say that if it wasn't for the shop then he would be paid the same rate.

 

[GreenMonster]

Originally posted by tiedeman
exactly green man. I just don't know what to do. He's a great worker, but the whole hourly wage throws me off. I would even like it if it was reduced at least 75 cents, but I know that he wouldn't go for it. To make matters worse we just moved into a new shop, which we reallly really needed badly, and I know that he will say that if it wasn't for the shop then he would be paid the same rate.

If .75 reduction would satisfy you, is this simply a mental thing. Assuming he works a normal man year (2080 hrs) that's $1500 a year. Is that make or break? It would cost you more than that to hire and train someone else.

Can his rate be better justified by giving him more responsibility?

Your hands were tied when you brought him on last year. I guess you need to weigh all the factors and decide if they're still tied now.

 

[tiedeman]

you are forgetting fed, state, unemployment expenses, as well as increase in workers comp. I think that I would be a little bit more understanding except he drew unemployment from me this winter and I have projected my rate to jump about 2 to 3% because of that.