Where do we go from here?

Discussion in 'Business Operations' started by lndscprwife, May 28, 2004.

  1. lndscprwife

    lndscprwife LawnSite Member
    Messages: 7

    Hey everybody! I am new here and had a question for you. My husband and I have owned our maintenance company for about 2 1/2 years. We are at a point now where we are just not making any money. Every dime we earn goes to expenses. I do the billing and my husband doesn't tell me a lot about our business. But I have to bill and pay our bills.

    We have about 75 to 80 accounts. We have 3 guys that work for us and run out of 1 truck. I know they struggle to get the work done each week. But we can't afford another employee right now. We have another truck parked that we just can't afford to use right now. We are at a crossroads and I am telling my husband we have to grow rapidly or lay off some guys and cut down to enough work my husband and 1 employee could do from my husband's pickup truck. There by cutting out 2 employees expenses, the expenses (gas, insurance, etc.) of 2 Isuzu NPRs and our rent for our warehouse.

    Most of our accounts are about 45 minutes to 1 1/2 hours away from where we live and where our office is. We are discussing selling all of our accounts that are not in our area and keeping the ones closer to us. Then we could run the business from our home with my husband and 1 employee.

    Has anyone ever been in this position? Where do we go from here? We bought the business (accounts and trucks and equipment) 2 1/2 years ago so we still have business loans from that we are paying off. But from my calculations it seems like downsizing would actually earn us more money. We would use the proceeds from the sale of the trucks and accounts to pay off the debt and in a way start over. We just have to figure something out quickly because I feel like we are standing in the middle of the road between a medium sized business' expenses and a small sized business' accounts.

    If you made it through this thank you so much for any help or advice or encouragement you can offer. I just found this website and I look forward to learning from you all! Jennifer
  2. twins_lawn_care

    twins_lawn_care LawnSite Senior Member
    Messages: 932

    Not sure of the size of the accounts you are doing, but it sounds like too many people to just do 75-80 accounts. Then again, I am thinking in terms of small residential lots. Without knowing your sizes/prices, I really can't say.
    If you have that many accounts and are not making money, something is wrong, whether it be hte prices you are charging, or the rate at which your guys work, I don't know. It does sound like you have quite a few expenses, and that may be a place to start. Can you just rent a storage unit, and get rid of the warehouse? So do you have 4 guys on one crew going out, or 2 and your husband?
    From first glance, I would say this amount of work can be handled by a 2 man crew, but without knowing the size here, I could be way off.

    From what you posted, I'd say cut the crew down, and if you need to, just keep the most proftable accounts if you need to cut out some. That may be a starting point for you, because it is not the # of customers you have, but rather what $ they generate that counts.

    Stick with it though, sometimes you need a hard time to step back and improve your company. Don't ever get complacent, keep on trying new things, and it will pay off.

    Good luck with it, hope things turn around for you, and posting some additional information may generate some more replies.
  3. Cutters Lawn Care

    Cutters Lawn Care LawnSite Senior Member
    Messages: 314

    Where are the accounts that you want to sell located. I might be interested in them.
  4. hosejockey2002

    hosejockey2002 LawnSite Bronze Member
    Messages: 1,195

    I'm not a lawn care guy, but I see three things that are likely to be hurting your bottom line.

    1) Tightness of route. If you have accounts 1 1/2 hours away from your shop, you are paying up to nine man-hours a day for guys just sitting in a truck, not producing revenue. As a solo landscaper, I will work that far away, but only if I make enough money so that I'm getting paid for that time in the driver's seat. Otherwise, forget it.

    2) Three man crew. From what I read on here, three man crews are less productive in terms of money earned per man hour, unless you have a lot of very large properties where you can run two mowers at the same time.

    3) This ties in with #2. You have a truck parked. It's costing you money, but not earning any. If I were you I would get the second truck in service with your husband and one guy and try to service 20-30 more accounts, preferably closer to home. If you can't do this, I would get rid of one truck, lay off two guys, keep the best guy, and dump the 20 least profitable accounts you have. I know all this is easier said than done. Good luck.
  5. jackelope68

    jackelope68 LawnSite Member
    Messages: 38

    I am a lawn care guy and I couldn't agree more with Horsjocky. We have about 160 accounts all within a 5 mile radius. It took about 4 years to build it like this. but we are profitable. Windshield time is a killer
  6. lndscprwife

    lndscprwife LawnSite Member
    Messages: 7

    Thanks everybody for your advice. The drive time is why we are considering selling our out of town accounts and concentrating on local accounts only. The accounts are in the Atlanta area (NE) so the traffic kills us too. You have all given me a lot of great ideas. I'm going to call a business meeting with my husband tomorrow. Thanks again! Jennifer
  7. Trevors Lawn Care

    Trevors Lawn Care LawnSite Bronze Member
    Messages: 1,180

    Cut down on drive time. This is my first year in biz and ALL of my 43 accounts are within 15 miles from the first one to the last one. But those are split up into two days, meaning the first day is 5 miles from first house to last house (21 jobs)..And day two is a little more.
    That is where i would start. I dont know if cutting accounts would be worth it, unless they are like $20 bucks for 1.5 hours away.

  8. tiedeman

    tiedeman LawnSite Fanatic
    from earth
    Messages: 8,745

    this is what you need to do:
    1. go through all the expenses and cut big time.
    2. cut the travel accounts
    3. raise prices
    4. be hard on yourself and the way you run the operation, I mean really hard

    Look at me, I went from having 3 employees last year to this year going back to solo and last month I already made more than I did last year. What I did to do it was

    1. cut all travel accounts outside an 8 mile radius
    2. cut all employees, which in turn cut a lot of expenses
    3. overly maintain equipment which causes less downtime
    4. raise both lawn care prices slightly, but raise additional service prices by 60%
    5. then select cut customers that were a pain or I didn't make as much money on
    6. went through expenses and got for the business what I needed to "just get by"

    It really has worked for me. I am about half way out of debt from the previous year and I can invest a lot more with my money than I used to be able to
  9. lndscprwife

    lndscprwife LawnSite Member
    Messages: 7

    Thanks guys for more great advice! And tiedeman (sorry if I spelled that wrong!) it is so encouraging to hear that you can get out of this! I have been running the numbers over and over and to me it seems like we would make so much more by doing less lawns. We would cut accounts, but cut double the expenses as well. With three employees (getting lots of overtime each week, by the way) the payroll expenses alone are killing us. Add in the drive time and gas and that eats up every bit of money we bring in. It just seems like we would be so far ahead if we cut back. Your post proves my theory! Thanks again! Jennifer
  10. mtdman

    mtdman LawnSite Gold Member
    Messages: 3,143

    Just goes to show that you can't just expect to do the work, pay the bills, and make money. You have to pay attention to what you are doing and know your expenses, know your profit margins. Often volume isn't the answer, and strategic tinkering can provide good results.

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