Why some make it and others don't.

Discussion in 'Business Operations' started by dmk395, Nov 11, 2001.

  1. dmk395

    dmk395 LawnSite Bronze Member
    from Ma
    Messages: 1,006

    I recently hired an electirician to do some work in my house for $700 (including materials which he figured in at about $100). I was figuring it would take him about 2 days or even one long day. Instead it took him 2+ days. I must admit I was impressed with the quality and his timeliness, however I now understand why he drives around in a beat up station wagon. The moral to this story is that when estimating, you have got to really know your costs and be able to nail down your time spent on the job. To really make it in any business you have got to know what to charge, personally I think $200 per day for a highly trained professional is cheap.
  2. Ric

    Ric LawnSite Fanatic
    Messages: 11,969

    Cheat themselves and passing the saving on to the customer.
  3. kutnkru

    kutnkru LawnSite Silver Member
    Messages: 2,662

    What were his numbers compared to the two other estimates you got???

    The thing to remember is that with minimal overhead most of what he charges can go right back into his pocket. I know of a few contractors who say its cheaper to put $5k into retsoring a vehicle every 5 years than it is to buying a new $30k truck that they know some ingrate will hit just because they are jealous or have it get dented and dinged at a jobsite.

    For most people to average $200/day is not just good money its GREAT money. When you consider most contractors are either divorced/single and heavy drinkers/smokers that $50k a year is an awful lot of clout.

    I dont agree with their ways of thinking but I see more and more meeting the criteria to this stereotype. :(

  4. dmk395

    dmk395 LawnSite Bronze Member
    from Ma
    Messages: 1,006


    I see your point also. I just think some really don't understand what they are really worth. Here is another story, my grandfather hired a guy to do tree work. This guy had to climb the trees and limb them one by one, until he made them manageable and could chop them all the way down. He also brought a monstrosity of a chipper to the house which got plenty of work. 8 hours of work, which produced at least a dozen downed trees averaging 50 feet in height for only $300! Now to just cut and drop I can see this being a simple job, but to climb the trees then chip all of them! Anyhow seeing these things at my young age forces me to see how some guys are one man operations, and others have multiple employees. (not too say a one man opp isn't at all desirable or profitable)
  5. Stonehenge

    Stonehenge LawnSite Bronze Member
    from Midwest
    Messages: 1,276

    DMK I think you're absolutely right. The big companies with the nice trucks and nice tools and lots of 'em are the ones who figured out what their costs were, and charged accordingly.

    There's a guy here that owns a scape co that drives around in a beat up, gold colored tank of a car, complete with missing hubcaps, rust and blue smoke out the exhaust. I love when I'm bidding against him. He's always cheaper, but I always get the work. And I have to wonder if, when he tries to figure out why he lost a bid, he says 'Damn! My prices must be too high!'
  6. gusbuster

    gusbuster LawnSite Bronze Member
    Messages: 1,928

    If the prettier equipment,than the quality of theory was true, I would of been out of business many years ago.

    The key is, buy the equipment when you need it. IE. if truck is in good shape, engine blow's, just replace the engine. If the truck's engine, tranny & suspension is gone, then I would spend the money on a new truck.

    The point I'm trying to make is the people who make it in this business are:
    people who do good work
    People who know when to make capitol equipment purchases
    people who keep their overhead as cheap as possilbe without being unfair to their employess, but more importantly, to themselves.

  7. SprinklerGuy

    SprinklerGuy LawnSite Bronze Member
    Messages: 1,778

    Not only do you need to know your costs, daily and general overhead, but you need to recoup them......DAILY...... You should have a system to check that on a daily basis.

    As for the electrician with the beat up truck....some guys are happy with that.....he is probably making it in his own way.

    I have always wanted to go back to being a solo operation until I leave town for awhile and come home to checks and invoices that were done while gone!! Very satisfying.

    Everyones idea of success is different.
  8. bobbygedd

    bobbygedd LawnSite Fanatic
    from NJ
    Messages: 10,178

    i believe all of the above and a few more. customer relations skill is a biggie. i have many times bid the same job as other quality lawn services in the area, my bid came in substantially higher, and i got the job. salesmanship and customer relations is a biggie
  9. kutnkru

    kutnkru LawnSite Silver Member
    Messages: 2,662

    Heres an exerpt from JAAs article at L&L:
    For John Allin, president of Allin Co., Erie, Pa., nothing is more important to ensure his company's success than education.

    "We (landscape professionals) are going to have to become more educated about business," Allin advised. "Mostly the smaller guys are going to have to learn about business because who knows what the future brings here in the next few years."

    I see more an more contractors becoming limited to what services they can offer clients because they have limited education and no formal training in many aspects of our Industry.

    I think this makes total sense when you think about it. The legitimate companies are the ones who are updating their policies and continue to train/educate employees in newer technologies.

    I believe that days for those who do business by handing out an estimate on a piece of lunch sack are numbered if they wish to survive.

  10. TGCummings

    TGCummings LawnSite Senior Member
    Messages: 773

    Sure, Kris, I think that's true of any business. Those that educate themselves and constantly work to improve their systems and policies are the trend-makers that succeed.

    Possibly, this type of business has been slower to realize that than many others, but I hope that changes. In my area, there are literally dozens of small LCOs that don't understand the cost of doing business, the importance of education, or the real potential of this field. This in a township of not 150,000. I talk to many of them any chance I get and am surprised at how little they know about business in general or lawn care in particular. Even the few that 'look the part'.

    I know I've got a long way to go myself, but I'm constantly working to improve. I think that goes a long way...

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