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ChrisLeon
01-11-2012, 11:51 AM
Hey everyone,
So I made it through my first season, and it was a great learning experience with alot still to learn. I saved every penny and made enough money to purchase a new trailer and enough cash to start a marketing campaign for this upcoming season.
Basically my question is this, how do you seasoned business owners currently operate your business? Specificially, are you out there cutting or are you paying employees? If your paying employees, what is standard wage in this business if we just focus on maintenance (cutting, trimming, clean up, fert application) ? If you are running the business and having employees do your flyering, cutting, and maintaining of accounts what kind of profit margin do you expect from each account serviced. I understand this is different for everybody, I am just trying to see what is reasonable in the industry.
What I am trying to do here, is solely create and operate the efficiency of the business, If I have to get out there and cut a lawn thats ok; but, I am really trying to learn to be the one that is operating the business in the background while employing one or two people to maintain the accounts.
Here is my gameplan: instead of putting money into all this expensive equipment, I want to hire Independent contractors to do my flyering and marketing (I will provide the material) I will pay each of my marketeers for the leads they obtain that are closed for servicing by me. Upon, gaining the accounts, I want to hire IC's to do the servicing of the lawns and have them use their own equipment. I figure that some people out there dont know how to get leads or close accounts, and with my sales background thats what I know I am good at; I can pay them as an IC to do the servicing and because I provided the work, and they will be under my business umbrella, that I can make a small percentage of each servicing.
Now, I know this is possible and can work great with the right implementation, I am just eager to hear from the more seasoned owners, am I on the right track in terms of operating my business as an entrepreunuer. I learned that there is three type of business owners: the guy who wants to work IN his business, the guy who wants to do some of the labor and then use other days to work ON the business, and then there are just guys who solely want to work ON the business for growth. I want to be number three. Any insight would be very helpful, thanks alot to each and everyone of you.

Chris

dpld
01-11-2012, 12:40 PM
no offense, but you are pipe dreaming.
the profit margin in this industry is too tight to pay people to do everything for you all while you live the good life.

i got a 23 year head start on you and my business is doing very well and the day i start focusing on living the good life instead of being actively involved in day to day operations it will be the day my business starts going backwards and eventually folds.

what are you gonna do, get a lawn for 35.00 per cut and find a sub to do it for 25.00? wow thats a 10 dollar profit and if you do that a 100 times you will have a whopping 1,000 dollars. but wait i forgot to deduct the cost of marketing and insurance.

i am not trying to mock or insult you, i am just being honest and the landscape industry is not the business for those who think they are gonna corner the market and sit back and collect the riches off of other peoples effort.

i know where you are coming from and there really is some professions out there where you can do well as a middle man but landscaping is not one of them.

sounds like what you want to do is similar to the franchise " the lawn guys" or otherwise known as "the lawn pimps" which won't be around too much longer after they have screwed enough landscapers, just like service majic.

SECTLANDSCAPING
01-11-2012, 01:51 PM
To many factors that would make this not work.

1. the best marketing is good work that leads to word of mouth referrals. Theres no guarantee that the IC will work this good and if the neighbors do ask for a estimate from them, you may never no about it. Same thing with up sells there going to ask the guy thats currently cutting the lawn about a fall clean up. Not the number on the card.

2. You would have to charge more to make a profit. With the amount of lowballers out there it will be hard to get jobs. The IC if they are equipped know they can get $35 for the lawn you pay them $25 for.

3. Since your only making a few dollars of every cut. You would need lots of sales. Not easy to do with high prices and shady work.

The only real way this would work is with a lot of clients. Even then its just dumb. You can pay a worker $10 a hour to go do 20 lawns that net $700. After paying your employee you would have over $600.

ChrisLeon
01-11-2012, 01:57 PM
I appreciate the insight gentlemen. This is what I was looking for. I know it was a long shot, and I am just trying to think bigger than normal. No offense taken by any means, and I appreciate the honesty and setting me straight. Allow me to ask this, at what point is hiring an extra man a good idea (I know this depends on the business/person) and what do you guys pay your guys to assist you while servicing a lawn that your charging 35 bucks on. Thanks !

Chris

dpld
01-11-2012, 02:52 PM
the only thing you need to focus on is just getting more clients and keep your nose to the grind stone after a while you will be able have hired help to do the grunt work.

Steve
01-11-2012, 03:15 PM
Hi Chris,

This forum is littered with the wreckage of those who had tried this. Both as the owner as well as stories from the 'independent contractors' who worked for them.

What we have seen is these businesses end up not really following the IRS rules for what an independent contractor is. The workers end up getting fired, not paid, disgruntled about it or what ever and then contact the IRS to contest their independent contractor status. That is when you as the business owner find yourself wishing you never skirted the rules on this.

Trying to hire independent contractors to distribute your marketing material, more often than not ends up with them maybe handing out a few flyers and then throwing the rest out.

You have to keep in mind, human nature is human nature. No matter what you label someone (employee, contractor, whatever) if you want them to produce, you have to monitor output or you are going to be blind as to what the real results of their and your efforts are.

Then on top of all of that, YOU are not learning all the ins and outs of the business when you take the route of trying to do it all with contractors. You are cheating yourself out of a wonderful time to educate yourself on all the intricacies of the business. The only way you are ever going to do great at any business is by knowing it and understanding it through and through.

Don't try and cheat yourself out of this great time to learn or one day you may find that 20 years has passed you by and you wonder what you did with it.

SECTLANDSCAPING
01-11-2012, 04:11 PM
Steve makes some great points too.

I would have no idea how to bid if I didnt have first hand knowledge of the work myself. I never send someone to do a job that I havent done before. If it takes me 3 hours to do a route then they say it took 5, I know there full of ****. Even employees who dont have the right equipment will cut your throat when the opportunities present itself. So it will be worst when the person does have the equipment.

Dont get me wrong though this could work with snow removal. You just have to make sure that if the person doesnt show you can cover it. The nationals do this like Brickman and USM. They also have the worst reputation in the business with contractors.

Hedgemaster
01-11-2012, 05:01 PM
When I was out of work and still debating whether or not to start a lawn care business, a guy I know wanted to hire me. (lawn care)
He found that it would be too expensive to hire me on as an employee, BUT he could hire me as a subcontractor.

(me scratching head) Wouldn't it make more sense to do this on my OWN? I mean, if I have to become my own business with insurance and whatnot in order for him to use me as a subcontractor, WHY work and give him a cut of it when I can just keep it for myself?

Ta-da! Here I am.



Note that he DOES do some of that "consultant" stuff now - finds people job leads and takes a cut of it, but I don't see it as a big money maker.

turf&tree
01-11-2012, 05:22 PM
Chris,cthis is perfect timing. I just went to an estimating seminar yesterday and I will discuss that in a minute.
Years ago I had 9 full time employees and a thriving business I built from the ground up. During my second year I took on a partner and hired some of his friends, one of which ran my maint crew whom I gave a company truck and gas card. About half way through that year I started seeing charges on my gas card from other neighboring states. I confronted him and he said I didn't know that I couldn't use it for road trips. Road trips to other states with my truck? Are you fu@$ing kidding me? A week later after firing him I did the mowing route and had neighbors asking me why I wasn't cutting their lawn today. These were people he was mowing on the side. Nice!!! Since then I scaled way back to myself and however many people I can fit into my truck with me. The estimating seminar I went to yesterday helped me confirm that my 25% profit margin I made last year is where I need to be. I am on every job, and some weeks working 7 days. My customers love seeing me and knowing I take personal intrest in their property. I have been doing this since I was 14 yrs old. That's 34 years. Yes I am 48 and love this business! I start laborers at $ 11-12 per hour based on experience. Hope this helps.
Jim

Steve
01-12-2012, 02:07 PM
Since then I scaled way back to myself and however many people I can fit into my truck with me.

Jim,

After going through that experience do you have any advice as to how to avoid such pitfalls? If you were to grow to that size again, would you do anything differently?

dpld
01-12-2012, 07:07 PM
Chris,cthis is perfect timing. I just went to an estimating seminar yesterday and I will discuss that in a minute.
Years ago I had 9 full time employees and a thriving business I built from the ground up. During my second year I took on a partner and hired some of his friends, one of which ran my maint crew whom I gave a company truck and gas card. About half way through that year I started seeing charges on my gas card from other neighboring states. I confronted him and he said I didn't know that I couldn't use it for road trips. Road trips to other states with my truck? Are you fu@$ing kidding me? A week later after firing him I did the mowing route and had neighbors asking me why I wasn't cutting their lawn today. These were people he was mowing on the side. Nice!!! Since then I scaled way back to myself and however many people I can fit into my truck with me. The estimating seminar I went to yesterday helped me confirm that my 25% profit margin I made last year is where I need to be. I am on every job, and some weeks working 7 days. My customers love seeing me and knowing I take personal intrest in their property. I have been doing this since I was 14 yrs old. That's 34 years. Yes I am 48 and love this business! I start laborers at $ 11-12 per hour based on experience. Hope this helps.
Jim



it is funny reading your post and as i do i see myself. i am 45 years old and have been doing it for as it seems forever.
i had guys going all over the place and thought i had good guys in place to count on getting stuff done and not having to be watched like infants.

it was good for a while but eventually given the chance coupled with other crappy workers they can get tainted and start off on the path of screwing you blind.

now i do all commercial properties and i just have what i would call a super crew with 7 guys including myself and we all go around together with the two service vehicles and all the fixings.
this way i am on the job and being that the jobs are big we bang them out faster and move on to the next.
i work right along with them and if i got some office work to do i can take a hour and sit in the truck and do what i got to do.
one of the things i like in this day and age is the ease of a mobile office, i have everything i need and with my android phone setup i can do everything paperless as well as send it right to the office into the mother ship.

i rarely have to deal with much during the day and when i do it usually is a few quick calls and back to work.
when i changed direction a few years back my goal was to make as much money as possible with the fewest customers which is why i do commercial.
i only got to deal with 10 bills for 10 clients in 10 different locations its like my hermain cain 10-10-10- plan (not really). i must say they are 10 large properties so its not easy by any stretch but all i have to focus on each year is keep those 10 clients happy as a clam and always keep the feelers out for next year on other accounts in case you get low balled and lose one. but being i deal with management co's they take care of most of that for me so i never really have to deal with customers and phone calls too much.

when i used to be all residental i had 120 accounts and OMG the crap on a daily basis i had to deal with from people who thought because they paid me a couple hundred bucks each month that i was responsible for all the wrong in the world.
the phone calls and constant clammer from these people and the billing was horrible and some paid right away and some took weeks and you always kept number totals like what i made this month and how much of what i actually made that i have in hand amount and the what is still owed to me in the past due amount.

its hard and it took a long time but at this point in the game i can not be bothered sucking up to someone for a couple hundred bucks a month and deal with their stories and complaints.
for the rare occassion i have to meet with a client that pays me 9 G wizzes each month over a issue or concern i find it no problem having to grease his carrot.

as they say money talks.

Steve
01-13-2012, 03:37 PM
it was good for a while but eventually given the chance coupled with other crappy workers they can get tainted and start off on the path of screwing you blind.

What kind of issues did you see that others should look out for when they turn their employees loose?

turf&tree
01-14-2012, 09:48 AM
Steve, to answer your questions. If I ever wanted to grow, which I do NOT.
I would do strict background checks including credit and drug testing with a zero tolerance.
Next a thorough employee manual including the ability to fire someone even if they looked at me the wrong way.
Lastly I would find out just how I would be able to legally discriminate against having to hire someone I did not think would be a good fit. Honestly I hate visible tattoos, and piercings of any kind on guys. Why would you put those hideous black fender washers in your ears? Or take the chance of chipping a tooth with a tongue piercing?
We work with great clients, some older and some younger and non of them have any of these things.
I would store fuel at my location or do all of the fueling myself. I have had gas stolen in the past.
Let's see what else, no more company trucks to take home. No lending of tools.
Like I said it is hard to say what I would do if I grew because I refuse.
Jim

dpld
01-14-2012, 10:53 AM
What kind of issues did you see that others should look out for when they turn their employees loose?

things are a little different now because of the changes i made by having all my workers with me during the day instead of being divided up so that helps a lot.

but i found that when i had two brothers working for me it was a little difficult at times.
the younger brother was the actual landscaper and had a good deal of experience and he got his older bro a job and some of the problems i had was the younger brother had a problem telling his older brother what to do and when to do it.
i had times when i would insruct them where i wanted them to start the day and end up, basicly a planned route so i could know where they were as well as the route was set up like a big loop with no back tracking to save time as well as mileage on the truck.
well, the older brother would to some degree bully his younger brother with the family senority and decide, " lets go this way so i can stop and get lunch " and completely screw up the route and make tracking them down difficult.

i find it is very important for your employee's to get along and have a good relationship but at the same time too much of a good thing can be a problem.

there are so many things that can be a problem as well as every situation is different so it is hard to rattle off a list of things to look out for because i have seen brothers work well together so the two clowns that worked for me do not represent all related employees.

i had one dude that worked for me as a foreman and for the first 3 weeks he did well and after that his days slowly got longer and longer with the same route.
it was late spring so the grass was still growing fast and it also coincided with a fert app from a few weeks prior so with the bagging it took longer which was expected and believable.

but then we got into july and some home owners ( when i still serviced home owners ) were asking to take a week off because the grass slowed down and this dude was still coming in with a hr extra each day and that is when the BS started to flow.
his excuses where, the mower was giving me trouble and the truck was running funny and the string trimmer died and i fixed it.
it got to the point that every day it was something.
keep in mind that i was sending this dude out in a brand new set up it was like three months old when he started.
the truck, trailer, two riders, one walk behind, 3 trimmers and 2 back packs and everything else was brand new.
at first i gave it the benefit of the doubt because i have bought new things in the past that gave me trouble but every dam thing in the set up was brand new and according to him it was giving him trouble.

i knew he was playing games and before i jumped to conclusions i had my trucks set up with the gps tracking and none of them knew about it.

well, as it turns out they were going to his house everyday for lunch 3 towns away from the closest job and once a week he was actually cutting his lawn while he was there.
he also had a little side gig with about ten lawns that he was mixing in with my route.

but in the end i had him and 2 laborers stiffing me out of 2 hrs a day X 3 guys X 5 days a week plus fuel for the cuts on the side and the out of the way driving plus they were sand bagging my jobs to get them done quicker to have more time for themselves and the side work.

i kept a log of all the addresses he was servicing with the dates and times as well as extended lunch breaks at his house and with the gps i could also tally the mileage.
i decided that tomorrow which was friday i would let them finish the route for the week as well as it was pay day and at the end of the day i would send them packing and then give myself the weekend to forget about it and get back to the grind on monday.

what was even more bizzar and coincidental was i saw a new stop on his route, a place he never went to before and he was there a while so i was really curious as to what they were doing and i got in the truck and zipped over to where they were and he actually had the balls to unhook my trailer and leave it at one of my customers houses and take the dump truck and go get mulch and do a mulch job.

i was like, that's it. i pulled into the driveway and got out of the truck and calmly walked up and said, make sure you hurry and get this finished and go back and get my trailer where you left it and make sure everything, i mean everything is done before you come back, and don't come back if it is not done.
and then i left.

come 5:00 they came back all quiet and with those long azzed sorry faces and being that i pay every two weeks and it was friday i told them i would give them their checks and that i would file charges against them for stealing my equipment and truck. the one guy said, your gonna do that for doing a mulch job on the side? then i slapped the log of everywhere they been the last 6 weeks on the desk and said, and for this too.

you want to talk about seeing 3 guys turn white as a ghost in 2.5 seconds. they were floored.
so i totaled up what they made with my stuff over the six weeks period includeing the mulch job and deducted the hours i would have paid them and they still owed me more money then they each had coming from their 2 week paychecks .

so i said, you forefit your 2 weeks paycheck right here and now and walk away with no job and no money and i won't call the cops on each of your azzes or you can take your checks now and still have no job and we can settle the rest in the peoples court.

they chose to cut their losses and run but it is amazeing how you can have 2 guys work for you for a season and they were fine and good and then i add one bad apple and he corrupted them and in the end cost them all their jobs.

my only advice would be don't think it can not happen to you and never say never.

Steve
01-16-2012, 01:48 PM
That is an amazing story and it gives a great heads up of things you gotta watch out for.

when i used to be all residental i had 120 accounts and OMG the crap on a daily basis i had to deal with from people who thought because they paid me a couple hundred bucks each month that i was responsible for all the wrong in the world.


This is another great point you made that I think effects A LOT of newer lawn care business owners. So often we hear stories on here of lawn care business owners banging their heads against the wall because thy have such a difficult time dealing with their customer base. Maybe instead of dealing with a group of problem customers, they should consider going the route you took.

Ultimately would you say it's up to the business owner to find the type of client base that will work best for them?

CHEESE2009
01-16-2012, 10:22 PM
I have an idea.

You could pay one employee a set amount. He will be responsible for hiring/managing his own assistant, along with refueling, etc. If he plans on working alone, fine, as long as the work gets done.

If he comes to you saying he used up all the money you had given him, fire him if his excuse doesn't amuse you.

Sure he could use up all the money on a shopping spree, but then you take his arse to court. A good contract between this employee should keep you safe.

What do you think?

Steve
01-17-2012, 03:57 PM
I am leaning more towards keeping things as structured as possible.

When you can create policies and structure that works for you and your business, you minimize the element of having an employee who has their own view on how your business should run, based on their lack of experience in the field.

I think it is better when you know what you want and how to get those results and you have policies to repeat those results every single day.

dpld
01-17-2012, 06:36 PM
That is an amazing story and it gives a great heads up of things you gotta watch out for.



This is another great point you made that I think effects A LOT of newer lawn care business owners. So often we hear stories on here of lawn care business owners banging their heads against the wall because thy have such a difficult time dealing with their customer base. Maybe instead of dealing with a group of problem customers, they should consider going the route you took.

Ultimately would you say it's up to the business owner to find the type of client base that will work best for them?

without a doubt it is up to the business owner but at the same time every situation is different.

guys starting out have to lean towards taking everything that comes their way to get ahead so for them the process takes more time and effort and leaves them little room for picking and choosing.

working residential lawns is perfectly fine and you can build a very lucrative business doing just that, i did for 16 years before i made the switch.
it all depends on what direction the particular business owner wants to take and if you are starting out there really is only one route unless your flush with cash and that is residential.

i made the switch because i leveled out and i could not make no more unless i wanted to send out additional crews because my time was allready maxed out with the customers i had.
in the past i had crews going out and it just led to other issues and it seemed all i was doing was putting out fires.

i never wanted to have a big business but i always wanted to make good money so the way i do things now gives me a happy median.
i was able to increase my businesses income without haveing to increase my work force.
another reason i wanted bigger jobs and less customers is that after all the years of interacting with the customers i was getting burnt and this way i have less clients to deal with.

it is not easy by any stretch and the competition is just as feirce and it also depends on where you live.
i am lucky because where i live it seems that every company on the planet has a corporate headquarters or office in my county so that helps me out a ton.
when i started out i wanted to keep it simple and i never thought about being a manager so to say and just direct people and i still don't but i came to realization that at 45 years old i have to start thinking about when i can not physically do the work no more.
this business is my retirement and my pension and i need to make sure it will provide me income until my last breath as well as carry my kids if they so choose to take it over one day.

i had a older good freind who had a nice little business going with just him and 2 workers.
he was at it a long time and for a three man operation was making some good green.
he had nice newer equipment, trucks and trailers and he was just as professional and equiped as anyone could be and the only comparison you could even make between him and another company would purely be based on size, which don't matter anyway.

he built a great business that made good money but his only flaw was that he built something that without him would come to a stop.
and so it did one day when he just dropped to the ground and died.
his wife was not really involved in the business and was completely blindsided by his sudden departure.
his kids were still too young to know or do anything and because he wanted to keep it simple and do it all and just have basic laborers, he had no one in place to help keep it going.
long story short the wife ended up having to sell everything and disolve the business and now she lives a very financially unstable life as a result.

i am not saying that everyone who starts a business has to think this way but when you get older and you been at it a while you do and my path is just a evolution of 22 years in business and if you told me 22 years ago what i would be doing today i would have told you you were crazy.

we like to think we don't but we all change as we get older in how we think and what we consider important.

USA Lawn Care
01-18-2012, 05:16 AM
Hi Chris,
I currently operate using subs so this may be of interest to you. First....yes, it is 100% possible and I'm living proof. Above all else, keep that in mind.

Now......based on the info you gave....
#1 I would scratch the idea of getting people to market for you / paying them for each lead, etc. You can put in a little time, marketing with a little money and get results, which will turn into customers, which will multiply slowly with referrals, next door neighbors, etc. If the correct ad in a good location can get you 4-5 customers over the course of a season......multiply the # of ads out and in turn, multiply the amount of customers you can get. With your idea, you will have no idea if it's the person selling the job or the ad that worked......or vice versa.

#2. You said you finished your first season. I would work on your marketing, and as you gain new clients, work as much as you can (gaining experience) to where you can price yards accordingly and extra work accordingly. You should not be 'new at this' still when looking to sub and confidence comes with running your own business first. Maybe get at least another season (or two) under your belt and get some good 'ol blood, sweat and tears put into your company. Nothing beats experience.

#3. Then, and only then, go talk to your insurance guy and let him know what you are planning to do (I met with mine again today). Insurance for me alone for the year is $500 ($1 mil coverage) and my truck under a commercial policy is $1000 so right about $1500. My minimal equipment is used so only a little bit I have actually chosen to have covered for replacement (keeping costs down)

#4. You can advertise on Craigslist in your area to find subs. You will be able to weed them out by their responses (who offers proof of insurance, referrals, how long they've been in business, etc.) One ad this past week (looking to expand again in 2012) got me 25 responses back from solo ops, large crews and everyone in between looking for 'fill in' work. Now begins the interviewing / looking at their operation, etc.

#5. I'm paying/keeping right about 80/20 of revenue. I still mow a few favorite customers because I still love being outdoors and completing the job and getting paid right away (or prepaid for the month).

#6. I've gone the '2 trucks, 2 crews, crapload of equipment, crapload of financing, crapload of payments, crapload of headache' route long ago. Right now I am not limited by 'how far can I drive to stay profitable' scenerio. I have accounts all around the area and outside my immediate area to places I would never consider taking an account. BUT.....I have reliable crews in each area.

#7. This one I believe to be very very important. I am limiting how many accounts any one sub has. Yes.....it means more subs. BUT....the risk is extremely minimal. A sub who gets 5 yards to mow has no effect on the other 200. When it's going to be a crappy week for weather, it's not that hard to work my 5 accounts in. Give someone 20-30 and it could be a problem. Think of it like the stock market and I have basically invested my money in a lot of different stocks. Things will fluctuate minimally but I haven't banked all my money on a couple crews doing their job just like I hope no one puts all their money in 1-2 companies on the stock market.

#8. Yes, a lot of folks have tried this and it has not worked. I have tried to work out and eliminate the reasons that have caused it to not work for others and I know what makes the subs tick. I was once one years and years ago so I've seen it from both sides of the fence (again...experience). A friend of mine is doing the exact same thing with janitorial services in and out of his area. Same concept.

Hope this helps.
It can be done....just go SLOWLY.
Look at it this way. It's pretty hard to quickly build up to 500 clients and what it takes to mow 500 clients. It is not hard for 100 I/C's in 100 areas to service 5 yards each.

USA Lawn Care
01-18-2012, 05:31 AM
I will bump onto what DPLD stated right after your original post. You need to stay up on the day to day operations, just as you would if you were running the crew and doing the work. Now....as with me....your risk would be spread out across the I/C's.
Then there is 'which crew can do snow removal'......'who can do cleanups, mulching, etc' questions that arise.
I don't think you stated that you wanted to sit on the beach and do nothing so I will assume that you still want to run and grow the business.....which I think is a great idea. Don't throw away your work boots just yet :)

dpld
01-18-2012, 09:16 AM
I will bump onto what DPLD stated right after your original post. You need to stay up on the day to day operations, just as you would if you were running the crew and doing the work. Now....as with me....your risk would be spread out across the I/C's.
Then there is 'which crew can do snow removal'......'who can do cleanups, mulching, etc' questions that arise.
I don't think you stated that you wanted to sit on the beach and do nothing so I will assume that you still want to run and grow the business.....which I think is a great idea. Don't throw away your work boots just yet :)


growing a business has a lot more to it then finding client's as well as a guy useing subs will need three times the work to make what a owner operator will.

my costs for payroll, taxes, insurance, equipment, fuel and etc etc eat up about 45% of what i make each month the remaining 55% is the businesses and mine free and clear with the exception of income tax.
so if you or the OP are or would only be making 20% i would hope that you would be sitting on the beach.

also the middleman business is losing ground in this country today and thats what being in business useing subs is.
people want to know the company they hire is going to show up top do the work not some hired minnion.
people are also aware that anyone who uses subs and does not do everything in house has a larger mark up.

plus from a competitive point of veiw there is no way you can compete in a price war because if you got to knock off 10% to get a job it is gonna directly impact you or your sub and being your subs are allready working for a discount will they work even cheaper?
and if not you will.

you still have to deal with the customers and all their baggage and you make less for you trouble and have less control in telling your subs how to do their job.
your liability is just as high and it may drop your initial rates from a insurance premium perspective but it raises your risk vs profit ratio and useing subs the likelyhood of a incident dramatically increases and regardless of what he does if someone wants to file a suit you can expect to be one of the names in that suit as well as crap flows downhill and being you are at the top of the chain it will hit you first.

i really enjoy this topic and love to discuss subjects like these and my replies are in a point, counter point format so please don't take any of my comments the wrong way or even as a insult.
i just feel when you discuss things that all angles must be considered to make a better choice as to what would be best for you in what direction you would go.

the bottom line is that yes it is possible but at the same time the concept is not new and in some industries it is very lucrative way to do business but in the lawn care industry it is far too competitive to account for too much mark up and most clients want a more direct relationship with their hired contractors.

thanks for reading.

USA Lawn Care
01-18-2012, 07:35 PM
Great post, Dlpd.
Your points are all valid. Yes....more accounts are required subbing which is also how my business runs. Basically, less profit on each account but more volume and it all adds up nicely. But.....I have posted before trying to find different companies' profit margin. You are doing very well if you are at 55% before taxes. Congratulations. I hear a lot of 10%-25% profit margins being reported. I'm at 20% or a hair under. As for having to discount to get the job (therefore creating a very low price for my sub and having a sub that's not happy)...I do not discount. There is way too much work out there. I am right in the middle of price ranges. I also do not have to bump my price up. I have basic fair prices and my subs know that and are more than willing to accept 80%. Pricing is a delicate situation though. I have to avoid not undercutting and I have learned to just price it, stick with it and the customer will either take it or leave it. Since most customers come from referrals, they already know the price their neighbor is paying so they know what to expect. It's a numbers game getting clients. I have enough advertising out there in enough different locations that I do not have to rely on my immediate area so do not have to worry so much about if one potential customer in my area wants a lower price.

Also.....our businesses are totally different so yes, there are different options. Running crews, owning equipment, all that.....it's a great way to make a living and I did it and, if I had to, could and would do it again. This time around I have simply chosen to tame a different lion. Thanks for keeping the conversation civil and looking at it from different angles. ;)

dpld
01-18-2012, 09:22 PM
have you ever tried to get any corporate settings?
it seems you got a good niche going and should target the big properties.

the pay days are bigger which in turn increases your cut but it would be far more attractive to quality subs contractors where they take care of a couple jobs and they are set for the year.

USA Lawn Care
01-18-2012, 10:07 PM
staying away from commercial for now.
did them years ago but they are unpredictable year to year when new management comes in and decides to 'cut the budget'. I think I had a few businesses and a couple big churches with schools at the time.
Residentials I find are loyal but you never know.....if a commercial account comes up, maybe I'll bid on it.

Steve
01-19-2012, 04:05 PM
By using sub contractors, aren't the costs increased when you combine all of them in order to perform the job?

For instance, for this to work, don't you and your subcontractor have to have liability insurance? So wouldn't that double the amount of insurance payments to perform the same work one company with one insurance payment can perform?

USA Lawn Care
01-19-2012, 10:36 PM
we both already have liability insurance. It is a one time set cost per year for me as with the sub'd crew whether he's mowing his yards or mine. It's not adding anything 'extra' to the sub's cost because either way, he's working whether it's for me or himself.

I need liability anyhow because I am already out there working a little bit.

We both also own trucks and some equipment. That does not double the cost of doing business. If we both worked together on the same job for one fee, then, yes, the cost actually doubled. But it doesn't work that way.

My costs stay the same. All I am choosing to do is to make less $$ on a job. My cost did not increase due to anything (insurance, etc.) except for my fee I pay my sub...but my profit was, in fact, decreased. However, again, I make it back up in volume.

And, actually, some costs were totally eliminated. Fuel, equipment usage, salary paying an employee....all have gone out the window. The sub soaks up those costs running his business.

I have set costs for running the business that, once covered, equal profit. It would be the same for someone who has to pay all their company bills for equipment, a building, salaries, etc. and what's left over is profit.

Again, I am taking less profit per job, however it has given me a chance to gain more business outside my immediate area than I would have been able to gain unless I built another pole barn, bought more equipment and added a 2nd and 3rd and 4th physical location and hired employees for each location. I have all these accounts out there where I would have never been able to service them in the past. I turn down nothing because it is 'out of my area' and once I have a yard in an area with a reliable crew or solo op mowing it, then I am free to advertise in that particular area and therefore pick up more accounts.
It has actually snowballed my business, subs have minimum amounts of yards to cut so no one crew has a chance on stealing or destroying my business. A guy mowing 60 miles away from me only knows about the 6 that he is mowing. The key is the interview process. There are tons of honest people out there simply looking for a little extra work. I am helping them and they are helping me.
Say a particular company is making 25% after all expenses and is mowing 100 lawns and that is all they do because their area is saturated and everyone is having a hard time being undercut with lowballing.
$100,000 gross....$25,000 net.
If I'm choosing to make 15%-20% I do have to get more lawns to make what this guy is netting. However....i am not stuck in my area. I can do that in my area and 60 miles outside my area in a complete circle (where no other company around me will travel) and I have multiplied my business many times over by being able to dip into specific areas one yard at a time.

I can spend all my time now (except for a little mowing I enjoy to still do for favorite longtime customers) running the business without worrying about getting my blades sharpened for 10 mowers before the guys show up for work, without the worry of being broke into again and equipment stolen, etc. I am very very busy keeping track of everything....I have simply chosen to eliminate some of the work.

Thanks for the question.

USA Lawn Care
01-20-2012, 08:49 AM
A few more points while I just thought of them:

1. Just to reiterate....I am not saying my way is better.....just different.

2. Here's another crazy thing I was able to do. A current customer was talking about her mom who lives about 1 1/2 hours away and mentioned she would be needing her grass cut last season. The current customer would be paying for her mom's yard mowing. The friend/customer described the yard to me and said "it's pretty much the exact same size as ours". I told her that I would charge her the same price she was getting for her yard as long as there was nothing crazy going on with the yard. I looked it up on Google Maps just to confirm that it was an easy, flat cut. Next morning, I ramped my mower, etc. into the back of my truck, drove the 1 1/2 hrs, got breakfast, cut the yard and took a leisurely drive back home. An easy straight forward cut. It was mid summer so knowing I had a week to 10 days at least before it was mowed again, I then found someone in her immediate area to cut it for me. The little old lady talked to me when I was down there and knows that the guy mowing it now is 'one of my guys'. Am I making a lot on that? Nope...but I'm making some that I would never have had and it is steady income that all adds up. PLus, I am now exposing my company to the possibility of picking up next door neighbors and referrals from the new client and can advertise in that area because I am already there working (sort of). Someone else's business might make a quarter off each of 4 customers ($1). I make mine by 5-6 customers giving me 18-20cents......without me having to 'hold the truck up 20 minutes because my employee is running late', or deciding if my guys will call in sick on Saturday when they know they have to work because of a wet week, or any other crap that every owner / operator deals with.

3. The nice thing also is that I get to deal with the actual owner / ops who are the guys that are busing their butt to make a living and are just like me. The employees I always would want to hire are the one's already working for themselves. In a sense.....I now get to hire them (GopherLawnForum readers). You think employees read this stuff? Nope. It's the business owners. Those are the people I'm lucky enough to work with.

4. Also what I did was find another guy to mow if something happened to my current sub. The key to this is never giving anyone too much control. I always have a back up plan and someone ready if sub#1 has an emergency come up. By limiting also the # of yards each can mow, if I have to have sub#2 cut sub#1's yards for 2 weeks....it's only another 5-6 to add to his route and shouldn't be a problem. What happens if sub#1 has 30-40 yards of mine to mow and he breaks his leg? Who's going to be able to cover that with a quick phone call? It won't work. It's all about being absolutely prepared. I just ask the subs "if need be can you handle 5 or 6 more for a couple weeks if an emergency comes up?" It's not a problem and I've confirmed that they can handle it. There is a ton of thinking and planning involved but every business should be thinking of worst case scenerio's and how to handle them without their customers knowing about it or being effected by it in anyway.

dpld
01-20-2012, 09:36 AM
i forgot to ask you usa lawn care, do your subs have your name on their truck or theirs?

USA Lawn Care
01-20-2012, 10:47 AM
No company markings from them or me on their trucks. And, yes, I know that can sound like a dumb idea but it is what it is and there are a ton of crews out there with no markings on their trucks that do just fine.

In a perfect world, yes, i'd love to have my name all over their trucks but it's just one of those things that's not going to happen because they are driving around the corner from my job to theirs or vice versa.

I just changed to a really nice logo so wasn't going to put something out there that I was just going to change anyhow. The new logo will soon be on everything else I own, though.

As long as they have descent equipment, clean truck, etc it is all fine I guess.

dpld
01-20-2012, 11:06 AM
No company markings from them or me on their trucks. And, yes, I know that can sound like a dumb idea but it is what it is and there are a ton of crews out there with no markings on their trucks that do just fine.

In a perfect world, yes, i'd love to have my name all over their trucks but it's just one of those things that's not going to happen because they are driving around the corner from my job to theirs or vice versa.

I just changed to a really nice logo so wasn't going to put something out there that I was just going to change anyhow. The new logo will soon be on everything else I own, though.

As long as they have descent equipment, clean truck, etc it is all fine I guess.

what state do you live in?

my state nj has a law that any commercial vehicle must have a name on it as well as if the cop feels you are useing a non commercial plated vehicle for commercial purposes you can get slammed as well.


even if other guys are doing it, i don't think you should because you need to do things that seperate you from them.

USA Lawn Care
01-20-2012, 11:40 AM
my truck has commercial plates on it as do theirs (I would guess to be covered by commercial insurance...which i require...they would need to get commercial plates.)

I will check out what you said though about having to have a logo on a commercial vehicle.

dpld
01-20-2012, 12:00 PM
my truck has commercial plates on it as do theirs (I would guess to be covered by commercial insurance...which i require...they would need to get commercial plates.)

I will check out what you said though about having to have a logo on a commercial vehicle.

just figured i would give you the heads up in case things are the same there as here.

Hedgemaster
01-20-2012, 02:57 PM
what state do you live in?

my state nj has a law that any commercial vehicle must have a name on it as well as if the cop feels you are useing a non commercial plated vehicle for commercial purposes you can get slammed as well.


even if other guys are doing it, i don't think you should because you need to do things that seperate you from them.


Well, you do live in NJ. ;)


I chuckled the first time I noticed that and your avatar at the same time. :D




Seriously though, yes, it's always good to look into that sort of thing because it can vary wildly from location to location.
In PA, I do not have to register my truck as a commercial vehicle unless I have employees that will be driving it. My auto policy remains unchanged from before I started my business - all coverage is same, no increase in price. (trust me, I triple checked this info before I started) The only way it would change is if I titled my truck as a commercial vehicle, or as above, have employees who will drive it.

As for "truck lettering" - in this state, if your business makes over "$x"/yr, you must register with the state. (I think it's $70/2 yrs to register) If you have any lettering on your vehicle, you must include your "PA#" on the vehicle as well. (That actually goes for ANYTHING that has your info on it - bus cards, invoices, ads)

dpld
01-20-2012, 03:21 PM
Well, you do live in NJ. ;)


I chuckled the first time I noticed that and your avatar at the same time. :D




Seriously though, yes, it's always good to look into that sort of thing because it can vary wildly from location to location.
In PA, I do not have to register my truck as a commercial vehicle unless I have employees that will be driving it. My auto policy remains unchanged from before I started my business - all coverage is same, no increase in price. (trust me, I triple checked this info before I started) The only way it would change is if I titled my truck as a commercial vehicle, or as above, have employees who will drive it.

As for "truck lettering" - in this state, if your business makes over "$x"/yr, you must register with the state. (I think it's $70/2 yrs to register) If you have any lettering on your vehicle, you must include your "PA#" on the vehicle as well. (That actually goes for ANYTHING that has your info on it - bus cards, invoices, ads)

it's pretty amazeing how things differ from state to state.

your comment went above my head and i appologise for being a little slow but i thought my avatar was a american flag? or at least it appears that way to me.

Hedgemaster
01-20-2012, 04:21 PM
it's pretty amazeing how things differ from state to state.

your comment went above my head and i appologise for being a little slow but i thought my avatar was a american flag? or at least it appears that way to me.


Heh. That's the irony of it. If I'm not mistaken, you aren't allowed to pump your own gas, and your rights as gun owners are abysmal.
Sort of the way many view California as "not a part of America"... that was where my mind was going.

;) Just some light hearted humor. I make fun of my Canadian friends as well. :p

dpld
01-20-2012, 06:27 PM
Heh. That's the irony of it. If I'm not mistaken, you aren't allowed to pump your own gas, and your rights as gun owners are abysmal.
Sort of the way many view California as "not a part of America"... that was where my mind was going.

;) Just some light hearted humor. I make fun of my Canadian friends as well. :p

the gas pumping thing aint no big deal because on a cold snowy night it is nice to stay warm in the truck while habeeb fills her up for me.
it really don't matter anyway because when you pull in with your trailer and equipment to fill, good luck finding someone to help you and its self serve anyway.

as far as guns go i got my share and as long as you go through the legal proccess it aint no big deal.
we must be some part of america judgeing by how many PA plates i see on I80 everyday going to work in jersey.

its cool, new jersey always finds itself the brunt of most jokes.

Steve
01-23-2012, 12:08 PM
you must include your "PA#" on the vehicle as well.

What does that mean? Is that Pennsylvania #?

dpld
01-23-2012, 02:45 PM
What does that mean? Is that Pennsylvania #?

probably means pesticide applicators number.

dpld
01-23-2012, 02:58 PM
Heh. That's the irony of it. If I'm not mistaken, you aren't allowed to pump your own gas, and your rights as gun owners are abysmal.
Sort of the way many view California as "not a part of America"... that was where my mind was going.

;) Just some light hearted humor. I make fun of my Canadian friends as well. :p

as far as california is concerned i could understand it not being considered to some degree of what you say " not part of america " as far as the early years of our country goes.
but to consider nj " not part of america " i would suggest you open up a history book and learn a little bit about the garden state.

the most critical battles and victories in the revolution war happened in nj as well as the first president of the united states was headquarted 5 miles from where i live.
remember the crossing of the deleware? it was not PA they were trying to get to.
nj was actually one of the first thirteen states of the united states and was actually declared so 17 years prior to PA.

i figured i would chime in on a little history to try and sway your opinion of nj, ha ha ha.;)

Hedgemaster
01-23-2012, 11:06 PM
What does that mean? Is that Pennsylvania #?


Yes, "PA" = Pennsylvania.

Pennsylvania Home Improvement Contractor number (PAHIC#)
http://www.attorneygeneral.gov/hic.aspx

Must landscapers register?
Landscapers whose work is limited to services performed under Pennsylvania's Plant Pest Act do not need to register. However, landscapers who perform other work at private residences including, but not limited to: the placement of retaining walls, fountains or drainage systems, or the construction, replacement, installation or improvement of buildings, driveways, swimming pools, porches, garages, roofs, siding, insulation, solar energy systems, security systems, flooring, patios, nondecorative fences, doors, lighting systems, concrete walkways and windows must register and comply with the act.


I believe that if I were to ONLY mow lawns and such, I wouldn't need to register, but since I started out doing lawn care AND handyman work, it was required. As shown in the quote above, the listed work provided by most landscapers would require them to register.





The pesticide thing is a whole other ball of wax that I've not yet decided when I'm getting involved in.

ChrisLeon
01-24-2012, 12:12 AM
Hey everyone, Sorry I have not been so involved in this particular thread, been rather busy. First off, I appreciate everyone's insight. This made for a pretty good conversation. In regards to USA Lawn Care, thanks a bunch for those awesome tips. I know this business model may not be "ideal" for some, but the way I look at it is; I don't want to end up operating a waterfall (where if I am not there, it all falls apart) By concentrating on being a business owner and operator it will allow me to grow the business and let me be good at what I am good at (organizing, selling, customer service, etc) Like you had mentioned USA, I most definitely will be apart and realistically, the force behind the growing of the business. That will be my JOB, while the IC's JOB is to cut the lawn, mulch, fert, so on and so forth. It would be silly of me to think I can pawn off running a business to someone who thinks like an employee. That is actually the point, I want to be an employer, and not an employee. I know so many people out where I live that just want to show up to work and get their steady paycheck and know they got a secure gig. That's great, but that lifestyle isn't for me.
With all the money I made from this past season learning in the trenches by myself, I anticipate using this money for marketing (postcards and door hangers) and try that route. I appreciate your suggestion (USA) on maybe giving myself a couple more seasons before I run off and sub out the work. I definitely need to learn how to price out the jobs better. I am going to specifically try the door hanger and postcard route and see how it goes. Is it wise to have a marketing campaign that spans along the whole season? I noticed in my area all the lawn service companies market HARDCORE in the beginning for mulching jobs, dethatching and what not, and then the marketing seems to disappear? I am assuming this is due to locking in customers with the aforementioned; What do you all think?
In regards to your #4 tip, If I am to sub out IC's to do my servicing of the accounts, should I be requiring these gentlemen to be insured with their own policies? Do I need to insure them under my policy? I have actually yet to get a policy, so I have no idea what that entails. Before I get scolded at through the written word, I don't have insurance yet cause my first season operation was less than 12 clients and I was just learning. It seems by all this talk that INS is crucial in this business and I am going to look into it, especially when I restructure the business to an LLC and I begin implementing this business model. :)
#7 tip was genius. I did not think of that at all. I wouldn't mind having a bunch of IC's. In my mind, that is just helping out the economy and job growth :p Here is a two-part question for you; you said you know what makes the "sub's tick", what exactly makes them tick? Second, how do you pay an IC so they feel they are earning a decent wage, but, as an owner, i'm not losing my ***. I know its all about the volume so if I am cutting a lawn for $25-$35 a wk (avg out in my area) what would your suggestion be?
Oh, and also, when hiring out IC's I am thinking its better to hire guys with their own equipment right? Last thing I am thinking in my mind is to have all this overhead in equipment for them to just treat it like ****. I figure if they use their own they will take care of their equipment which will ensure the proper cuts of the accounts.
I have never hired before and this business model may seem to be a bigger bite for me to chew, but as you advised I will take this slowly and grow with the business, i am 25, I got time to grow :D One last question, when I hire my IC's should I be looking for the guys that do lawn servicing already or should I be hiring someone who I think is capable of offering a quality honest service (i know I wil have to weed through alot of IC's before I get this one right) My gut tells me I should be hiring some guys that have the tools, meaning a truck or trailer and a mower and a trimmer or whatever but do not have the heart or ambition to go out and start their own lawn care gig. I feel I would be looking for the guys that are just interested in making a few extra frogskins. Thoughts? Ideas? Suggestions? Thanks all! You guys make this forum being a pleasure to be apart of. :cool:

dpld
01-24-2012, 08:29 AM
Hey everyone, Sorry I have not been so involved in this particular thread, been rather busy. First off, I appreciate everyone's insight. This made for a pretty good conversation. In regards to USA Lawn Care, thanks a bunch for those awesome tips. I know this business model may not be "ideal" for some, but the way I look at it is; I don't want to end up operating a waterfall (where if I am not there, it all falls apart) By concentrating on being a business owner and operator it will allow me to grow the business and let me be good at what I am good at (organizing, selling, customer service, etc) Like you had mentioned USA, I most definitely will be apart and realistically, the force behind the growing of the business. That will be my JOB, while the IC's JOB is to cut the lawn, mulch, fert, so on and so forth. It would be silly of me to think I can pawn off running a business to someone who thinks like an employee. That is actually the point, I want to be an employer, and not an employee. I know so many people out where I live that just want to show up to work and get their steady paycheck and know they got a secure gig. That's great, but that lifestyle isn't for me.
With all the money I made from this past season learning in the trenches by myself, I anticipate using this money for marketing (postcards and door hangers) and try that route. I appreciate your suggestion (USA) on maybe giving myself a couple more seasons before I run off and sub out the work. I definitely need to learn how to price out the jobs better. I am going to specifically try the door hanger and postcard route and see how it goes. Is it wise to have a marketing campaign that spans along the whole season? I noticed in my area all the lawn service companies market HARDCORE in the beginning for mulching jobs, dethatching and what not, and then the marketing seems to disappear? I am assuming this is due to locking in customers with the aforementioned; What do you all think?
In regards to your #4 tip, If I am to sub out IC's to do my servicing of the accounts, should I be requiring these gentlemen to be insured with their own policies? Do I need to insure them under my policy? I have actually yet to get a policy, so I have no idea what that entails. Before I get scolded at through the written word, I don't have insurance yet cause my first season operation was less than 12 clients and I was just learning. It seems by all this talk that INS is crucial in this business and I am going to look into it, especially when I restructure the business to an LLC and I begin implementing this business model. :)
#7 tip was genius. I did not think of that at all. I wouldn't mind having a bunch of IC's. In my mind, that is just helping out the economy and job growth :p Here is a two-part question for you; you said you know what makes the "sub's tick", what exactly makes them tick? Second, how do you pay an IC so they feel they are earning a decent wage, but, as an owner, i'm not losing my ***. I know its all about the volume so if I am cutting a lawn for $25-$35 a wk (avg out in my area) what would your suggestion be?
Oh, and also, when hiring out IC's I am thinking its better to hire guys with their own equipment right? Last thing I am thinking in my mind is to have all this overhead in equipment for them to just treat it like ****. I figure if they use their own they will take care of their equipment which will ensure the proper cuts of the accounts.
I have never hired before and this business model may seem to be a bigger bite for me to chew, but as you advised I will take this slowly and grow with the business, i am 25, I got time to grow :D One last question, when I hire my IC's should I be looking for the guys that do lawn servicing already or should I be hiring someone who I think is capable of offering a quality honest service (i know I wil have to weed through alot of IC's before I get this one right) My gut tells me I should be hiring some guys that have the tools, meaning a truck or trailer and a mower and a trimmer or whatever but do not have the heart or ambition to go out and start their own lawn care gig. I feel I would be looking for the guys that are just interested in making a few extra frogskins. Thoughts? Ideas? Suggestions? Thanks all! You guys make this forum being a pleasure to be apart of. :cool:


good luck with everything and to answer one of your questions, yes your IC's need their own insurance and if you insure them they would be your employee which would also result in you needing workers comp.
insureing IC's would defeat the purpose of haveing them to begin with and the whole purpose of useing IC's is to distibute the liabillity as well as the work load.

also, whether you are starting out or a seasoned veteran and whether you have one account or a hundred YOU NEED INSURANCE there is no means to justify not haveing it.
anyone working without it is asking for trouble and in the end if something were to happen it will destroy you financially.

my question to you would be do you actually have any prior experience in the industry before you started your business?
did you work for a established company prior to starting your own business?

i am not trying to belittle you or anyone for that matter, it is just a observation i have noticed on this site with a lot of new and younger guys that seem to bypass one of the most critical parts of being successfull in the business as well as paying your dues.

i am not saying this is the case with you because i don't know you but it seems today younger folks in general want to go from nothing and go straight to being the owner of a business and learn on the fly.

it seems that a lot of questions that get asked on this site could and would be eliminated if prior experience with a established company was accomplished first.
i only say this in a way to better prepare new business owners for a successfull future.
what better way to learn the in's and out's of the business then on someone elses dime?
when i started in the business at 22 i worked for a large company for 5 years and by the time i left i was a foreman and in that time i had seen everything as well as learned from what i seen.
i got to see what happens firsthand with unsatisfied customers to disgruntled employee's as well as how to better take care of equipment as well as what equipment would be best for me.
i also got to see what issues arise from a poorly planned job to a under priced job as well as what happens when you do things without putting it in writing first.

knowing what i know now i would have never considered going about it any way other then what i did and i would have never went into it blind.
it saved me years of trouble as well as in the end got my business up and running and more successfull from day one.

most guys look at working for someone as a waste of time and a delay on their future and i personally veiw it as a way to fast track you future and save you from a lot of wasted time at your expense.

like i said, this is not a attack or me trying to insult you as well as most of what i am saying is just a observation from what i read on this site and your thread seemed like a good place to mention it.

once again, best of luck to you.

Hedgemaster
01-24-2012, 12:12 PM
Check your local and/or state laws regarding the use of subcontractors.

It was mentioned above that YOU would need to have worker's comp insurance. I do not believe this to be true here in PA. In this state, if you operate without employees, you are not required to carry worker's comp. insurance.

Before I started out on my own, a guy I know (working as a sole proprietor) wanted to hire me, but when he found out how much it would cost him in insurance, he scrapped the idea in favor of hiring me as a subcontractor.
I scrapped THAT idea, because I wouldn't make enough money working for one guy as a sub, so I went out, got my insurance, required licenses, etc., and started my own business.

My insurance agent DID note that if I hire a subcontractor, I need to provide her with a form that proves that said subcontractor is insured.

Just be sure to double check all of the insurance requirements. It's one thing to squeak by without doing everything legit on your own, but bring others into play and it's going to have the potential to REALLY bite you in the *** if something isn't done properly.

USA Lawn Care
01-25-2012, 02:38 PM
Hi Chris,

Insurance: Yes....go to your local agent. They will set you up with liability insurance (mine runs right about $500/yr). Tell your agent exactly what you are planning to do and he will then let you know how to go about working with the subs with regard to insurance. They basically have to get a 'certificate' which costs them about $25 for the year thru their insurer. It's nothing new. Building contractors get them all the time and require them. What happens is at the end, info about who you paid gets matched up against certificates just to make sure everyone is covered properly.

Marketing: Some marketing I do is all year....some is 6 months. You can market all year but if you're not doing snow removal, you might just market spring thru fall. Some places it's simply a year contract for an ad so there's no choice.

Pay to keep subs happy: I am at 80/20 (plus or minus a percentage here and there). Subs know prices and percentages going in. If you're worried about losing your a**, then you should be mowing the accounts. It is a volume business. Only sub as much as you want based on income requirements on your end.

Should you look for experienced guys: Most definitely. Your sub is representing your business. No offense to new guys but there are plenty of operations out there with years and years of experience, crews, equipment, etc that are looking for extra work. Use one of them....talk with them...see their equipment and location....call references....etc.

What makes the subs tick?: Pay them on time every time and they will keep working for you. REPEAT: PAY THEM ON TIME AND EVERY TIME and they will stay with you and continue to do good work. It's that simple.

USA Lawn Care
01-25-2012, 02:43 PM
oh....and no need to apologize to anyone about not having insurance your first year. It's called being a new guy who just started a business and had the business sense to finish up a year, ask a lot of questions and decided he needed to get insurance after talking with experienced people in this business. Most one of us have been in your shoes and started the same way somewhere along the line. At least you decided you need to get it before something really crappy happened. ;)

dpld
01-25-2012, 04:16 PM
oh....and no need to apologize to anyone about not having insurance your first year. It's called being a new guy who just started a business and had the business sense to finish up a year, ask a lot of questions and decided he needed to get insurance after talking with experienced people in this business. Most one of us have been in your shoes and started the same way somewhere along the line. At least you decided you need to get it before something really crappy happened. ;)


no offense usa lawn care, but this is one of the most ridiculous comments as well as advice i have ever heard.
insurance is not a option its the law.
by telling someone it is ok to not have insurance in a public setting such as this sends the wrong message to new guys starting out and more often then not sets them up for disaster.

liability insurance for a small guy starting out for a year cost less then a commercial grade back pack blower and if you can not afford to do it then maybe you should delay starting a business.
having insurance is more critical then having all the equipment you need.

i agree with you that he at least had enough sense to inquire about it and possibly take action but i would classify it more as intuition then good business sense.

i know things are tough when starting out but it is no excuse to take short cuts and i know this may seem as if i am being a jack a z z but the fact of the matter is i am trying to help and i would hate to see someone get screwed over by themselves for taking such action and like i said if you can't do it right then don't do it at all.

i know i am new to this forum but i am not new to the industry and the simple sad truth of the matter is if you are not ready to do it right then wait until you can.
since i been veiwing this forum i see a lot of young kids coming here seeking advice and everyone has a business plan and everyone wants their truck all lettered and have big bad azz T shirts made and business cards and let the whole world know they are open for business with some fancy flyers and they think that is all they need to get going and when they start making the big bucks everything will take care of itself.

my advice to anyone looking to work without at least general liabillity and commercial auto insurance should hold off on the T shirts and lettering for their trucks and anything else because in this day and age with all the law suit happy people roaming the streets all it takes is a fender bender at a intersection to make someone think they just won the lottery because they just got hit by a truck that belongs to a business.

i seen so many guys start out that way and at first they worry about it and after a while it gets put on the back burner and then each time they have a equipment failure or a unexpected expense and business is not happening as quickly as they anticipated the insurance keeps getting put on the back burner and eventually the laws of averages start to work against you.

no one plans on getting into a accident and if they did it would not be called a accident and that is what insurance is for and it is the only thing that is gonna help when the crap hits the fan and even though it cost a good penny that is the one thing you pay for that you never want to use.

if i was a homeowner and i found out a guy i had hired did not have the proper insurance i would tell him to get off my property asap and i don't know anyone with half a brain that would not do the same.

if anyone here thinks i am being too harsh or even coming off as a pompus azz, i welcome them to come back and flame away and throw all of the stupidest excuses you can think of at me to prove me wrong which i know in my heart of hearts that i am spot on because i would rather come accross as that and giving sound advice then throw a line of crap like that at someone that it is ok to not protect yourself when you are starting out with the proper insurance.
it may be harsh but it is the truth and i rather tell it like it is then sugar coat it.

Hedgemaster
01-25-2012, 07:50 PM
Absolutely agree. ^^^

It makes my head spin when I see comments like "wait until you see if you want to keep doing this and THEN get insured". Wait. WHAT?!!!

Maybe the sheer number of illegal operators somehow validates it in some people's minds, but seriously - three hundred thousand wrongs don't make a right.
When I first joined this forum, I was stunned by the number of discussions that not only don't condemn, but actually advocate operating illegally. I moderate a forum (not related to lawn care) that has a rule against posting about illegal activity and it's taken quite seriously - publicly admit that you are ignoring the law, or suggest that others do so, and you will be shown the door.
The difference has taken me some getting used to.

Perhaps it all stems from the number of "kids" who do this work and the acceptance from the public of lowballers - if they can save a few bucks, they don't care if you're illegal.

Either way, research what you need to do to operate legally before you start.
There's more to consider than just insurance.

USA Lawn Care
01-26-2012, 04:09 AM
let the flogging begin:rolleyes:

My comment was waaaaaay mis interpreted. (which is ok)

anyways.....my comment was just towards him because he apologized to 'all of us' sort of and there was no need for apology 'to any of us'. My impression was that he jumped in for a year of mowing grass on the side....decided things were going good enough for a real business and was smart enough to know that he needed insurance if he were to continue. I in no way meant 'hey, get it if you want to or don't get it'.

oh well.

dpld and hedgemaster.....sorry a mis understood comment caused you so much typing :D

dpld
01-26-2012, 08:41 AM
usa, i was not flogging you directly or personally i was just commenting on the reply in general, as well as i thought i would go into detail about how i personally feel about the matter and from a giving advice standpoint.

i have had quite a few younger men work for me over the years that have gone on to have some success of their own that i actually take a lot of pride in.
i was never the type to get angry and hostile towards former employee's that turned into business owners in fact i would help them and nurture them with my own experiences to better aid them in their own endeavors.

for me when i started out it was the exact opposite, my former employer treated me like public enemy number one and tried to do everything he could to bad mouth me and steal my customers away.
i remember to this day what a crappy feeling that was to have someone you would step into the fire for turn on you like a rabid dog.

i promised myself from day one that i would never do that to anyone and be that type of person.
i take giving advice very seriously and personally and if i personally gave someone bad advice directly or indirectly that caused hardship to anyone i would definitly take it to heart as well as feel like i failed that individual.

unlike my former employer i beleive we live in the land of opportunity and who am i to stop a individual from persueing their dream or a better way of life for themselves.
i also feel that the only eventual course for a motivated individual in this trade is to start their own business after they learned the craft because as a business owner i realize there is a limit to how far you can go just working for someone.
i can not stop anyone from living out their ambitions nor would i want to and at the end of the day if i can at least help guide them in the right direction to being a knowledgable legitimate business to prevent one less hack on the streets and further the integrity of our trade then it was all a success.

no need to worry about causing the excessive typing USA, by nature i tend to have long winded replies. :)

USA Lawn Care
01-26-2012, 12:31 PM
sounds like your heart is in the right place......it's a nice quality to have and your employees are very lucky (whether they know it or not).

My guys many years ago also were treated very well.......bought lunches all the time and they made out like little bandits at our Christmas parties. And all that came from having a couple bosses in my life that treated me the same way and I remembered just how nice it was.

willshome
02-06-2012, 10:29 PM
what was even more bizzar and coincidental was i saw a new stop on his route, a place he never went to before and he was there a while so i was really curious as to what they were doing and i got in the truck and zipped over to where they were and he actually had the balls to unhook my trailer and leave it at one of my customers houses and take the dump truck and go get mulch and do a mulch job.


So am I the only one that would have found my trailer and taken it. Let them go back and look for the trailer, then hear the lies of what happened to it

btw your right insurance is great, customers love to hear you have it. I am very small and when selling a job this helps alot and people are willing to pay more knowing i have it

w0283767
05-12-2012, 09:56 AM
USA,
How do you expose yourself to possibility of getting the next door neighbors business using sub contracted workers? Wouldn't they pick up that business for themselves and not tell you. Seems like it would be hard to track.