How to turn my low profit business around

[mowboy]

This 'Ask the Author' question comes to us from Mark of 'C & E Lawncare and Landscaping'.

I started my biz 2 years ago. Initally I did $6500 and still worked another full time job. I quit my job to pour all of my energy into the biz. I had 350% growth, but all of the biz money goes to pay my personal bills. How do I change this to where I am drawing a salary, so that I can continue to grow? Does everyone go through this, or was I an idiot to quit my job so soon?? Thanks!


Hi Mark,

Thanks for your question. I can relate to your situation *http://www.gophergraphics.com/forum/iB_html/non-cgi/emoticons/wink.gif

There is no doubt that most everyone must go through a difficult stage as they try to start their company. How long or how serious that awkward stage is will depend on you and your circumstances.

So no, you're not an idiot for quitting... this can be turned around! The first step is to develop a business plan, complete with current and projected financial statements.

Unfortunately, it is dificult to give you any pointed advice without knowing your situation. That is, what your financial statements look like, what your revenue is and how much time are you currently putting into your company. You are welcome to use this forum to post this information. Team Gopher loves to help people put together business plans and get them moving forward with their business so they would be willing to contribute to this thread too. If you want to do this please reply with the following information (Round numbers are fine):

- a breakdown of all your monthly bills
- Your monthly revenue for the past several months (or since you started full time)
- An idea of how many hours you currently work in the field each week
- If you have staff, give us details

Let's start with that and we can work forward and see if we can get you on the road to PROFIT!

If you prefer to work confidentially and one-on-one with me please visit the Business Plan Consulting page (http://www.mowboy.com/index.php?option=com_content&task=view&id=27&Itemid=49) on my website.

Thanks a lot for your question Mark!

[Steve]

This is a fascinating topic that a lot of new business owners run into.

I think it comes down to two things.

Either you need to push to make more money with your business or you need to cut your expenses.

[SprinklerRepair]

Or, you need to add services.

Learn landscape lighting or sprinkler repair (http://www.irrigationtv.com/landscapers.html).

Customer referral is indeed the #1 "closer" in ANY business.

But usually this is not enough. You need a website as 80% of all adults search online before calling a company (Nielsen ratings (http://www.nielsenmedia.com/nc/portal/site/Public/) 2008)

If you added 5 customers a month through Google search rankings (http://www.**********.com), would that turn it around for you? I think so.

[picframer]

It seems clear to me that he did not have a business plan, it would have shown him among other things the profitability of the company and what it could afford to pay him and at the same time have retained earnings to grow the business.

I would have thought he would have realized this while working a full time job and running the side business.

In any event there is a lot more information required to give an absolute answer, in short however it seems clear to me he is living beyond the means of what the company can support.

I personally do not see lawn mowing as a high profit area for a small company (at least in my area), however there are areas within lawn and yard care that are.

Where I live for example you would starve offering sprinklers or sprinkler repair as less than 1% of the population has or is interested in these systems, at the same time offer mini excavation which I have and the results have been amazing and the profitability is quite high, same as spraying and a few other services I have zero'd in on.

Marketing is very important, word of mouth and your network of people you know would be #1, I would put newspaper ad's as number 2, in the city I live ad mail has not worked at all, newspaper ad's have been a hit. Having a website is critical, it's a cheap way for you to market yourself and your services using words and pictures, I would not personally spend a lot of $$$ or a tremendous amount of time making sure I was number 1 in SEO, remember the average age of Internet users is something like 28, personally that is not my target market, keep in mind also many areas are still dial up and older folks (my target market) will hit the newspaper first followed by the yellow pages, I base this on customer feedback and experience.

So there is a lot to think about, research and try.

My 2 cents
Andy