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  • #16
    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?

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    • #17
      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.
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      • #18
        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.

        Comment


        • #19
          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.

          Comment


          • #20
            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

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            • #21
              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.

              Comment


              • #22
                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.

                Comment


                • #23
                  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.

                  Comment


                  • #24
                    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.

                    Comment


                    • #25
                      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?
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                      • #26
                        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.

                        Comment


                        • #27
                          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.

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                          • #28
                            i forgot to ask you usa lawn care, do your subs have your name on their truck or theirs?

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                            • #29
                              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.

                              Comment


                              • #30
                                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.

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