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||01-11-2012 10:51 AM
How do you Operate Your Lawn Care Business
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.
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.
||01-11-2012 12:51 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.
||01-11-2012 12:57 PM
Thanks for setting me straight
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 !
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.
||01-11-2012 02:15 PM
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.
||01-11-2012 03:11 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.
||01-11-2012 04:01 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.
||01-11-2012 04:22 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.
||01-12-2012 01:07 PM
Since then I scaled way back to myself and however many people I can fit into my truck with me.
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?
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