commercial vs residential

[picframer]

Originally Posted by Steve Being able to pass on such jobs seems to be so important. So often it seems there is this gut reaction where if there is a job available, you must get it at all costs. It doesn't matter if you are going to make or lose money on the job, its simply a question of you MUST get it. Fighting that urge and using your brain to figure if it makes sense to take a job can be overwhelming and I bet many businesses that end up closing up shop, do so because they couldn't fight that urge. Do you find this to be the case too? When I started a woodworking company as a hobby business 20 some years ago yes, I wanted every job that was presented to me at all costs. It came to me over time, the quality of my work was far superior to those I was competing against so I started raising my prices. Today in woodworking, my price is my price, I make and sell things you simply can't find and the average woodworker either can't figure it out, doesn't have the tools to do it or generally the experience. This is what my Yard Care company is all about, the competition around here does not have the equipment we do to offer all the services we can, so they end up renting and generally do not have the experience so the results are generally not satisfactory, they won't come back as the rental cost of the machines has already eaten most of their profit so we get the call, I find this every week. I fully understand it is a massive investment to get where we are today, I know from my balance sheet we have over $200,000 in equipment which would scare many away, the thing is one has to look at the income statement, when all the gear is working we can gross three thousand a day easy, and because we do so many things, rain days do not matter as we simply spray or do pressure washing or some will do maintenance on the gear so it works perfect.

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Andy
Halifax, Nova Scotia

[hotwired]

Lawn care business tips

Hi All Great thoughts. We actually lost nearly all our commercial and municipal work this year to lower bids. We charge $60-$70 per man hour, and even though we're efficient enough to get the same work per hour done as the typical contractor charging $45-$50, we are still sensitive when the economy is perceived as negative. (Not ego talking, It's just been me and the same guy working for nearly 20 years together, can't help but being efficient! We've been together longer than both our marriages put together!) It's been illustrative on where our "economic weaknesses" are. I think it's advisable to avoid putting things in categories too ruthlessly. "commercial vs. residential" can be misleading. We have amassed a portfolio of accounts over the years of people (both residential and commercial) who are loyal, completely trust us, treat us like gold, and would never dream of leaving. They almost comprise a "third category." And I think that's the point ... looking a little deeper, beyond just hte commercial / rez equation and identifiying who you want to work for. And of course you find out who you want to work for sometiems by finding out who you do NOT want to work for! We've also developed a feel for what's recession resistant in our work. I beleive the residential, 25-50 per week mowings, with foundation beds, moderate priced spring and fall cleanups, etc. are the most recession resistant for us. They can let the shrubs go a year if things get tough, but in cost cutting, we're pretty far down the line. Contrast that with the $75 per week mowing .... $300-$375 per monht .... a person could probably bit the bullet and buy a cheap rider and break even in one season or less, and might be inclined to do so if he got a cut in pay. My two cents. 4.30 a.m. , forgive any lack of cohesion!!

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Kenneth LaVoie III
LaVoie's Landscape Mgmt. Inc. - Winslow, Maine

Author of - How to start a lawn care business a whole new way.
Get your copy now at LawnGuru.net - A guide to creating a fun, profitable lawn care business, and becoming a
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[aries9245]

I have alway's had a slit 40% commercial 60% res this yr is the first time I have experienced a heavy loss on my commercial accounts that I have had for 8yrs being that the rental on most of the properties are at about 50% vacant the property managers had no choice but to get outside bids. And unfurtunatly there are some real jackasses out there giving the work away for nothing I'm telling you guy's there is 0 profit in what they are charging I can see being competitve! but this is isane just a example 1 commercial property takes 4 of my guy's 1 whole day just to do a spring clean-up along with 4 apps at 8 bags of 15000 sq ft bag, shrub trimming 2x a yr and fall leaves removal and clean-up these guys have cut my price in half? impossible just makes me sick were do we go from here?

[MountainViewGreenskeeper]

its not really giving it away they trying to survive. had a plumbing company help me out with some work when I was laid off. They keep getting under bid cause everyone is trying to find work. and its the guys that get laid off that dnt know what it cost to A. do the job and B. do the job right. I helpped with alot of repipes for homes and the new install guys would charge new install prices for exisiting home repipes. SOOOOO much more work is involved with a repipe even more so with the older homes.

So they were slow for the longest time but it picked up. They had to fix problems or unfinished jobs... all sorts of stuff. people even would steal the back flow preventers on the commercial parks. So they had to fix it and put cages around it.

Im not in the commercial side yet but I would imagine that there is a similar case as well with losing to under bid jobs. unemployment may be at 10%ish but there is a lot of underemployment. I know a guy that started a landscape business doesnt even run it except office stuff and that is his side job to make up for the loss of income from his new job.

Lots of usless info but figured it needed to be said.

[stevef1201]

There are guys here doing Mobile Home Park Lots as cheap as 6 dollars a cut. Now i charge 1.10 per thousands, plus 10 stop charge. That puts mobile home park lots in the range of 13 to 18 dollars each. So i don't do them. I also dont want them. I work about 5 to 6 hours a day, 5 days a week. make 1500 average a week. How? I don't work for free. I do o great work, and make sure my customers are happy. I give them an overview of what to expect, then always do more. I have gotten more jobs by word of mouth advertising, than anything else, so my customers must be happy

[quote=Floridajoe;66529]Just wanted to bring up a conversation about commercial vs residential.
Do most of you find commercial to be a ego thing. Seems most will do whatever they can do to get commercial accounts. Around here that means loosing money. In my area there are sooo many companies going for the commercial at whatever cost. I find that most of the commercials around here go stricktly with the lowest bid. They are not concerned with anything about your service, or what may set you apart from the rest. Just the bottom dollar. Not saying I don't do commercial, I do have some very good commercial accounts. But in general they seem to be more of a pain than my residential customers.
It takes more residential to get to the dollar amount; but it seems I can make almost double per hour on residential than what the commercials go for. I will not loose money on ANY job, just to say I have commercial. I just usually tell them: "next season when the guy you hired has all broken down equipment and no money to replace it; call me I'll be here."
What does everyone else think? Does this seem to be the norm everywhere? Are all the new guys thinking they must undercut commercial





Yes I totally agree with you I would rather take the residential work over the commercial it is a pain and you do loose alot of money, and plus the resedential customer appreciates your work alot more than the commercial crowd

[Norcal]

Here in Nor Cal it seems to be the same I looked into a couple quick stops and 7-11s and asked the manager how can i get his buisiness he said beet the current guys price. The only way I could figure swollowing doing the same work for less than the other guy is making on it now would be a long term contract for a little sense of security but I havent approched any of them with that angle yet

[Steve]

Here in Nor Cal it seems to be the same I looked into a couple quick stops and 7-11s and asked the manager how can i get his buisiness he said beet the current guys price. The only way I could figure swollowing doing the same work for less than the other guy is making on it now would be a long term contract for a little sense of security but I havent approched any of them with that angle yet

It would be interesting to know how much time and profit could be made on such a property, compared with an equal sized residential property.

[Norcal]

means to short term income until you can get long term residential loyal accounts that's saying one commercial account equals a few residential accounts out here I see no long term future with small commercial accounts that require no insurance or any type of loyalty other than price.