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Business expansion question


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Old 11-30-2005, 06:19 AM
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One of our friends wrote us "I was thinking about bidding on a local cemetary here. It would be around a $88,000 year account. I think that in order to maintain the cemetary I am just going to hire on one guy and have him maintain the property on salary. There is a place there for the equipment to be stored onsite. I figure that
it would give him around 40-50 hrs a week of work, a secure job, and I am able to probably make around a 50 to 60% profit margin on it. What do you think?"

Is this a good idea or a bad one and why so?
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Old 11-30-2005, 12:00 PM
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Here are my thoughts

I think strictly from the business side of things this would be a good idea. It a good profit margin and would be relatively easy to job cost with just one guy on site each day. Having the equipment on-site is a bonus too... perhaps the worker would not even need a truck (although the cemetery is probably quite large so maybe a cart of some sort would be practical).

Here is how I see the cons to the idea:

- First of all I think it would be difficult to find the right guy to do this. I'm sure there are people out there who don't mind working alone each and every day but most would find this a huge disadvantage to the job (I know I would). As well since the person is working alone he would have to be experienced, motivated and very capable. Put these together and you have a rare person indeed. Not sure how large your company is but you could think about swapping the position around between your guys. This would break the monotony and allow fresh viewpoints on how the property is looking.

- On a similar note I have often said that the game of landscape maintenance is one best played with two. Not just for the human interaction but there are many jobs that just go smoother with 2 people. They can assist each other with difficult tasks and would be there for each other in the event of an emergency which is not unheard of in our business.

- Customer's differ but I think that most customers think they are getting more value when they see multiple people on their site. If you did go with just the one guy I would send a whole crew in once in a while (say for major clean-ups) to bolster the perception of value in the customer's eyes and to make sure he feels important. Not sure if this is a factor for you with this contract.

There may be other pros and cons but these are the main ones from my point of view. Were it my contract I would probably consider sending 2 guys there for 2-3 days a week and sending them elsewhere on the remaining days.

Any other thoughts?
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Old 11-30-2005, 07:48 PM
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That is a very insightful post. Quite often we might jump on an opportunity such as this one without thinking what type of employee we would need to perform such a task. Now thanks to your knowledge we can think these ideas through on a deeper level.
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