[lawnscapes2]

Is it better to have the opportunities to take larger jobs than you can handel and then go out and get the assets (equiptment, software, employees) to handel the work?

Or

Is it better to get the assets ready to go(especially when you forsee quite a bit of growth) before you have the opportunities, and then go out and make your opportunities?

Im having trouble with that question.

[Adam Buckpitt]

I believe it is better to at least have good systems in place for growth. Such as forman job costing estimating. Then it is easy to get equiptment and jobs and continue to make profit. Don't grow to make less money!

[Fine Edge]

No trouble with me on that one.
Give me all the opportunities first, I can always rent equipment or sub out some of the work if I need to.
Even when I am booked solid for 6 months, I would rather save my change and put a huge downpayment on some equipment.
I've been doing this too long to get excited because I just booked 4 months of work.

Just my opinion based on my experiences.
Without seeing your business and clientele, it's hard for me to give you exact advice on what to do. I just notice many of my competitors who have been doing this a long time didn't buy all of their equipment at once but rather as they could afford them without having to struggle when payment time comes around.

[Mac]

I think ideally, your opportunities will grow right along with your capabilities. If one exceeds the other, you are going to be in a precarious position and may jeopardize your reputation and potentially even your business.

[agla]

How can anyone not agree that Fine Edge is right?

The last 5-10 years has been a feast. It was easy to get work because it was harder for consumers to get someone to do their work. That bears repeating - it was harder for consumers to get someone to do their work. You could grow into your equipment easily.

Fine eddge said "give me the opportunities first". Those opportunities have been built into the market place during this feast. If you were not around to see the market down turns in the past, you might not recognise that and assume that it is a nonfactor.

When the role reverses and it is easier for the consumer to get a contractor and harder for a contractor to get a contract, the worst thing you can do is to try to grow into a bigger overhead.

I know these things because I took a beating in 1991. So much so that I walked away and went back to school. I started in a growth cycle and did not appreciate it either. I was in denial that a shrinking market woulf affect me. All I did up to that point got better and better. I knew the market would shrink ..... for some of the other guys. On other threads I hear that same thing. Stuff like - we are in a higher end market, or we've built up a clientel ... , or the smaller guys will get whacked, or I'm small and it is easy for me and my quality work to fill a schedule, ....

If there is a shrinking market, every segment will be affected. Some will be built to survive and maybe thrive, and others will be ripe for the picking. Loading up with new equipment is the dumbest thing at this time. First, it may be hard to fill its schedule. Second because there will be lots of very slightly used equipment for sale. Don't let it be yours.

[Stonehenge]

After a decade, I've learned that Fine Edge's opinion on the topic is the way for me to go. I used to lust after having a big stable of equipment to handle any and every project - a real tool hound as it seems many landscapers are. Then came the time when I was sitting alone in my shop and I saw all these tools that I bought for a project, used a few times, then haven't touched since. Just collecting dust and losing resale value.

So I unloaded many of those things that hadn't been touched in 12-18 months. Thankfully it was mostly small stuff.

It's way too easy to go to the rental yard and pick up the thing you need for a few days. If it's big you usually get it in great condition, you can beat the snot out of it, then turn it back in for a few hundred bucks. Don't have a 30,000# trailer? Have them drop it on the site for you.

It's too easy and too affordable to not rent unless you've run the numbers and it'd be cheaper for you to own.

So looking back at my business, if you're starting today, I get set up with all of the gas and hand tools you'll need daily (for us doing hardscapes, that's a compactor, a couple saws, a laser and a few grand in hand tools and electric tools), a truck, maybe a trailer, and that's it. Then grow from there only as you need to.

[johnkeegan]

I mostly agree with what's being said but I believe there is one thing to keep in mind. If you repeatedly find yourself not taking on jobs that you really want to do but shy away from because all you have is a pickup, wheelbarrow, shovel and rake, I would suggest you take the plunge and (responsibly) invest in your dreams. You don't have to do it all at once, and all the equipment doesn't have to be brand new, but if you really want to take your business in a different direction and to do that requires equipment to be efficent and competitive...go for it.
Renting is fine but it can be inefficent and frustrating (not getting work done in an allotted time,etc). And much of the equipment you purchase (skidsteers/mini-skids/excavator/dump trucks) you will find yourself using alot more than you originally envisioned. Generally the more you operate a piece of equipment, the more proficient you become and more varied the tasks you can acheive, thus greatly achieving efficency. Often if we get back early from a job or have a rain day, I'll have an employee take the Bobcat or ASV and spend a few hours training on all aspects of its use so they become proficient. If it's a rental you probably won't do that, therefore, your whole staff can't properly utilize it.
And remember the equipment won't call in Monday hungover, sick, in jail .... and it won't whine (unless a belt is slipping).
Again, don't be irresponsible with your equipment purchases but don't let the fear of financial commitment keep you from growing your business to achieve your dreams.

[Paul]

At this time I would be cultavating my relationships with my bank and with my suppliers. I would want to have my all my options open, with the goverment ready to hand out a large piple of money for public works jobs and smaller companies that are over their heads in debt. Equipment could be real cheap in the next 12 to 24 months. Also the avability of workers should be higher. In real down turns I always looked for ways of keeping ahead of the pack.

[Matt Kulp]

Paul,

"ahead of the pack"....Do you mind giving some examples? Also, I know this is a little off topic, but you refer to public works. I have been researching this for a couple of months now and am having a hard time getting started. Do you have any tips on where to look for leads, and where to start?

This article was in the most recent L&L Mag on gov. work.

Lawn & Landscape Magazine, Media Group Online :: Subscription Identification :: Login

Sorry for the thread hijack!

[lawnscapes2]

I will tell you a little about myself and why i am asking this question.

I am 22 years old and a full time college student. I will be graduating with a degree in Finance in May, and ill be going directly into the MBA program after graduation.

I have been running a lawn care business for about 5 years and have built quite a name for myself with the customers that i service. So much so that i am getting more and more requests to do larger landscaping jobs. Some of which i have been able to complete, and others i have put on the back burner because i am not equipt with the manpower, tools or software to sell or handel these jobs yet(at least till they find someone else).

I am a solo operation right now....my brother helps me during the summer pretty much full time....I am getting to the point where i cant do everything on my own as far as the actual work, books, design work, selling to customers, estimates, and meeting new customers.

I have the opportunity to have a woman start working for me full time doing all the office work and design work (she will be graduating from a community college with a degree in landscape design) and she wants to help me run the business. I trust har and know she will do a good job. I am a little afraid of hiring someone fulltime, because as of the fact that i dont have enough jobs lined up yet to pay her as well as she deserves and still cover the rest of my costs.

I have many opportunities to get jobs, but as i am just growing i am having trouble estimating the jobs, drawing designs for them, and so i get overwhelmed and dont get them taken care of because i am not equipt or ready to take on this work, but i want to be.

I understand when to say NO to jobs and i am not afraid to. I want to do this landscaping and have the ability to do it i am just having a hard time organizing everything by myself.

Much of the money that i have made over the last few years has been used to pay for tuition and invested back into my business, ill tell you what i have as far as equiptment goes:

99 NBS silverado 1500 ext cab short bed, hunter green, logoed on back and sides with 170,000 miles (i have never had a problem with it at all, and i cant decide weather to sell it and upgrade or keep it and add another truck possible duramax)

5x10 trailer all decked out with gridirion racks for handhelds, tool box up front, crates for gas on the tonge, and a large sign on the gate and a smaller one on the racks. The trailer is setup for a 21" commericial toro and a 48 commericial cub cadet walk behind with a bull rider sulky.

I have a 5x8 utility trailer with 5 ft high sides

I have all of the following Stihl equiptment:
MS 260 Pro chain saw
BR 420C Magnum Backpack
FS 55 trimmer
FS 90 Pro Trimmer
BG 55 Handheld
HS 45 Hedge trimmer
TS 350 Cut saw

I Also have
Spyker Fertilizer Spreader
$800 in Dewalt Hand Tools
$500 in Misc Landscape Tools
$400 in Misc Landscape HAND tools

Last year i bought:
Bobcat Mini Skid Steer MT50 - with 36" bucket and pallet forks
Bobcat Mini Skid Backhoe Attachment for the mt50 - with 8" bucket

I run quickbooks for all of my accounting i started a website in 2007 which i designed, and i have been working on editing it for my eventual move into more landscaping.

The only thing that i dont own completely is the baby bobcat (which i bought used for a REALL good price), which is financed at a low rate, and it will help build my credit for the future.

I am thinking of investing in the following:
prolandscape software
2004 Duramax cc/sb LT
7x14 enclosed atlas trailer
Maybe 500 in some new professional uniforms
and maybe 1-2000 in other advertsing and other expenses (insurance and such)

I think i need the enclosed trailer, which i will setup for landscaping and thats where i would store and haul my baby bobcat hand tools and everything required for landscaping jobs. Also i think i need something to help me design these landscape jobs, the uniforms are a must(may not cost quite that much) and the other expenses must be paid for.

I would keep the mowing setup the way it is and take care of the wonderful customers i have at this time

So now that you know a little about me my question is do i invest nearly 30G's or just continue making money with what i have? Or skip the truck and only invest 10 g's? (but the truck has 170,000 miles, and its only a half ton)

So what opinions do you have about my situation, please dont be shy or be afraid of offending me, i wont take anything personally, and i truly appreciate all the advise you guys can give me!

Thanks,
Matt

[Paul]

I would talk to my suppliers about lower prices, or extending my credit limit and longer terms, say from 30 days to 90 days. My banker would understand that I was looking to do public works jobs and need to raise my credit limit along with watching my intrest rates.

Ahead of the pack includes things like wet work ie: water managment, shoreline restoration, wetland plantings, native seeding and planting.

These may or may not include handscaping. There are online services like bidtool.com that can give you notice of what jobs are comming up for bid.

[Fine Edge]

Well Matt,

Upon reading your last post, I understand your situation a bit better now. Don't get me wrong here but I don't see why you need to spend any extra money at this point since you are getting "overwhelmed" just trying to get some estimates put together and designs finished. Keep your long term vision in mind and continue to strive for your goals but please learn the basics of most landscape projects.
Not only do you need to give competitive estimates in a timely manner but you have to be able to get the design done and done properly. Then you have to land quite a few different landscape jobs and learn how to show profit while learning how to fix what went wrong. ( Believe me, it will ).
When you say a move into the landscape field, I assume you mean patios, walls, plantings, water features, lighting, etc??? How many $3000 - $5000 landscape jobs have you completed in the past year? That's about an average cost for a small patio around here. I guess I'm trying to ask if you actually have enough experience in this new field to justify these purchases.

Keep the truck. Why buy a new one right now? I have the same thing; 99 Silverado, ext. cab, short bed. Just turned 248,000. AC compressor went out last year. That's it. I'm gonna ride it until it drops or starts milking me of money.
Have a '88 F-350 1 ton dump. Haven't used it in 1 year - no kidding. Everything gets delivered now, I save a bunch of time.
Only own a Gravely mini- skid. No Bobcat. I don't think I could even justify buying one at this point since starting most of my serious hardscaping over 8 years ago. Proper planning on a larger job and I won't need to rent one more than 3 days.

Get a handle on securing your work first, implementing your designs properly & showing a profit. Without that, I would put my $30,000 back into my pocket.
For our company now to grow like we need to equipment wise, I will probably have to spend $150,000. Not gonna do it.
Starting using many subs this year and I have lots less stress, my projects get done faster, I make above average money on my subs, and our smaller residential projects
average $11,000. Our larger residential projects will average between $25,000 and $40,000.

Again , just my 2 cents.

2 guys and 1 truck!!

[johnkeegan]

You have to decide if you just want be a sort of "landscaping general contractor," who subs out most of the project and, therefore, doesn't need equipment, or do you want to do the work yourself, in which case you need the equipment.
And Paul is right, this economic downturn is an excellant time to get deals on equipment and find new potential employees.
Also, if you're working solo and need help I would suggest you find a good "right hand man" before you hire office/design help (who you'll be paying to create work you can't handle). And don't just hire some minimum-wage-worthy person. Hire someone who is responsible enough to carry out the work properly even if you're not on site. And compensate them accordingly. That will free you up to be able to leave the job site to meet customers, do designs, paper work, return calls, etc. And as the business grows, hopefully, that person will be ready to be a foreman.
Also get a good accountant. He will help explain to you that much of the new/used equipment you purchased can be expensed quickly, thus saving you alot in taxes that will help offset your payments the first few years. In the meantime, that equipment will greatly increase your revenues to the point where those monthly payments are no big deal.
I notice you live in zone 5, so you know that you only have approx. 8 months to make the money you'll need to survive all year. That gives you a very limited number of working hours. You must squeeze as much production/revenue out of those hours as you can. Being properly equipped can allow you to double the revenue/production with the same man hours...or more depending on what type of work you do.

[Mac]

Not to be rude, but what is your long term vision? Do you want to be a corporate suit or do you want to be an entrepreneur for your career? Depending on how you answer that questions, will decide if you go on to earn your MBA.

I was in a similar situation just a few years ago and choose not to get a masters of accounting... what good would earning my CPA do for my company? Absolutely none. In fact, it would continue distracting me from my business and keep forcing me to draw resources away from more immediately lucrative investments.

You certainly do not need to hire an office staff yet. You do need to hire production staff though. That will free you up to sell more and focus on working YOUR business. If you want to keep working in the field, Id suggest getting a job with someone else. Otherwise, start hiring laborers and freeing yourself to grow your enterprise.

[sandim]

Ok, here's my 2 cents and I may get slammed for this because I am a serious newbie.

If you want to grow, go for it. Don't necessarily invest tons of money in new equipment. For my thoughts, run your jobs and see how you make out financially. Figure out what you will use on a regular basis that will pay for itself and make your jobs profitable. Consider leasing rather than owning. Also, from every opinion we've gotten on mason dump vs. dump trailer...get a dump trailer. It has a larger capacity than a mason dump, insurance is less, cost to purchase is less, etc.

We are entering our 3rd year of business. We more than doubled our business last year. We do installs, hardscaping, lawns and maintenance. We charge our clients for the rental fee of our equipment and mark it up by about $100. We also charge per man hour. So, for every guy/girl we have on our jobs, we make a profit. Jobs get done faster, allowing us to do more jobs. And, we are EXTREMELY fussy about the quality of our work.

I think uniforms of some type are important. It's important to look the part. If you are the best landscaper that ever lived, if you show up in ratty jeans (and I'm not saying anyone would), that's going to reflect on how people percieve you. You sound like you have some artistic talent. Go to vistaprint.com and check out their t-shirts. You can get t-shirts printed in full color, front and back, with your information and logo that you upload for about $15/t-shirt. Pretty reasonable, they come out nice, and hold up well.

If you want to take on the bigger jobs, get yourself some employees or sub contractors. Even a couple other college kids over the summer. See how it goes. I would hold off on more equipment until you are sure your jobs will cover it. You should be able to pay for your equipment in a season or two I would think.

We started out with a 6x10 trailer, a jeep wrangler and an Xmark 36" walk behind. We also had a Billy Goat blower and one Echo backpack. We also had one Echo trimmer and a few mis. hand tools.

We now have a 2007 Chevy Silverado 2500 HD Extend cab, a 61" Ferris rider, an additional trailer, another trimmer, another backpack, some lawn signs, a magnetic sign for our truck and a bunch more hand tools. Over the summer we had 4 employees and more than doubled our business this past year. Luckily, we have built a great client base, are now getting referrals/repeat business and have a few jobs lined up for the spring.

We're figuring out what we want to invest in this year. Do a little at a time and you'll get your equipment without getting seriously in debt.

Hopefully this helps and hopefully I won't get slammed. =)