Biz volume needed to support maint. startup

Stonehenge · #1 (**permalink**) 02-21-2003, 08:39 AM

Let's say I know this guy who owns a landscaping company.

Let's say this guy has got a decent amount of tools and equipment to do both hardscapes and softscapes.

Let's also say that he wants to be able to capture the full breadth of the landscape market, by offering more involved landscape maintenance services (they do limited pruning right now, but nothing else).

What would it take in dollars to equip a 2-3 man crew from scratch, and what kind of business volume would that guy need to see in order to pay for all that equipment and earn a decent margin?

Bexter · #2 (**permalink**) 02-21-2003, 02:20 PM

I'll tell you what we started maintenance with a few years back ...used half ton and trailer, 48"xmark walkbehind ,2 trimmers and a blower. Few other small tools ... we had a couple of old push mowers around that we used very little. We went after small commercial jobs and booked a 2-3 man crew for 4 days.
We are now ...3 seasons later not much bigger in the maintenance..now have 2 crews booked with usually a day or two for at least one crew to do extra small jobs that take little equipment. The margins are not great but we still feel it is well worthwhile to have this division ...small as it may be.

Stonehenge · #3 (**permalink**) 02-21-2003, 06:00 PM

What it cost you, roughly, to set up that first crew? $30K?

Bexter · #4 (**permalink**) 02-22-2003, 11:23 AM

I didn't mention the cost because of exchange rates etc. Whatever that equipment costs in your area. We already had the truck and trailer, so costs were very low. That is not including the labor to get it rolling.
If you are thinking of starting this I feel you should put in someone else's hand ... don't take time from growing your Landscape business.
I had hopes of grossing 1 million a year (maintenance) within 5 years of the start... It's not going to happen... this division is doing around 200k now.
I am interested to hear from anyone that could offer some suggestions to really build this up. My thoughts are that to do big volume you always have to be low bidder? Don't think IM interested in that.
Should we go after residential? We do very little of that now and only full service for customers that don't mind paying.. E.I.: one is around $1,400.00 per month.

Nebraska · #5 (**permalink**) 02-22-2003, 11:37 AM

Stonehenge...

I think $30k is high just for equipment minus a vehicle.

Trailer, two new 36" hydro mowers, one 21" trim mower, two hand held blowers, two trimmers, & misc equip.. $10-$12k. If fertilization is going to be offered at another $1k for spreader and backpack sprayer. This is assuming the focus to start of with is going to be residential. For this type of work a two man crew is going to be the most efficient route.

Stonehenge · #6 (**permalink**) 02-23-2003, 04:14 PM

Ok. So with a used truck, one could get into the biz with a single crew $20-30K (depending on the condition of the truck when purchased).

The complaint I've heard from local competitors (escpecially those who dropped their maint biz) was that it took too much time and too much effort to build that biz up, and the margins weren't there.

For me, if I were to do this, it'd be more to allow me to service my landscape clients better. I often get requests for that service from my landscape clients, but always turn them away. It'd be nice to keep us at the top of their minds when anything else came up.

Bexter · #7 (**permalink**) 02-23-2003, 08:29 PM

Quote:

Originally posted by Stonehenge
Ok.
I often get requests for that service from my landscape clients, but always turn them away. It'd be nice to keep us at the top of their minds when anything else came up.

I made that same mistake years ago ... I know calling it a mistake is rather harsh and many won't agree ...just my opinion.
If someone else is maintaining a landscape you constructed, it won't belong before that customer may forget all about you. After developing a relationship with the regular weekly company, it will be them they ask to plant a tree, do some mulching etc etc

If you are willing to start very small, then invest very little and see where it goes.

Nebraska · #8 (**permalink**) 02-24-2003, 03:54 AM

Stonehenge,

If you already have the relationship there should be no reason for you to charge "average" or "going" rates. Last year on the maintenance end we ran a net WAY above what is standard for the industry.
You've already created value in what you have done on the design and install side. In my opinion I could see it almost as a slam dunk to maintain it.
Present your maintenance service as horticulturalist driven not solely "just maintenance"... perception... The other question comes into play with how fast or how much business you need to attain in the begining....

Stonehenge · #9 (**permalink**) 02-24-2003, 08:43 PM

Bexter - you hit the nail on the head.

Nebraska - I'm hoping that you're right, that the sale is a slam dunk. The growth to me isn't all that important, as I see this being a supplementary biz to our main biz. At least for our current setup.

It would also allow them to do some of the other hardscape maintenance things that I find hard to find to to get out and do; this way, they'll already be on the site, or at least in the neighborhood.

Nebraska · #10 (**permalink**) 02-25-2003, 02:07 PM

So does this mean you are venturing into a larger scope of maintenance?

Stonehenge · #11 (**permalink**) 02-25-2003, 02:35 PM

Always considering my options....

Nebraska · #12 (**permalink**) 02-25-2003, 03:06 PM

I can NOT over-emphasis the IMPORTANCE in the maintenance business of always focusing on increasing density of the routes!

New customers are great but new customers in the same vicinity of existing customers are even better...

This year greater focus is going to be put on this aspect....almost on a bi-weekly basis....things like door hanger that emphasis our work with the neighbors. Maybe even as far as those signs in neighborhoods that a lot despise..

Nebraska · #13 (**permalink**) 02-25-2003, 03:17 PM

The margins on mowing are really lower than anything else....that's why I emphasize the densisty

Where I have found that we make up on that is in:

Add-ons
Density.

Last year we focused on Add-ons and this year we'll focus also on Density....

I have always said that if my business evolved into all fertilizer and maintenance minus the mowing I would not loose any sleep.

Stonehenge · #14 (**permalink**) 03-03-2003, 08:14 AM

How 'dense' do you find to be acceptable? How many client per 10 sq miles?

Nebraska · #15 (**permalink**) 03-03-2003, 10:56 AM

Minimum 3-4 in a couple block area. Ideal of course the entire block. Realistic to have an entire block? No.