[RyanVT2005]

I am looking for some advice, information, and suggestions for my Business. I am thinking about starting a Landscape Maintenance Business. I want to get into the commercial maintenance sector but know that you need a reputation before obtaining bids. Where should I start?

Thanks for the help

[Paul]

Welcome aboard Ryan! We need to know a bit more about you. Have you worked in landscaping before, if so what did you do? Do you have any schooling ?

[RyanVT2005]

I've worked for a large commercial maintenance company, and I am presently working towards a bachelors in Horticulture.

[Paul]

The hard part of commercial maintenance is the prices. They are lower than (per hr) than most residential. Now adding in the delay in payments ( most are net 30) you can run into a serious cash flow problems. I would start out with residential accounts and build your business. Once you have cash flow, equipment and labor you can add in commercial accounts. What you have going for you is your background in horticulture, this can take year off your experience in maintenance. Finish your degree, get your pesticide license and take some accounting classes to back up your education.

[RyanVT2005]

Thanks for the advice. In my Horticulture degree is a minor in Business. These classes have been very very helpful.
Question, what do you mean by delay in payments and the "(most are net 30)"?

[Stonehenge]

Ryan, welcome aboard!

I have to agree with Paul. My company handles primarily residential work, but we want to inch our way into the commercial market, which is pretty much what Paul's company exclusively handles. Each kind of work has it's own kind of headaches, but I'm finding that to take on big commerical landscape projects, you will get your head handed to you on a platter if you do not have all of your financials in a perfect row. Residential work is small enough to allow you to learn as you earn, and hone your operations, sales, and accounting skills.

Then when you know all of your costs, rates of production and the rest, then jump with both feet into the big commercial projects.

[Paul]

Net 30 means you get paid 30 days from invoice or you get paid 30 days from their check cutting date.

[RyanVT2005]

How do you guys in the Residential Sector handle clients. Do you have contracts or do a pay per cut/pay as you go? I have heard of people doing the pay as you go and I just don't think it is a smart business practice. With no contracts you have no residual income or anyway you can accurately project your earnings or costs

[Paul]

It's how "YOU" want to run your business. Never run your business as your competitors run theirs.
I agree with you contracts are the best way to go. How you structure your contracts is what is important. Your clients will have some say in what they want, it's up to you to satisfy their needs.

[RyanVT2005]

I plan on running my business with contracts and I know it will take some time to perfect the process. I was just looking for opinions and conversation. Thanks for your input

[Lanelle]

Hi Ryan,
I see that you are in NC. Does the VT in your screen name mean VA Tech? Go Hokies!!!

[RyanVT2005]

OH YEAH...GO HOKIES

[Stonehenge]

Definitely run your business the way you want to run it, not the way you think others are running theirs.

After awhile you'll develop a solid reputation, and the (residential) clients will sign up. The terms of the contract will be less important after you are a bit established.

[treesmiths]

Hi,
Just wanted to mention another factor: learn all that you can about your state's business taxes. Here in Washington, we have a business and occupation tax (about 2% of gross reciepts) and the filing requirements change ; annually, quarterly, monthly or not at all. I once got 30 days behind in my state unemployment and I had to pay a 10% penalty, then they tripled my rate for the next year. I said yes to too many customers and had hired more help, but then the customers did not pay for up to 90 days after the jobs were completed. A cash flow nightmare!

All of my profits were eaten up by penalties and added time and effort trying to collect. I started charging a late payment penalty and refused work that could not pay within 30 days. On federal and state gov. work you have to pay "prevailing wage" and the labor rates are outrageous (32.50 hr for a painter!) then after the work,the government may audit your books to check that you actually did pay your employees these rates. It can easily take 90 days to get paid from that kind of work as well. Go slow, start small and be vigilant.

[RyanVT2005]

Treesmiths thanks for the advice, sounds like you had it rough