Key to SUCCESS no secret in lawn care

[Phil Nilsson]

Please read and understand this simple formula for success in lawn care. The numbers below will yield you at least a 20% profit on sales if you "let it" ... and I can prove my case.

Number one - hispanic labor paid at the "laborer rate" of $7.50 an hour. Crew leaders and foreman paid a little more.

Number two - <b>large scale hours sold</b> (large commercial properties) at the rate of no less that $32.00 an hour production "yield". Don't get greedy - sell large volumes of hours.

Number three - don't sell perfection work because it doesn't pay and commercial doesn't want it in but only the rare real up-scale facilities. Good enough is good enough.

Number four - you need a market large enough to take down from between $2,000,000 in sales to $5,000,000 in sales.

That is the winning combination my friends. Buy time AT $7.50 and sell it at $32.00

<b>P.S.</b> This information posted here for the benefit of our exclusive members on this 7th day of September in the year two thousand and two ... is worth its weight in gold
and info like this is what makes (this board) the best in the bizz ... if I must say so myself!

Phil Nilsson
Nilsson Associates Consultants
Visit Lawn Service & Landscaping Book Store

Edited by - Phil Nilsson on Sep 07 2002 4:06:50 PM

[alcpi]

reply

Phil:
Thanks a million for the info! I just have one question, what exactly do you mean be #4? Does that refer to the area in which I work in and my business' ability to service it?

[Phil Nilsson]

reply

When you get to 2 million in commercial sales (grounds maint) , your salary should be about 15% or $300,000 and $100,000 will be there to retire debt and keep your fleet current. The 20% profit thing above. I see these numbers in my travels all the time. You need a market large enough to sell a "ton" of labor hours OR you can be diversifed a little in commercial to make up the base of bizz if it can't be all simple grounds maintenance, so add more low skill stuff that doesn't require a big investment in equip. For example don't look for tree work to make up diff in sales cuzz you're talking big bucks for equip.
Do chemical apps (low investment high return) and do "class B properties" ... stay away from fancy time consuming accounts that don't pay for being 100% quality gig.

Phil Nilsson
Nilsson Associates Consultants
Visit Lawn Service & Landscaping Book Store

Edited by - Phil Nilsson on Sep 07 2002 4:46:28 PM

Edited by - Phil Nilsson on Sep 07 2002 4:48:40 PM

[smartwork]

reply

Do you have additional info on the markets and/or company structures that will generate those sales figures? Are they running 7-day weeks, and although there are obviously more variable, do have an idea of the min or average population of the cities where you are seeing these type of figures?

As we are merely investigating at this point, I would enjoy hearing about those types of markets. We're in a city of about 1 mill in population - although demographics are key.

On a similar note, are there any references available that graph some real-life business success stories showing sales & profit related to growth?

Thanks!

[Phil Nilsson]

reply

To do the higher dollar volumes in sales you'll need to be in or near a major market or (secondary market) within range of commercial sectors. Of course getting to the higher sales volumes is much faster when focusing on commercial work where one account can yield an annual contract amount of let's say $10,000 ... $20,000 ... $50,000 or even higher. Whereas with residential it would take hundreds if not thousands of customers to produce those sales volumes AND you can't hope to control huge numbers of sales dollars given the competition for the residential work. You'll get a market share of whatever market you're in. The alternative is to buy out others to gain a higher market share, but this takes capital and time.

Major markets are any metro area like greator ... Atlanta ... New York ... Detroit ... St. Louis ... many, many others. Just check population counts and compare the totals to the major market counts. You'll end up with demographics by degree or population counts ... that plus growth activity for any specific area. Population counts tell the story since along with high pop areas, there is commercial activity to support those pop numbers ... jobs, supplies, housing and people "support systems" like hospitals, government and etc.

[AAffordable]

reply

Phil, I was wondering what is good numbers for a company that is a one man crew working 7 months a year? We are located in Sylva, NC and the towns around us seem to be growing fast. The only reason we dont work the rest of the year is because of winter. Also you had mintioned about colecting signs for realitys so we had mentioned to the reality that we do work for and they think it is a great idea but what do we charge for this kind of job? Is the charge per sign?

[Phil Nilsson]

reply

One man crew? ... would guess that on the mowing side of it, and with houses close together, you can crank out maybe $60.00 an hour mowing, and maybe $30.00 to $35.00 (plus) on other work. Depends on your market. Mowing in most contracts is 50% of the work meaning if you have a $2,000.00 residential account, mowing is probably in there for $1,000.00 of it ... the other $1,000.00 is cleanups, flowers, beds edged, weeding, lawn care app program and what not. A one man crew is limited to residential or (real small) commercial it would seem.

Sounds like you'll need help which is available at from $7.50 in many areas.

[lanscaper2002]

reply

Phil,

Thanks a million for the info you gave, it puts things in greater perspective for me.
I noticed you are from CT and I assume you ran your business there? If so, what areas are the best to grow the business to the point you mentioned above? Or would it be better to expnd into other areas such as MA and/or NY?

Antoher question, would you start a landscaping operation all over again today if you could? Or would you look into something else?
I am seriously thinking of starting an operation up, but need find out more of what the market will bear in CT in order to follow your business model. You input will be greatly appreciated.

Thanks!

[Phil Nilsson]

reply

I think if you're interested in developing a large commercial bizz over time, (millions in volume) you need a larger market (more population) counts than in Connecticut. More targets, closer together, perhaps the larger metros like greator Boston, New York, Phila, Atlanta, Tampa, Dallas, etc,etc. are examples. Areas where you typically bid out from three to ten million or more in work each season, hopefully get a market share of that.

About starting a landscape operation again? ... sure, but this time I would look for market share and fast growth by going the acquisition trail to get to bigger dollars ASAP ... I'd spend more time buying others out than actually bidding and competing for the work itself as a result of marketing efforts. I'd build strategic alliances, get into heavy duty partnering and develop a "management company" that did nothing but acquire the work, then sub it out to partners.

[lanscaper2002]

reply

Great advise []

I see what your saying and makes a lot of sense. The thing I am concerned about is what realistic profit levels can one expect doing say 50% cutting and the rest in low overhead stuff. Is 20% all one can expect from this type of setup?
All I am trying to figure out is what combination of services will one need to perform to increase pofit levels to maybe 40% to 50%? Or is this amount unheard of in this business?

Any advise would be greatly appreciated.

Thanks!