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  • New Marketing Idea

    Hey All,

    Me and my two friends started a company mid-May this year. Through a small base of friends and family accounts we've grown to about 29 weekly+5 biweekly accounts, (mostly through referrals) with small "jobs" coming in occasionally. I find most people will trust us (15 years of exp between the 3...we're all under 20 though) with mowing and mulching, but turn to big names who unjustifiably rip them off big time on major landscaping work. For example, a local garden center who plants shrubs and trees along with mulch rips off the entire area; these residents may be pretty well-off but theyre getting ripped....a job with 3 guys (paid no more than 10-12/hr) that took 2 and half hours...4 or 5 yards of mulch, 14-15 small shrubs, and a small tree in the front...1600 bucks for less than $100 of paid labor- and no complaints from the customer- job result was nothing spectacular. So you have the "have's" who throw their money away for landscaping improvements, and the "have-nots" who can't shell out the money because getting anything significant done would empty their wallets-that's my area (Southern NJ). Back to the point.

    We do all our lawns in one 10-11 hour day (they average about $35 a pop), and then spend maybe another half-day with maintaining equipment or other miscellaneous things. We all have other jobs, but each have a little too much time on our hands. We started advertising with flyers in June (have prob gotten about 5-600 out) and have slowly but surely been picking up customers (maybe 5 from the flyers). Now for the idea.

    We're planning advertising in March, and my idea for our flyer would be to advertise one (or more...ex gutter cleaning+mulching) FREE landscaping job...be it a medium-size planting, mulching, cleanup, sod-laying, whatever..."up to $500 value" (maybe even more...going by area standards)....with the 3 of us who are fast workers this on average translates to about 4-5 hours of our time. My reasoning is, if we sacrifice one day for say 2 agreements of all-summer mowing (and prob the next year, we do quality for compet. prices) and a steady income, it will be well worth it. Once you do the work, that person feels great thinking they got almost double the product for their money, you feel great because you picked up two more accounts and owe those customers nothing more. To be busy five days a week (we have nice equipment and work fast...and we're willing to work 6 days a week), we would need at least 100 accounts, and we don't anticipate on getting anywhere near that for at least another two years. So you do 10-12 days of hard labor over the summer (yes it might really suck for a few weeks if you get a good response), and you get 20 new accounts for the summer. Just pretend it's years before when you were busting your ass for someone else for 8 or 10 bucks an hour and it will feel a lot easier. Would sacrificing one summer of doing tedious, free work be worth it to have a successful, established business for the next 5 or 6? I think so. This stategy is probably not for established, career scapers but I think it's good for young people with immature businesses. Any thoughts?

  • #2
    Personally I think they had to be there longer than 2.5 hours from start to finish, but we'll use your numbers anyway.

    2.5 hours for 3 guys is really like 4 hours with 3 guys. Why? They had to load up and drive to the place, then return. It has to be figured in. That's 12 man hours. Tack on 2 more for the design portion, whether it's crap or not someone had to look at it and talk to the client. That's 14 man hours. $12 per hour actually costs a landscape company at least $16.50 per hour when you figure in taxes, insurance, and all other with holdings.

    14 man hours * $16.50 (at least)= $231

    Figure $25 per bush for fun. = $375

    Figure $100 for mulch.

    Figure $150 for the tree.

    Okay, we are now at $856. Now tack on biz insurance, shop payment, gas, trucks, skid steers, owners salary and all other overhead....$150 for fun.

    Up to $1006 BEFORE any warranty on shrubs and BEFORE any profit.

    Was there anything removed from the property? Any topsoil added?

    Oh, and we forgot to add in who got paid to go pick up the bushes as well. Tack on another hour. Oh, and the person in charge of paying wages and scheduling. Tack on another hour. AND, I still say they were there longer than 2.5 hours. Probably 3.5 hours. So I would tack on another 3 man hours.



    I think you'll see that the company you speak of isn't really ripping people off at all.



    Just my opinion, none of it was meant to be rude in any way shape or form. Just showing that there is more than meets the eye.
    a.k.a.---> Erich

    www.avalawnlandscaping.com


    Build a man a fire, he'll be warm for a day.
    Set a man on fire, he'll be warm for the rest of his life.

    Comment


    • #3
      and my idea for our flyer would be to advertise one (or more...ex gutter cleaning+mulching) FREE landscaping job...be it a medium-size planting, mulching, cleanup, sod-laying, whatever..."up to $500 value" (maybe even more...going by area standards)....
      To be busy five days a week (we have nice equipment and work fast...and we're willing to work 6 days a week), we would need at least 100 accounts, and we don't anticipate on getting anywhere near that for at least another two years. So you do 10-12 days of hard labor over the summer (yes it might really suck for a few weeks if you get a good response), and you get 20 new accounts for the summer.
      Using your numbers again: $500 for 100 accounts. That is $50,000 that you are "buying" those 100 accounts for over 2 years. With that, there is NO guarantee that they will stay with you. Even if you get the 20 accounts you speak of, that is $10,000 that you will be "paying" for those accounts, just 20 of them!!

      You would be MUCH further ahead to buy an existing business with that money and go from there.

      I am thinking that you guys don't realize that you are selling TIME in this business and you are willing to give away your product to easily.


      Here is another angle. You say most of your lawns are "$35 bucks a pop". Fine. After your expenses, and I mean ALL expenses, including the three of you being paid an hourly wage, company profit, owners salary, etc. I am guessing that your company will only profit $5 for each lawn. Say you cut 30 times per season, your company made a profit of $150 from that client on mowing alone. But you just paid $500 for that client. Your program will take 3.3 YEARS to break even!


      If you want a program to try to get new clients, offer a coupon book if they sign a one year mowing agreement. $100 total, off on 4 different services ($25 each). Studies show that over 50% of people don't use coupons, but when you offer them, they feel they are getting $100 for FREE! With those stats, you are "paying" $50 for a client instead of $500, PLUS, you are showing them a service, other than mowing that you do that in the future, they will probly have you do again AT FULL PRICE!

      Think about it.
      Jeeps are like women.....much more fun with their TOPS OFF!



      A society that rewards based on need creates needy citizens. A society that rewards based on ability creates able ones.

      Do you guys think Obama is going to kiss us after he is done with us or is he going to put on his belt and head out the door?

      Comment


      • #4
        I wasn't exactly clear...

        This is a huge local garden center who also does landscaping. They get everything at the garden center in huge quantities, and then sell it to the public (when they do landscaping) at retail prices and markups. They are paying 1/3 of the prices you wrote at the absolute max. Maybe the prices are justified, but my main point was that it would be a huge incentive to have us mow for people who can afford landscape maintenance but could never afford landscape improvement.

        Elwood,

        Here's my point: We're just three teenage (19) kids who are trying to make summer money. Yeah, we might give away our time, but if it helps us build our business, we'll take a chance that the customers will stay with us after their contract expires. And if they don't? Who cares, the mowing money (about $700 per account per season) is still there, and it's an amount of money most of our other friends would never begin to sniff at their $9 or $10 taxed dollar 40/hr week job. I don't mind "wasting" my time by working hard. If all I had to do was work 4\hrs of labor to get 1 account, I'd work 90 or 100 hours a week for a month instead of walking around getting 1% at best returns on flyers. I'm not concerned with "giving away" time- it's a one-time deal. If every hour of my life was occupied by working then I'd see your point. But say for those 100 accounts I do 400 hours of work. I might be "giving away $50,000", but I probably lay around and do nothing for 500 or more hours than I should all summer, and I might as well be spending that time building my business.

        We all have other careers in mind, but if this takes off and works out, great (BTW it will be only two of us next year). If it doesn't, we walk away with a good amount of money made. If there was a sense of urgency where our first year or two would make or break us and we had to make high profits fast, this would be a different situation. In a common LS'er scenario, you're right on. I'm trying to give an idea to kids who might be making 30 or 40 an hour mowing but only work 10 hours a week and are willing to work 50 or 60. This idea would be for them.

        Comment


        • #5
          Elwood...

          We are the workers, we are the owners. Whatever we make is split three ways. We gross about $1100 a week with mowing. Our only expenses are gas, blade sharpening, and an occasional oil change, which add up to $50 a week at most, but average about $25 a week. So $1,050 is our weekly profit. We average one job a week, which is usually $300-500, and because material (if there is any) is tacked on above that figure, the only expense is gas, probably $10. I don't think we're nearly as advanced a business as you thought. My only point is that we have time to kill, and might as well kill it getting customers. I do like your coupon idea, thanks. We'll probably make two different flyers and test the response of both in mid-March, then commit to the best result in April.

          Comment


          • #6
            We are the workers, we are the owners. Whatever we make is split three ways.
            Our only expenses are gas, blade sharpening, and an occasional oil change, which add up to $50 a week at most, but average about $25 a week. So $1,050 is our weekly profit.
            You really should set yourselves up as a legitamate business. You need liablity insurance and any local licensing that is required. You need to pay yourselves as employees and develop an "owners salary" that is a percentage of sales and you should set a goal for company profit.

            WHY??

            As you grow, you will have the need for employees. These employees will need to be paid, just as you three as laborers need to be paid. Over time, you will wear out your mowers, hand tools, trucks, trailers, etc. How will you replace these?? Your company should be buying them, NOT the three of you. See where I am going with this??

            Your company should be it's own "living and breathing" intity, that can support not only the three of you, but itself too. Your company will have office and shop rent/morgage, a secretary, accounting fees, equipment and trucks to purchase and maintain, etc. For now, as owners, the bulk of the money will flow BACK to you, but you will have your numbers straight and be prepaired when it comes time to hire employees. Over time, if you do things right, each of you will be managing a crew and probly one of you will take the roll of full time sales.

            It may sound simple and be simple now, but set yourselves up for growth. If you do it right now, it is much easier to grow without hitting a brick wall.
            Jeeps are like women.....much more fun with their TOPS OFF!



            A society that rewards based on need creates needy citizens. A society that rewards based on ability creates able ones.

            Do you guys think Obama is going to kiss us after he is done with us or is he going to put on his belt and head out the door?

            Comment


            • #7
              Thanks...

              We're looking into going LLC for next year to at least be a licensed business. As far as insurance, we really need to talk to someone to learn more. I appreciate your input on the separate entity thing for business; this summer, we (or at least me) have to hand almost everything back to our parents for tuition, so we needed to be saving money thruout the summer. I need to explain to the guys that "company money", when push comes to shove, is exactly the same as "our" money, it's just easier to work out and less painful to part with (the way it's set up now is similar; we subtract all expenses from gross then divvy profit...however we really have no reserve $ for potential problems). I think it would make us all save better. Appreciate the advice.

              Comment


              • #8
                njnewbie ...

                Your main problem is that you are using the wrong marketing "methods" ... to accomplish your short range goals (5 years) ... you are confusing the "mix" ... of thoughts and concepts.

                Comment


                • #9
                  Originally posted by njnewbie
                  We're planning advertising in March, and my idea for our flyer would be to advertise one (or more...ex gutter cleaning+mulching) FREE landscaping job...be it a medium-size planting, mulching, cleanup, sod-laying, whatever..."up to $500 value" (maybe even more...going by area standards
                  Very bad idea. For more reasons than i feel like getting into. Im crammed w/ #s and up to my ass in paper or id expand on this. But i really felt i better save you from yourself.

                  Ive read a few of your posts the past few days. This thread in particular,, and a few other threads really show your putting thought into this gig. Perhaps feeling things out. Trying to figure out where your going w/ this gig? Something must have tickled your funny bone thus far. I like all the thought your putting into this show.

                  My general quick witted advise to you thus far.

                  To many cheifs. Break off on your own,, quit splitting your profit 3 ways.Your all better off that way.

                  Start thinking of a more conventional way of building your show that doesnt include a bunch of FREE work.

                  Quit pu$$y footing around. Sounds like youve already made your mind up to do this. Whay next year? Whats wrong w/ this year. Drop the goons and get an early jump on fall. Build and obtain accounts this winter,, than polish them off next spring. Done w/ enough enthusiasm youll have your 100 accounts by may of 05 and its all yours. Just do it.
                  SENIOR MODERATOR LSF COMMUNITY CONTROL CORDINATOR
                  Have a Nice Day, from the Lawn Service Forum S.A.S.M
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                  • #10
                    develop an "owners salary" that is a percentage of sales and you should set a goal for company profit.
                    What is an average percentage of sales that most owners are taking?

                    I've been paying myself a salary based on my personal budget needs for the past three years, but I've been thinking about changing to the % of sales method.

                    Comment


                    • #11
                      Originally posted by RRS
                      What is an average percentage of sales that most owners are taking?
                      Percentage? F**k that. I take my salary plus anything else i want.
                      SENIOR MODERATOR LSF COMMUNITY CONTROL CORDINATOR
                      Have a Nice Day, from the Lawn Service Forum S.A.S.M
                      www.lawnbook.com
                      www.lawnservicing.com
                      Click Here: For Lawn Care Business Kit
                      Click Here: For FREE Marketing "Mini-Course"
                      Please ask questions about the business here, I'm unable to answer them 1 on 1.
                      Please Visit Our Sponsors, They Make this Forum Possible!
                      NOW AVAILABLE FOR FREE LSF IN 5.0 !!! JUST PM GRASSMASTER TO GET YOURS TODAY!!

                      ""POYMIT"

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                      • #12
                        Seascape

                        I wish I had dropped the other two earlier, but it's not so easy now. Luckily, the two of us who are most committed are staying with it; the third guy is going to the police academy and is out. So it will be me and my best friend as partners next year, which hopefully won't damage the friendship (and I think trying to oust him from the Co. would do more damage than getting on each other's nerves at work). I realize it was a mistake going in with partners, but two owners should be at least workable. The other problem is that we both go away to school. We'll be coming home alternate weekends to cut until mid-October, but as far as taking on fall and winter jobs, that's pretty much out of the question. However, we both have very good jobs at school and will have a nice chunk of change to put into the business if need be come March. I appreciate the input; I think we all need a fire lit under our ass. I'm realizing that with 11 or 12 accounts by myself I'd be making the same money as the 30 we have no, and that's frustrating as hell. But anyway, thanks for the advice.

                        Comment


                        • #13
                          Percentage? F**k that. I take my salary plus anything else i want.
                          How did you come up with your desired salary? Did you base it on personal budget needs like me. I was really just wondering what percentage number people that pay themselves this way are using and how they got it.

                          Comment


                          • #14
                            Originally posted by RRS
                            How did you come up with your desired salary? Did you base it on personal budget needs like me
                            Basically.When i first strted i just ran everything out of my co. account. Whatta mess that was. My second year i decided $400 per week,,, now every thursday at midnight $1000 is moved from my co. account to one of my personal checking accounts. If i want more on tuesday or want to buy a large ticket item i go get more or just use my co. visa debit card.

                            I have no interset in trying to meet a quota of any kind. X amount of sales to compensate my salary. I sell everthing i can and want and thats as good as it gets. It is what it is.
                            SENIOR MODERATOR LSF COMMUNITY CONTROL CORDINATOR
                            Have a Nice Day, from the Lawn Service Forum S.A.S.M
                            www.lawnbook.com
                            www.lawnservicing.com
                            Click Here: For Lawn Care Business Kit
                            Click Here: For FREE Marketing "Mini-Course"
                            Please ask questions about the business here, I'm unable to answer them 1 on 1.
                            Please Visit Our Sponsors, They Make this Forum Possible!
                            NOW AVAILABLE FOR FREE LSF IN 5.0 !!! JUST PM GRASSMASTER TO GET YOURS TODAY!!

                            ""POYMIT"

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                            • #15
                              Yeah, that's what I've been doing the past three years. First year paid myself from the company account (huge clusterf#ck at tax time) second year $300/wk, third year $400/wk, and this year $500/wk.

                              It's all based on what my personal budget needs are. I don't have any kids. The only personal bills I have are my $290/month rent and house bills. The rest goes to support my habits and $300/month to savings. The company pays for my truck, fuel, phone, insurance, etc.

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