Biz volume needed to support maint. startup [Archive]

Stonehenge

02-21-2003, 08:39 AM

Let's say I know this guy who owns a landscaping company. :D Let's say this guy has got a decent amount of tools and equipment to do both hardscapes and softscapes. :wha: 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

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

02-21-2003, 06:00 PM

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

Bexter

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

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

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

02-23-2003, 08:29 PM

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

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

02-24-2003, 08:43 PM

Bexter - you hit the nail on the head. :doh:

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

02-25-2003, 02:07 PM

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

Stonehenge

02-25-2003, 02:35 PM

Always considering my options....

Nebraska

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

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

03-03-2003, 08:14 AM

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

Nebraska

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.

Lawngodfather

04-13-2003, 11:05 PM

Originally posted by Nebraska
I have always said that if my business evolved into all fertilizer and maintenance minus the mowing I would not loose any sleep. That's where I am going, for many many reasons.

For what other LCO's are charging now a days, you must adapt to the way the market changes.

For a start up, it can be done very inexpensively.

If you have a truck $5,000 would get you a good mower, and other related tool. Also considering used for a start up is not a bad idea either, you don't like how it is doing, you don't take the initial hit on the mowers, the rest of the stuff, I think most any landscapers have anyways. You would just be short the mower(s).

$2400 for a belt drive 48" WB

$1,000 for 2 trimmers 2 blowers

$1,000 trailer

$500 for other.

1) you are ready have ins
2) you already have a name people trust
3) you already have a data base of potential clients
4) you already have most of the tool.

Nebraska

04-14-2003, 09:07 PM

Here is an exerpt from an email from a current customer..... The crew that handles this property can easily fit this into their routine.....this one started out as mowing only....

I would like you to take care of two additional tasks for me each time you
mow;

a) Pull weeds in all flower beds and cracks in the cement of our back pool
deck around
the hot tub.
b) Check lights in back yard, under eaves of house and along front flower
bed and change if needed.
We can keep the bulbs in the garage at an agreed upon place so you can find
them when you come.

I am finding myself swamped with work and just not getting to these items as
needed.
I understand you just charge for your time, let me know your hourly rate and
increments for billing.

Lastly, do I recall correctly that you could also handling trimming of
bushes and adding mulch as needed?
If yes, let me know and I may just have you handle all maintenance

site

04-27-2003, 03:53 PM

I would suggest against the maintenance world- unless you have a dedicated trustworthy employee who can take care of it for you. And if he she is too good they will try to steal it from you eventually. I tried maintenance for 3 years thinking exacly along your lines, but it was one big unprofitable hassle. How may complaint phone calls are you willing to field regarding clippings in beds, or long grass after a week of rain? Who will take care of the route when the main guy quits or gets sick? Who will drop everything and drive across town to show the main guy how to put new line in the trimmer for the 15th time? Who will apologize to clients after someone mows over prized petunias? Who will spend 8-10 hours a week billing (or chasing) clients who owe $90? Who will finish out the season when the main guy quits on October 15th? I had to answer all of these questions and a hundred more just like them repeatedly in my three long years of maintenance. I dumped it last year, and boy am I glad.

mdvaden

04-29-2003, 02:00 AM

You don't need the money to start a 2 to 3 man crew from scratch. You need the cash to start a ONE man crew.

The maintenance starts with the first job. That's only enough for 1 man for 1/2 hour to 2 hours on part of a single day.

The main outlay is less for the one man than for 3, but maybe not massively different.

1, or 3 man crews will use one truck. And one trailer. That is the same.

But you will not start with 3 mowers, 2 edgers, 2 trimmers, 3 rakes, etc..

Also, 1 man can start with a truck alone, with a mower rack that inserts into the hitch reciever like a shelf, leaving room in the bed for trash cans of clippings.

Initial maintenance will need to start with one person from the construction crew shifting to the single maintenance account, and then the second as it comes in the second week and so on for a few months. Then a maintenance employee can be hired.

One alternative to jump start the process is to buy out a small company that had decent quality accounts already going.

cutntrim

11-29-2003, 09:01 PM

Well, if you're interested in yet another opinion then here's mine. I'd say you'll be fine if you start up with ; one guy, one 36" belt-drive WB, one 21" trim mower, one straight shaft trimmer, one backpack blower, and a truck w/drop tailgate and bed racks for equip, or a 6x12' trailer.

Maybe a summer student can act as a "float" guy to help out the maintenance guy on days he needs it. Sounds like you'd have plenty of leads with current/previous landscape install customers and you can advertise inexpensively in local paper to corral some more.

Being a landcape install guy, I'd bet most of your leads would be interested in garden maintenance (i.e. weeding, pruning) at least as much as cutting & trimming, so you need someone who knows an annual from a perennial and is detail-oriented.

I'm sure if you go about it the way you appear to have done so with installs, that you'll do fine.

P.S. Oh, and don't mean to sound chauvanistic, but girls are generally better at garden maintenance (read-WEEDING) than guys. Most guys loathe it and do a half-arsed job while girls seem not to mind and can do a very thorough job. On the other hand, guys are physically stronger and perform much better at cutting and trimming especially with push mowers and belt-drive WB's. Good luck.

Pelican

11-29-2003, 10:01 PM

I run a 2 man crew, a truck/trailer loaded with small equipment.

I've got $25-30,000 invested in mowers, small equipment and hand tools. I haven't seen anyone mention leaf cleanups yet, I've got a truck mounted vacuum that cost me about $3500 to build including the box.

I don't make much money at all in this end of the business, there's a lot of competition from illegitimate businesses. It gets my trucks into the neighborhoods though, and I get a lot of work from my rolling billboards.

Finding quality help to run it is the biggest obstacle. I spent too much time this season going out and correcting complaints the my new foreman had generated. Figure on dedicating at least 2 weeks of your time to training before your crew is ready to solo. They'll probably need a "refresher" now and then too.

I've considered dropping that end of the business, but hang on to it for the reasons I mentioned, plus it is steady monthly income.

cutntrim

11-29-2003, 10:43 PM

Leaves can be done using a backpack blower, a rake, and a tarp to haul them to the curb or dump them in the pickup. Then cut the lawn with the mower to bag any remaining leaf litter.

Will Pacala

11-30-2003, 12:23 AM

Pelican---By rolling billboard do you mean the trailer or do you advertise with an actual billboard??

Pelican

11-30-2003, 10:32 AM

Will, I'm referring to the trucks which are kept clean and lettered nicely. They attract a lot of business.

Will Pacala

11-30-2003, 10:52 AM

So I've heard. Sorry,,I said that because there is a workout gym that actually has billboards mounted on small trucks and trailers. He just moves them around place to place, they get him alot of business. He started out with one gym now he's got about 20 locations.

GLAN

11-21-2004, 08:57 AM

I don't know how many years some of you have been in the industry......I recall a thread about adding the accumulated years of the fourm.

Anyway......

You all maybe interested in this.

Remember Desert Storm? Fall of Communism in Russia? Down sizing of the Military?........way back in the early 90's?

The country plumeted into a deep recession......

Through out the industry, across the country the market for landscaping pretty much came to a screatching halt.

Install only firms were left high and dry.....those that could wait it out and continue with the severly reduced work load survived. Those that were not situated to ride it out closed up shop. Hundreds across the country closed up.

Well what is one to do in that situation? Many gave it up and found work else where or started other businesses. Some saw the maintenance field as a way of staying in and maintaining the customer contact base....So that is what they did......They went into maintenance and continued their installations of hard / soft scapes.

Ever since then I have read many times over the years in trade magazines that design install companies more and more are seeing the value of being in the maintenance end of the business. 5, 10, 20+ million $ design install firms identified the necessity and worth in providing maintenance. It made more sence to do that for their install customers.

I operate the same way........I do very little work outside of my established customer base......I market my listing heavily. I do it all for them......For the occasional out call for design/install.....we grab the maintenance........Why would I want an outsider responsible for my installation work?

Now as others have said.......The influx of new start ups is trememdous and competing with the Gypsy can be frustrating.....you are over looking one thing. Your name, your reputation. The name recoginition and reputation that you have already established...............That alone reduces the affect the fly by night will have on your efforts.

I am not competing with the new start up......They are competing with me........that is why they have to under charge me. And the same will be for you.... I am not worried about.............Potential customer tells me they have a guy less than me.........OK fine......I am not competing with them so my price is what it is take it or leave it.......only reason they called me is cause of Name recognition and reputation.

I wrote this not to necessarily have you all jump on the band wagon and do maintenance.....I want that for myself :) Just consider the potential

Green4Me

11-21-2004, 11:46 PM

Excellent article for reference in Pro Magazine Set/Oct 2003, about Tim Snyder, Diamond Cut Landscaping in New York. This looks like a first class operation to study.

NC Lawnscapes

11-22-2004, 03:29 AM

Glan you are 100% right

Now waht about us who Do mostly Maintenace and sub out BIG installs

GLAN

11-22-2004, 08:55 AM

Originally posted by NC Lawnscapes
Glan you are 100% right

Now waht about us who Do mostly Maintenace and sub out BIG installs

That would be pretty nasty if the installer went behind your back and solicited your customer for maintenance.....after all where did the job come from? and who made the customer feel comfortable using the installer?

GLAN

11-22-2004, 08:59 AM

To expand on my other post.

In the trade magazines........They often run an article on some outfit. Pending the type of magazine they feature Install firms or Maintenance firms......Doesn't matter.

When they do an article on install firms........how often do you see in the break down of the company that they list maintenance and that % usualy seems to run 10 - 20%.

I have been seeing more and more

NC Lawnscapes

11-22-2004, 11:32 AM

TRUE Glan but I use an Installer who has no desire to do maintene and In fact he is also my nurseryman and He sends me more maintence work than I could ever send him Install jobs.

I am a one or 2 man op depending on the time of year and weather or not My help has quit (like last week) and I have enough sense not to take on a job that I cant handle so For me it works out Great but for a maintenance crew that has 5 or more employees it may not be in there best intrest to Sub out anything short of a parking lot

MIKE MC

12-02-2004, 10:58 PM

I would use a half ton truck(5000.00) and a light trailer(1500.00) for better fuel mileage. But i would spended a little more and buy a zero turn mower maybe a 52 with a 20 hp for (7500.00) to start with because you will end up with one anyway because one will out mow two walk behinds by the end of the day,one small belt walkbehind, (2500), blowers(300), trimmers (600), hedge trimmer(350), edger(350) , a bagger (300) to pick grass up when needed, cheap push mower hopefully not used much (250). Around 19,000. Most people who have there lawn mowed also have someone do the fert. I would also do that will you are there. stay in as small of an area as you can to reduce drive time which will be hard because of the reason that you are expanding into this , but if you get another hardscape job out of it I think it may be worth it.

Bill Schwab

12-03-2004, 10:19 AM

Unless people in your area value maintenance services so you can get the price your service is worth to support a well trained, conscientious crew, no amount of money would get me to begin maintenance.

In our area, many talk the talk, they are all sick of the service they get from Juan Valdez and his illegal alien workers, and, in the same breathe, when you bid what it costs to do the job right, they all gasp. So, the question has to be asked "Do people value the services we provide?" and Will they pay what that service is worth without major time invested selling them on that service?

Until we put a wall along the gulf of Mexico to our western shore, it will never be worth going into maintenance in our area, at least in my opinion..

Lanelle

12-03-2004, 08:00 PM

One way to expand is to do the 'gardening' part of the maintenance, if you don't want to mow. This is a hort. service that can be sold with the new install. Tell the customer what your standard plant warranty is and then tell them that you'll extend it another year or two if they sign up for your maintenance service. Only problem is that its hard to keep a crew busy without doing the mowing. Here, there are companies that just do estate gardening. In fact there is a company that operates a gardener referral service, matching up estate owners with small gardening companies.

Lanelle

12-03-2004, 10:10 PM

To answer your original question: I would expect a two-man crew to generate $120K revenue in mowing and related maintenance for the first year or two.

spiderlily

12-04-2004, 12:19 PM

We only do lawn if there are gardens to take care of, too. We used to just do just the gardens, but it's nice to be able to offer a whole maintenance package.

We charge the same hourly rates for maintenance that we charge for install. I know you couldn't get away with that in some markets, but I am sure glad we can.

GLAN

02-17-2005, 02:28 PM

Bill

Your post just above is a true fact......What you describe is exactly what I have been facing the last couple years. It has become more difficult acquiring new customers...........not impossible, just not at a growing rate I was accustomed to.

The area I am in has become saturated with LCO's. On any given street that may have 30 homes. There can be as many as 10 - 15 different LCO's. Of that there are only 2 or 3 realy reputable landscapers and from one year to the next you can see the change over of fly by night companies.

But yet..........the legit, reputable company is not gaining all the much.

Pricing has stagnated..........Weekly charges are devalued by about 25%. However...........some of that can be made up on other services. Provided you are doing full service......Spring - fall cleanup. Lawn applications, shrub trimming. Enhancements via annuals, perennials and so on.

As bad a picture I am portraying......Name recognition, reputation and logevity is in my favor and is the only thing that allows me to maintain a pricing level that is above most. And I can maintain consitent customer base and some growth

GroundKprs

03-13-2005, 11:23 AM

GLAN has important point above in the stability of maintanance work in lean economic times. But many of the landscapers now in maintanance do it grudgingly because they feel they are forced into it by this reality. Maintanance section of most full svs biz's is the grunt division, the entry level job. Can be a good thing and a bad. Expect high turnover, but a finding good person could be a welcome addition to a growing landscape branch.

Unless you really work at high end of clientelle, expect lesser ROI on maintenance division. Avg ROI on maint is 10%, landscape is usually 15%, with high end companies going up to 20%+.

I made a conscious decision to be in maintenance only 25 years ago when I started in the trade. The basic reason was the stability of work. Plants don't care what the economy is doing, they grow and need care. But that $1K or $100K install or modification can wait if cash flow is down at home or at the office.

If you are already in high end, and they are asking for maintenance services, with a good plan you can make an easy go of it. It took me 10 years of being just in maintenance to achieve the reputation, but since then I have signed maintenance contracts of double the fees of the previous contractor, simply because the client had observed that the appearance of my properties matched his perceptions for his property.

Another big plus for maintenance is the exposure of company name. A 2-man landscape crew tied up on a big install for a month only gets exposure on one block, and their work might not even be visible to the passerby. A 2-man maint crew would have continuing exposure on 20-60 locations each week. And because of the regular contact, my clients often ask my recommendation on other landscape services. Your crew would of course recommend their sister branch.

Dale Wiley

03-14-2005, 11:19 AM

Market conditions often determine how your business will be structured.

A local company has done an excellent job of providing very high quality services at competitive prices. Very structured and organized. Profitable.

We bid maintenance jobs at the same rate as construction jobs, as that is our dollar cost / income averaging model we use. The clients have no idea how it is based or cacaluated. With a very scripted and repititious system, we average over $ 43 per man hour, or more than 30%. This will include our residential, commercial and municipal work.

Being very organized is key to being profitable in maintenance. Estimating is a no brainer, its all about the square feet.

We have about 20% total maintenance work right now, and thats fine with me.