How a lawn care business implodes.

We can learn a lot from a business that is doing great as we can from a business that is failing. In this story, shared on the Gopher Lawn Care Business Forum, we get an inside look at a company that is suffering a slow death. It’s quite amazing to look at from the outside, but from the inside, I get the feeling the business owner really has no clue what to do or where to go. He is captain of a ship with no rudder, heading towards a rocky shore. Consider the lessons discussed in this story and use them to improve your company.

One lawn care business owner wrote “two seasons ago I started working for a local landscaping company. I had just graduated from college and was debating whether to keep going and get my CPA or get a job. I decided I would get a summer job and keep going to school in the fall.

My roommate at the time was working for a local landscaper and said they had lost a guy and that the owner actually needed some help with this accounting. So I asked my roommate to get me an interview hoping to do accounting work for a couple of days and landscaping for the others. It would be an ideal situation.

I got the interview and the job. Most of the summer I worked for the guy doing landscaping and no accounting. I kept approaching him about his needing my help with it. Finally towards the end of the season he said I should go to his place and look at his financials. In short it was terrible.

To understand how this company got to this point, let’s go back and learn it’s history. This entrepreneur has 10 years of landscaping experience. He’s great at landscaping but a terrible businessman. He started his company 10 years ago with a partner. The partner took care of the finances, books, etc and helped out in the field 2-3 days out of the week. The current owner did all the estimates and day to day handling of the crew. Well, they split off two years after they got started and the other guy began his own landscaping business (which is now one of the more successful ones in town).

This business owner underestimated the importance of good accounting practices. When his partner left, he wasn’t sending in his taxes or any filings for that matter. When I finally got to look at his situation, he had unopened federal and state tax letters dating back years.

During the time his partner left, he was having family problems with his stepdaughter and it caused a separation between him and his wife because he kind of just stopped caring.

After sifting through his big tax mess I finally got him to start paying the back taxes and fines. This severely effected his cash flow. I also figured he wasn’t charging enough on his jobs to begin with and that he was losing money on a lot of them. He thought he had low overhead but in reality he wasn’t including everything he needed to. In addition, his crew was not very efficient.

Since he operated his business out of his apartment and rented a garage to keep his tools in, he thought his overhead was basically his trailers, his mower, and truck. But in reality he was missing his taxes, fuel, employee expenses, insurance, his own salary, and much more. He wasn’t accounting for the time it took him to do estimates or the time he spent buying materials, going back and forth all day to drop them off.

He did get quite a bit of work. We usually had 4 guys busy all week, but he was always running back and forth delivering materials to the crews when we split up and more often than not we had to wait on materials which created a lot of wasted time. His employees were just so slow and not trained well. If a problem came up, they always wanted to wait until the owner came back to tell them what to do instead of fixing it themselves. Without supervision, the employees were not motivated enough do their best.

Anyway, after two years of seeing how a company that was started 10 years ago had an owner still living in squalor in a ratty apartment with no savings to show for it and a very limited future, I decided it was time I left. There was nothing I could do to change the way he saw things. The way he felt his business needed to operate. The way he needed to properly estimate jobs.

For a fraction of what I thought I would need to get my own business started, I was able to get going myself. I actually made more money working part time with my own business the first season than I did working for him all last year full-time! I learned a lot of lessons from this and I wanted to share them with you.

What I have learned from this is:

1. Keep friendships and business separate.

2. Just because you are good at something doesn’t mean you will be good at owning a business in that field.

3. Find trustworthy employees and learn to value the good ones.

4. Pay your taxes.

5. Hire a full-time accountant/bookkeeper when possible or learn how to do this yourself.

6. Know your costs (figure out how much you need to make for yourself on top of your operating costs.) If you are still living in an apartment after being in business for 10 years, you are doing something wrong!

7. Plan ahead.”

Order the book “The Lawn Care Business Can Get Dirty, Ugly, And Mean.: Stories Of Survival And Success To Get You Through The Rough Times” today.

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