When you don’t have a full grasp on your business operations, disasters can sneak up on you and cause your business to implode upon itself. If you have never seen how such an event can happen, this discussion on the Gopher Lawn Care Business Forum is a great example of how things can go bad quickly. I hope it is a wake up call and helps you to get more focused and determination to run a stream lined and efficient lawn care business.
One lawn care business owner wrote “business has fallen off 100% but the cost to do business has gone up. I found myself yesterday taking money from my personal checking account to keep the business afloat for a little longer. I have been on the phone non stop trying to entertain different advertising ideas to pull me out of this funk. The local phone book wants $1,200 per year for a 1/4 page add, that’s $1,200 the business dose not have. My regular advertising has produced no calls as of late. It may just be time to close down this business and move on with life. Any suggestions for a last ditch effort to survive? Spending a ton of money is out because I worry the more of my personal money I sink into it the more I will lose so I am kinda screwed.
I have done all I can with past clients to see if I could perform more work for them. I got some back, didn’t get others but what I did get back has not been covering the bills. As far as advertising I never stopped or changed what has worked in the past really. I went from barely being able to keep up with calls for new service one day to none the next day and it’s been flat lined ever since.
In 3 months I got 3 calls, did 2 estimates and never heard back, missed the 3rd call and returned it, left a message and never got a call back.
I am working out going door to door with fliers the problem is the money is gone. Until I get some checks from some late paying customers, the business has $25 to its name, meaning the fliers will come out of my pocket. My wife and I set a rule a while back that we will keep the business going so long as it pays for itself. We don’t care if it pays us but it has to pay for itself.
Last month I got hit with licensing renewals, postal renewals and everything all at once that depleted the business accounts. At first, I was not worried because I was counting on my late paying customer checks to come in but to my surprise they have yet to appear.
Now I am worried that if I start funding the business myself the market will not improve and I will just be flushing my money down the drain and not only have a broke business but be broke myself. The last time I funded it myself I did it in the way of a personal loan or investment payable back to me in monthly installments with interest. That way I was sure I would get my personal money back but I lost thousands of dollars when tax time came around and the IRS said it was illegal for me to loan my business money. So this time if it costs me $40K to keep the business going another 4 months and if things dont improve I can kiss my $40K good bye.
I have 2 kinds of customers. The ones that grow the business and the ones that support the business. The ones that grow the business are the $20K+ jobs that pay for a new tractor or truck or whatever, and the ones that support the business are the regular scheduled maintenance jobs. The big jobs have not slowed down but are too few and far between to support the business. The regular scheduled jobs have just about stopped coming in.
Basically I think I made a big mistake in that I grew the business far faster than it could support itself and in one fail swoop it imploded in on itself. This became painfully clear when all these renewals and fees came up they just sucked everything out of the bank. I about blew my gasket when I was informed I was operating 2 months after some licenses had expired.
Now I am depressed because I have just enough gas in the truck and in cans to get to my next regular job and thank god they called and said they had a check waiting for me. Early on, it seemed my bank account was always overflowing, cash flow had never been a problem and I have never had to pinch pennies and try to figure out finances like I have in the past few days, very stressful indeed. The bottom line is we grew very fast, then new calls for service in one day just stopped all together. In three months I have had only 3 calls and didn’t get any of the contracts so the only way out in my mind is to greatly reduce the business back to a self sustaining level but I have no idea how to do that. We were just in the middle of a very exciting expansion and were getting rave reviews and had a lot of good prospects and now I am worried by not only putting said expansion on indefinite hold. By reducing everything to a self sustaining size I fear it will make us look very bad as well. It’s like a catch 22.
One last problem I have faced for years is not having services to offer during the winter months. It’s getting to that time of year when calls normally slow down for summer services the problem is I really don’t have any winter services to offer. That’s fine when you have money in the bank from a successful spring and summer season, but when things are slow on your busy months, it’s the winter months that can put an end to your business. I have no equipment to offer winter services and with cash flow what it is, I doubt the accounts will be at a level to buy the equipment before winter sets in so I just don’t know what to do.”
A second lawn care business owner said “first, I find it hard to believe your bank was overflowing, since you are now limited on funds. I think you might have thought you had more money in the bank than you really did. This problem can occur when you have no real understanding of a budget and no grasp of what your operating and overhead costs are.
If you really want to get your business back on track I would start by reading a multitude of business books on the following topics.
1. Marketing, Marketing on a Budget, Guerrilla Marketing ETC.
4. Any other business book you can get you hands on.
To drum up new business, I would suggest going back to the basics and going door to door. Make sure you dress professional while doing this.
Make a monthly budget stick to it. Don’t just buy stuff because you ‘think’ you need it. That is one of the biggest mistakes you can make in this industry. Focus and only buy what you need.
I weigh my priorities all the time and only spend a certain amount of money on expansion each month. Also keep six month worth of expenses as an emergency fund in your bank account at all times and don’t touch it except for an emergency, Know when you license and bond renewal fees are going to need to be paid and have money set aside for them too. Don’t let any of these standard bills sneak up and catch you off guard. If they do, it is a sign you are not operating your business properly.
Also marketing dollars are not even effective if not focused properly. Stop advertising in the phone book and get more online classifieds etc.
Vinyl signs on your truck is money better spent than a yellow page ad.
If and when you get your money flowing again make sure you figure out where you went wrong with your operations and get a better handle on it so it doesn’t happen again. I hope this helps good luck!”