Where do most lawn care businesses get tripped up when it comes to growth? It seems the big answers are, growing too fast and losing money due to non-payments. Here are some great lawn care business lessons from a veteran who has had a lot of ups and downs in his entrepreneurial career thus far. Hopefully the heads up he shared with us, on the Gopher Lawn Care Business Forum, will keep you on a proper path for steady sustainable growth.
He wrote “I started my lawn care and snow plowing business over 8 years ago and have been doing pretty well so far but I sure have had my fair share of ups and downs. Over the years the ups and downs we’ve experienced could have easily knocked us out of the game many times. If you are lucky, when this these things happen, you learn from them, write them off, and move on to better times. We’ve had some real issues I want to share with you in hopes it can help you survive them.
One of the problems we had is that everyone, including us, try to grow their lawn care business as fast as they possibly can and trust me, fast growth will eventually come around and bite you in the ass.
For us, we had gotten caught in bad financial binds early on by taking on large mowing accounts and running out to buy equipment before we even got our first payment. Then after purchasing the large mowing equipment, we saw a handful of those jobs disappear along with the companies that hired us. So now we won’t buy any lawn care equipment for specific jobs until we have the accounts and they are paying.
We also don’t push our staff as hard as we used too. That is the quickest way to get employees to leave you. It’s ok to have your crews working 5, 10 hr days, but when they start working 6, 12hr days you are going to be losing employees fast, so before you get to that point you better be thinking it’s time to add another lawn mowing crew.
The new lawn care guys, always think those big lawn care accounts or big landscaping jobs are the greatest thing in the world and they will do anything to get them. When I say anything, I mean they will bid them way to low, sometimes even so low, they lose money on the jobs. But the truth is, more often than not it’s those big landscaping projects are going to hurt you. We do some large landscape projects when they come to us, but most of the time we make more money off the smaller projects. Large projects just keep your guys busy and make people go look at them. But because of their profit margins, it’s the smaller ones that consistently make better money.
A second issue we ran into a lot is getting paid for the work we did. The importance of this is so often overlooked because of the desire to be out there constantly working. Sometimes we end up working f0r free because we just lose track of the goal, which should be to perform the job and get paid.
Last year I lost $24,000 in non-payments. Anyone in the lawn care business knows that your going to get stuck at some time. The bigger you are, the more you stand to lose. Since last year, we have totally changed the way things are done in terms of payments and stuff to prevent such a loss again.
One of the biggest things we changed in our business operations is that we watch for clients to start skipping payments. We keep an eye on how far they are past due. Now I am not afraid to call them and just remind them their accounts are past due. Another thing that newer lawn care business owners are afraid to do is stand their ground when it comes to collecting payments. I know I was. But it is important you learn to tell your client ‘Hey we can’t do this next landscaping project or even weekly mow until you make a payment.’
I invoice more often now too. When it comes to snow plowing, I invoice after each snow fall and send out invoices every two weeks on lawn care. Landscaping is invoiced when the job is completed. If it’s a home owner, we need payment the day we are done with their landscape project, before we leave.
A big key to success is to ask for down payments for projects before they get started. Anything over $500.00 we will need a down payment. Any landscape project over a few thousand, we have our law firm do a background check on them before we start work! That’s how serious I am now with making sure I get paid.
If you do none of this and find yourself dealing with late payers, the way you should handle it all depends on the amount that’s due. You should try to deal with them in person or over the phone at first, in a friendly manner. Then if that doesn’t work, get to know a local lawyer and turn it over to them. In the long run, taking someone to court only works out for you if there is a large sum due. Most people know that you will never take them to court for smaller amounts so threatening legal action won’t usually help.
A really good option you should consider on larger landscape projects or even for annual lawn care customers is have them write you post dated check(s). This is a great tool, because if they bounce that check, then it’s a crime and you will get your money.
So keep these suggestions in mind and be a little proactive with your lawn care business. Don’t wait until you are too far behind to try and catch up. Instead, keep things moving and hold your customer’s feet to the fire when it comes paying you on time.”
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