Lawn care business owners are in business to make money. It’s plain and simple. But are there ever times when it is alright to accept a lawn care or landscaping job when you know it won’t be profitable? Are there any upsides to doing this and if so, what are they? That is what one lawn care business owner questioned on the Gopher Lawn Care Business forum.
He wrote “today I was thinking about the concepts of bidding lawn care jobs. Normally, if a customer does not accept an initial bid price, it’s probably better for the lawn care business owner to walk away instead of doing it for an unprofitable price. But there are occasions where you might want to reconsider and accept jobs which you know ahead of time will be unprofitable.
One I can think of is for cash flow issues. Sometimes, a lawn care business owner needs immediate positive cash flow into his business today in order to cover expenses.
A second could be in order to retain employees. Depending on your climate and where you live, many lawn care business owners will lay off employees during winter due to a drop off in the demand for their services. Any employee that is laid off will often find other work and may decide not to come back to work for you in the spring. Accepting some unprofitable jobs might be able to bring you in just enough cash to pay an employee so he won’t leave to find other work during winter.
A third reason might be to trim down stock that would go bad over the colder months. For example, lawn seed can be expensive. To reduce cost your costs, you may purchase lawn seed in bulk. If you buy too much seed during the year, you will have a surplus that may last you into winter. If the unused seed is being stored, it may go to waste or possibly take up valuable space in your shop. If winter is coming, you may agree to take on an unprofitable seed job in order to get rid of the excess seed.
Lastly you may find an unprofitable job may bring with it the promise of future work or advertising. This is probably my least advisable reason for taking on unprofitable work. Sometimes a lawn care business owner feels a customer will have more jobs in the future if he will give a really low price on the first job. Before you go ahead and do this, realize it is a dangerous proposition since that extra work often fails to appear.
With all these reasons stated above, I am not advocating you take on unprofitable landscaping jobs. Each job has to be examined on a case by case basis. If you take on too many unprofitable jobs, you will soon find yourself out of business. So, be wary and take on these jobs for specific reasons that you can rationally make sense of.”
Another lawn care business owner shared “I would never take on a job if I knew in the very beginning it wasn’t a money maker. Sometimes jobs don’t turn out the way you thought they would and those become money losing jobs. If this is something that couldn’t have been helped, you mark it as a lesson to be learned from and you go over everything in detail about that job 100 times until you find why you lost money on it. Then in the future you can fix it and not make that same mistake twice.
When times are tough, they can be made tougher by taking unprofitable jobs. If it’s just labor lost then is it really a losing job? No. It just means you didn’t make as much as you wanted to. If you find your family getting hungry then yes I would do a job for less money if labor is all that was involved. If I had to buy materials of any kind for such a job, then no I wouldn’t do it.”