I Talk to Strangers
Landscapers are always trying to sell and buy equipment from each other. Today, a guy mowing a lawn next to my client’s house asked me if I was interested in buying his 2003 Ford F350 XLT with 39,000 miles on it plus an extended warranty. After several years in the business he decided to become a public school teacher. I can’t blame him. Right now he has about 70 accounts all over the place. He’s grossing about $110,000 a year with two guys working for him. After his payroll (cash) and overhead there isn’t really much left in the way of a profit for him. At least in comparison to what a teacher gets paid. He’s selling the accounts and equipment for about $40,000. That translates into about 2 months of maintenance fees per client or $250 each assuming they all sign up with the new owner. Lifestyle lawn businesses just don’t build up equity.
There is still hope. A local lawn chemical company with about 1800 customers sold for over $1,000,000. That is about $555 per customer. Now bad for only having to make 6 service calls a year. Most mow, blow and go guys cut every lawn over 30 times a year in the Northeast plus the applications, cleanups, and pruning. In other words, that same three man crew servicing 125 yards a week could instead be servicing twice that a month. One lawn crew at 125 yards a week equals a sale price of $31250 per crew versus a specialty crew doing 250 a month for a sale price of $138,750. That is 4.44 times as much for the exact same workers!
I haven’t talked to enough people to find out why there aren’t more people only doing chemical applications, seasonal plantings and pruning. It seems that those are the most profitable areas and require the lowest overhead. Plus it takes one person a few minutes to broadcast an application versus a crew of three to fly through a lawn. By offering all three services, there will be more opportunities to develop relationships with customers than just one. If your at least one person on your crew is truly knowledgable, you customers will be happy to just find the cheapest lawn guy to mow their lawn and at the same time pay you a premium for your time. Don’t believe me? I’ll be doing just that next spring.
November 18th, 2007 at 1:27 pm
[...] of $9 for every person who signs up for their service. Mass mailings are too expensive. Read my earlier post about the landscaper going out of business and you’ll see I can’t buy even a single [...]