Office^
Got a new iPad Pro. Love this thing. All the business runs on web apps anyways so I don’t need any windows software or powerful programs. Can do basically anything on this.
Stores great, looks great, great battery, I love working on it.
Have been creating org charts, training material, SOP’s and systems on notion all day.
Super ergonomic. Table slides right over my lap and it’s comfy sitting in the chair.
BrainFM playing on a home speaker. I take breaks and have a coffee and play guitar.
We are expanding to buy riding mowers and take on more work since we turn down a lot of it and it’s a big drawback to our advertising.
Here’s the math: anywhere around 15% of the properties people want quotes for are too big. It could be even 30% but I’ll be conservative.
The average revenue from these would be around $300 a month.
Our average customer pays $150 a month if you do the math for all properties.
This means if we signed up 100 people we would have $15,000 in revenue a month. Since we missed out on an extra 15% of people paying $300 a month assuming the same closing rate, we would’ve had 15 more customers paying $300 a month.
That’s $4,500 a month in missed revenue since we didn’t sign up those 15 people for every 100 we signed up with smaller properties. That’s 54,000 a year.
30% margins (on the low end) on the 100 customers paying an average of 150 would be 54,000 over the course of a year.
Our margins on the 15 customers would be 16,200 over the course of a year (low end)
If it’s getting expensive to advertise (it is), then we could be spending as much as $200 to acquire a customer.
For those 100 customers, that’s $20,000.
If we took on larger jobs, we would spend the same on ads.
So let’s run the scenarios.
$20,000 ad spend
100 customers (small properties only)
180,000 additional yearly revenue
$200 ad spend per customer
$150 average revenue per customer per month
Yearly revenue to ad spend: 9:1 (higher is better)
Yearly profit to ad spend: 2.7:1 (meh)
Taking on large jobs with riding mowers
115 customers
234,000 additional revenue
$174 ad spend
$170 average revenue per customer per month
Yearly revenue to ad spend: 11.7:1 (30% higher!)
Yearly profit to ad spend: 3.51:1 (30% higher)
$16,200 added profit for the same $20,000 ad spend.
Not to mention increased profitability from using riding mowers on the medium-largeish properties we currently do.
It’s estimated we can service the larger properties about 25% faster.
It’s estimated about 1/3 of properties would benefit from riding mowers.
So a 25% increase on 1/3 of properties is a 8.33% increase in capacity on average for each crew.
If everyone has a riding mower, we can take on 8.33% more properties and more revenue per crew for the whole company.
Our crews with one person working alone bring in 10,000 a month of revenue for 12 months and we profit no less than 3,000 a month net net for them (including all expenses and office and everything else. It’s at least 4-5k gross profit per truck without the office or other stuff that doesn’t scale linearly)
That means we could have 10,833 per crew, and with the same costs we are at an extra $10,000 of revenue per year and an extra $10,000 in profit per year. At net margins of $36,000 per truck per year, we would now be at $46,000 net margins per year.
That’s a 27% bump to our profit per crew with the efficiency of larger mowers just based on operational capacity.
Old margin 30% net on $120,000, new margin 35% net on $130,000.
(Gross margins would be the isolated costs of a single crew like labor and materials and gas, net margins are after office expenses and other ‘running a business’ costs. Important to understand the unit economics and the differences between the financial terms)
Something else we want to implement eventually is a single loading bay at the lot for yard debris where the guys can back the trailer up and dump everything into a massive trailer that’s dumped once a month or something.
Right now the guys have to drive to the dump and empty out waste every week or more. It takes 90 minutes or so.
That’s 90 minutes a week per crew. They work about 35 hours a week so that’s 4.3% of their time spent dumping grass.
Doing this could increase their capacity and revenue by 4%
Another $4,800 a year per crew in additional profit minimum.
Would raise net margins again by 3.5% to 38.5%.
Gross margins would be like 46% to 55%.
Eventually I want to add more complimentary services to what we offer. There’s gotta be a way to keep it organized. Like a crew that handles simple projects or sprinkler maintenance or something. I don’t like that but it would help with our advertising costs to increase revenue per ad spend.
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