Software in my industry doing $1M+/mo.

[Freedom61]

http://www.golmn.com/

Pretty impressive to say the least. This company was started by the owner of a larger landscape company (revenue around $17M) in Canada that boasts a pretty staggering profit compared to the majority of the industry because they generate about $270k per employee (industry avg is about $100k).

For those who don't know my intro, I own a lawn/landscape/snow company (slow lane in my eyes, I focus most of my efforts on my fast lane biz and am transitioning out of the green industry - selling it in the spring) and I attended one of their seminars that came to a local Caterpillar dealer last February to learn about the software and test it out (they showed the gross numbers of the landscape company during the seminar). It helped me out a TON with how an outdoor contracting business truly comes up with their prices for services. I started using it this spring and it worked fantastic for generating proposals to send to prospects since it based all our prices off our yearly budget.

Anyway, shortly after attending that seminar I came across MJ's book and my mindset had totally changed on how I looked at business (chase needs NOT money!) and saw what they were doing and rather than being the one digging for gold (almost literally with landscaping) I'd prefer to be the one creating or selling shovels. Needless to say this software fulfilled the market because there was nothing geared towards budgeting/estimating especially on the landscape construction sector of the industry, there's a bunch of software available for lawn service work. Their customer service SUCKED when I decided to cancel this fall (potential opportunity? ).

The other day I checked out their website and saw that have 10,095 users (I'm not sure if that's accurate), but their service was $99/mo and is increasing to $199/mo + all the small add-ons they have available. $199/mo x 10k users = $1,990,000 per month! Very impressive! Not sure what the gross margin or net profit is on the software - I'm sure it's not exactly cheap to send their man sales guy around the country promoting the product and catering lunch for 2 days with 50+ people, etc., but nonetheless it's awesome.

I should note, this didn't happen "overnight", their first YouTube videos are from back in 2010.

...Now back to work so I can make it happen for myself.

 

Dislike ads? Remove them and support the forum: Subscribe to Fastlane Insiders.

[Learner Guy]

Freedom61, I just logged in to see who'd talked about landscaping companies - can't believe you posted this yesterday!

I'm not in the United States, and I'm looking for a business to buy in my town (70k population, 150k in the region).

I met with a guy recently to see his business, which does about 2m in sales with 10 guys and has a modest EBIT of about 170k after paying himself a market salary. He's selling for 500k including about 250k of assets, which in our market seems a pretty reasonable valuation. I'd aim to run it under management as I can't be working in it day to day.

I would love to hear more about your landscaping thoughts and any comments about the business I've described!

LG

Sent from my Nexus 6 using Tapatalk

 

[Nick314]

Freedom61, I just logged in to see who'd talked about landscaping companies - can't believe you posted this yesterday!

I'm not in the United States, and I'm looking for a business to buy in my town (70k population, 150k in the region).

I met with a guy recently to see his business, which does about 2m in sales with 10 guys and has a modest EBIT of about 170k after paying himself a market salary. He's selling for 500k including about 250k of assets, which in our market seems a pretty reasonable valuation. I'd aim to run it under management as I can't be working in it day to day.

I would love to hear more about your landscaping thoughts and any comments about the business I've described!

LG

Sent from my Nexus 6 using Tapatalk

I'm not sure how others will analyze this. But here's my take.

1 - purchasing a business is decidedly an *event*--which violates CENTS. This event is for him the culmination of him doing the work to create wealth in the form of a successful business--he has executed a process getting him to this point. For you, however, there is no process involved in executing a purchase.
2 - however, if you see opportunity to grow this business into a brand and scale it (e.g. via the process of I.I.), the purchase price and existing clientele are the entry barrier, and whatever you do after that creates additional value and it may be a great opportunity.
3 - coming full circle, if #2 is not true--then you are merely buying a revenue stream which will *not* grow in any exciting, large way. True, it may be fairly stable if managed well, and may provide decent hands-off revenue if you can find a good manager, and may grow some with work (you are in a fixed-size market), but that's all it is. It won't magically turn into a multimillion dollar/year business by itself (multimillions/year in net income to *you*).

The guy selling it is the one that appears fastlane. Why he's selling is a good question. Maybe he's failing fast because he realized the local market doesn't bear any more growth? Maybe it's too demanding being an HR-model business--and he wants to free his time more with a stronger model. While a $500k exit doesn't seem all that big, it's plenty to fuel whatever his next venture may be--and with lessons learned who knows--maybe he's got a much bigger idea already in the works.

 

[Learner Guy]

Thanks, appreciate the input. The business is a good fit for me in many ways.

Freedom61, would appreciate any comments about your experiences in the landscaping business...
LG

 

Dislike ads? Remove them and support the forum: Subscribe to Fastlane Insiders.

[Oztrepreneur]

3 - coming full circle, if #2 is not true--then you are merely buying a revenue stream

What if this revenue stream is largely hands off and can be used to build capital to fund other perhaps bigger ventures?

 

[Learner Guy]

That's the basic idea, as well as wanting to be able to employ people locally.

 

[Freedom61]

I'm not sure how others will analyze this. But here's my take.

1 - purchasing a business is decidedly an *event*--which violates CENTS. This event is for him the culmination of him doing the work to create wealth in the form of a successful business--he has executed a process getting him to this point. For you, however, there is no process involved in executing a purchase.
2 - however, if you see opportunity to grow this business into a brand and scale it (e.g. via the process of I.I.), the purchase price and existing clientele are the entry barrier, and whatever you do after that creates additional value and it may be a great opportunity.
3 - coming full circle, if #2 is not true--then you are merely buying a revenue stream which will *not* grow in any exciting, large way. True, it may be fairly stable if managed well, and may provide decent hands-off revenue if you can find a good manager, and may grow some with work (you are in a fixed-size market), but that's all it is. It won't magically turn into a multimillion dollar/year business by itself (multimillions/year in net income to *you*).

This is dead on and is the exact reason I'm in the process of selling my L/L/S biz - "Me Too Business", "Chasing Money". I "had a passion" for the industry - meaning I enjoy cutting grass with zero turn mowers and seeing a patio, fire pit, & sitting wall come to life from nothing, but passion means nothing if the market doesn't need it. I've found my needs for the market and now I just need to get the first biz sold, I have the right offer on the table, just need to make sure the buyer can do his part.

IMO these types of businesses are best started when you can do exact what you stated in # 2 - I wish I would have read MJ's book when it came out in 2011 & I was starting my slow lane biz, oh well, you live & learn.

I've grown to not like it so much (what do you know, MJ's teachings are right, you burn out on your passion when you turn it into a business unless you come up with a need for that same industry) but I can cut my own 1 acre lawn on a 100 acre property with a large house & enjoy it to my heart's content after some true fastlane success, knowing I don't need to worry about issues with customers or employees, truck or equipment breakdowns, etc. There's a company in the Lawn & Landscape Mag's top 100 list of highest revenue generating companies that was started when he purchased a company doing around $250-500k in sales in SW FL (big market) after making millions in the finance industry (can't remember exactly what it was he did but that's not important), they re-branded it with a heavy emphasis on landscape designing and creating elegant commercial outdoor spaces in the $500k - $1M+ range per job. That's a unique approach and the business has been scaled to around the $15-20M mark, it's taken probably close to 8-10 years so it's not exactly true fastlane but he already had millions before buying this biz so in my eyes it's apart of his money system, especially because he operates it nearly hands off. I believe he comes in one day per week.

The guy selling it is the one that appears fastlane. Why he's selling is a good question. Maybe he's failing fast because he realized the local market doesn't bear any more growth? Maybe it's too demanding being an HR-model business--and he wants to free his time more with a stronger model. While a $500k exit doesn't seem all that big, it's plenty to fuel whatever his next venture may be--and with lessons learned who knows--maybe he's got a much bigger idea already in the works.

I'm doing the exact thing, freeing my time from the HR model to focus on a much strong business that can affect the lives of thousands, if not millions. I can't remember all the business model names from TMF but an internet company creating & selling various types of digital products and then building the apps I have ideas for is my plan. I won't be getting anywhere near $500k for the sale of my landscape biz but will be using it as fuel for my fastlane venture and getting rid of some pesky debt in the mean time. Once the sale is complete & I deposit the check, I'm moving out from my parent's house (I'm 24 yo for those that don't know) into my younger brother & his gf's 2 bedroom apt in Fargo, ND. He shares the curiosity I have for "There's gotta be more to life than just a job, save, invest in the stock market, etc.", I'll likely give him my copy of TMF when I arrive so he can read it in it's entirety. But I'm moving to put myself into a situation where I have no choice but to succeed. If I have to "commit entrepreneurial suicide" and get a part time job to at least get by, so be it - it makes my adventure & journey that much more interesting. But nothing will deter me from my fastlane pursuits.

One big thing I've learned after the 5 years in my landscape business, reading TMF almost a year ago, and then adopting the fastlane ideology in my life 100%, is that a typical upfront capital intensive service businesses that that still rely on the owner's presence day-to-day are really not worth very much when it comes time to sell, at least not compared to an online fastlane venture. The same could be said with a fastlane venture also, you need automation in every business! Whether it's online ad campaigns that get customers to join your membership site or an operations manager that knows what the heck they're doing and can make sure all "front line" employees do their jobs.

What if this revenue stream is largely hands off and can be used to build capital to fund other perhaps bigger ventures?

Bingo - it can be apart of your money system after you have a fastlane liquidation event or have a large sum of cash that's amassed from a fastlane venture.

I had to grab my copy of TMF for this, from chapter 44, "What's usually the first thing an entrepreneur does after they sell their company for $50M? They go out and invest in multiple companies, get involved in philanthropy, and spread out their passions. Why is polygamy now possible? Money. Money buys systems, like human resource systems, and money systems that buy time." That's exactly it.

Freedom61, I just logged in to see who'd talked about landscaping companies - can't believe you posted this yesterday!

I'm not in the United States, and I'm looking for a business to buy in my town (70k population, 150k in the region).

I met with a guy recently to see his business, which does about 2m in sales with 10 guys and has a modest EBIT of about 170k after paying himself a market salary. He's selling for 500k including about 250k of assets, which in our market seems a pretty reasonable valuation. I'd aim to run it under management as I can't be working in it day to day.

I would love to hear more about your landscaping thoughts and any comments about the business I've described!

LG

Sent from my Nexus 6 using Tapatalk

Those numbers are pretty good compared the industry standards. Your town's population may limit your success with growing that business though. If you find something unique to offer the market with that business, go for it. I'm not sure what your aspirations are, but if it's to create something that can make you millions (not just the business grosses M's) each year as I would suspect since you're on this form, I personally wouldn't purchase the business unless you're using it as part of your money system and you've already had a fastlane liquidation event or have a stack of money from your fastlane business. To build wealth, I'd much rather fulfill a need & scale it among everything else within the 5 commandments of a fastlane business.

 

Dislike ads? Remove them and support the forum: Subscribe to Fastlane Insiders.

[Learner Guy]

There's a company in the Lawn & Landscape Mag's top 100 list of highest revenue generating companies that was started when he purchased a company doing around $250-500k in sales in SW FL (big market) after making millions in the finance industry (can't remember exactly what it was he did but that's not important), they re-branded it with a heavy emphasis on landscape designing and creating elegant commercial outdoor spaces in the $500k - $1M+ range per job. That's a unique approach and the business has been scaled to around the $15-20M mark, it's taken probably close to 8-10 years so it's not exactly true fastlane but he already had millions before buying this biz so in my eyes it's apart of his money system, especially because he operates it nearly hands off. I believe he comes in one day per week.

Thanks Freedom61 - not exactly my situation, but some broad similarities. This is not my shot at making money, it's a home for some I've already made, and I like that it's got people and machinery (although it is more capital intensive than I'd like). I'm happy to put in a day a week, two days initially. The chief risk I see at the moment is that the existing owner is pretty impressive and his 2IC is not so natural a salesman, so it could easily be that 2m turnover becomes 1.2m, which means a lot of staff to let go promptly.

There's a 1m+ city two hours away, and I'd consider establishing a crew there, or at least a relationship with an existing firm.

Most of the revenue is from one-time projects, so I'd aim to build the recurring revenue with maintenance contracts.

What have you found to be the best ways to find profitable customers?

Thanks again for the really helpful post.
LG

 

[Nick314]

Just my $0.02, but I'd say there's got to be far less risky, far more passive ways to park your money and earn a return. You may think you are buying an asset, but might find out one day you purchased a liability.

 

[Learner Guy]

Just my $0.02, but I'd say there's got to be far less risky, far more passive ways to park your money and earn a return. You may think you are buying an asset, but might find out one day you purchased a liability.

Yep, but at what rate of return? A few percent in a bank or similar is not enough to really move things along, and I've got my long-term picture fairly sorted. If I can get 20% on an investment of this size, I'll be pretty happy and the non-financial benefits are significant to me (can get some of the guys working on my own properties if they're quiet, can offer employment to likely youngsters etc).

You're right, of course, there's a risk of loss and that's the biggest thing giving me pause...

 

Dislike ads? Remove them and support the forum: Subscribe to Fastlane Insiders.

[Freedom61]

Just my $0.02, but I'd say there's got to be far less risky, far more passive ways to park your money and earn a return. You may think you are buying an asset, but might find out one day you purchased a liability.

My thoughts exactly.

Thanks Freedom61 - not exactly my situation, but some broad similarities. This is not my shot at making money, it's a home for some I've already made, and I like that it's got people and machinery (although it is more capital intensive than I'd like). I'm happy to put in a day a week, two days initially. The chief risk I see at the moment is that the existing owner is pretty impressive and his 2IC is not so natural a salesman, so it could easily be that 2m turnover becomes 1.2m, which means a lot of staff to let go promptly.

There's a 1m+ city two hours away, and I'd consider establishing a crew there, or at least a relationship with an existing firm.

Most of the revenue is from one-time projects, so I'd aim to build the recurring revenue with maintenance contracts.

What have you found to be the best ways to find profitable customers?

Thanks again for the really helpful post.
LG

That depends on what type of customers & projects/services you're doing. For a residential install contract, it's going to be much different than a commercial maintenance contract.

Knowing what I know now, the only interest I have in regards to investing in a landscape contracting company would be investing in a larger firm that does $15M+ in sales each year. They usually have their systems in place and can put your money to use and you should earn a good return. Otherwise I'd prefer to invest in a product based industry rather than a service. And I'd also prefer to be in a true fastlane industry - investing in an app, software, capital towards a service business that's basically a product (restaurant that is becoming a chain, etc.) pretty much like what Marcus Lemonis does on the profit with some of the companies he turns into national brands.

 

[Freedom61]

One more thing with contracting type companies - my issue with them is that there are so many variables that can occur during any given day when preforming the services on customers properties that they're very risky: things like weather, workers not showing up, people getting hurt when working, equipment malfunctions, DOT pulling over your trucks/trailers (big cost right there!), customers wanting to change what is being done on a landscape project, customers slow paying/not paying their final bill when the project is complete, the list goes on. Material delivery logistics, materials being damaged during transport en route to the jobsite whether you're hauling or your supplier, there's more but I can't think of anything at the moment. I have a fastlane plan for one of these issues I listed above and it should help any and all contractors save thousands of dollars.

 

[Learner Guy]

You've created a machine to influence the weather!

There are people making money in landscaping, of course, like almost any field. I take your points about the non-Fastlane aspect, thanks. I may live to regret it, but I'm progressing things and will see if I can make a deal for it.

Thanks again for the input - any and all other suggestions gladly received!

Actually, do you have any books or other resources you'd recommend?
LG

 

Dislike ads? Remove them and support the forum: Subscribe to Fastlane Insiders.

[Freedom61]

You've created a machine to influence the weather!

There are people making money in landscaping, of course, like almost any field. I take your points about the non-Fastlane aspect, thanks. I may live to regret it, but I'm progressing things and will see if I can make a deal for it.

Thanks again for the input - any and all other suggestions gladly received!

Actually, do you have any books or other resources you'd recommend?
LG

Are you well versed on how to do lawn/landscape services? If not, you could actually check out my eBooks on starting a lawn service & landscape biz. I go pretty far into detail with how to do all the services.

Another book I'd recommend would be "E-Myth: Landscape Contractor - Why most landscape companies don't work and what you can do about it".

I wish I created a machine that influences the weather! I shoot far for my goals but that's just a little bit out of reach at the moment. It has to do with the transportation side of things.

 

[Learner Guy]

Thanks, sounds great - where do I find the ebooks to buy?