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NOTABLE! Starting a lawn care service business

ZCP

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take your profit .... .set aside for taxes in a separate account. split the rest 50/50. invest half back into this business to make it more efficient. put the other half in your 'invest in other stuff' account.

don't get too far ahead of yourself with a lawn business. it has scale problems that come up. farm this for a while. get through a winter. then see where you are.
 

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Johnny boy

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Update: Got a new lead man. Sent the guys out for their first job alone. Worked out great. They did a good job and finished on time.

Legal zoom is still keeping me from getting my documents back from the state. They gave me a $500 refund for the hassle. Total bullshit but I spoke with my insurance company and they said I’m still covered. Who knows...Likely a huge liability problem but it’s temporary.

I’m scheduling jobs for Thursday (one of my days “off”). That way they can work and I can go bid jobs and check in on them.

Now that I get a little bit of time to breathe I’ll use it to tie up the details and make the process more efficient.

I’m taking tomorrow off. Heading with a girl out to do some cliff jumping and light off some fireworks.

It’s funny that people say working as a car salesman is tough. No it isn’t. It’s about 40% as hard as what I’m doing in total.

So far, what would I have done differently?

I would’ve started in March/April so that loose ends are tied up by May/June.

I would’ve done the filing with the state myself.

That’s about all I would’ve changed.

I bid jobs at $60 an hour minimum and higher if I can get away with it. It’s working out well.

As we get rolling I’ll have to focus on redundancy so that we always can get the work done without hiccups.

My goal is to fill up my employees’ schedules ASAP.

Currently reading up on taxes. Looks like my business will be taxed as a pass through and I’ll pay taxes like it’s personal income.

Do I write off all expenses (labor/gas/etc..) and only pay taxes on profits? I must have dropped out of commmnity college before I took the business tax avoidance class.

Going to speak with an accountant this Thursday evening.
 

Paleo

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You should be keeping all receipts and entering all your expenses in a bookkeeping system.

Anything connected to your business should be expensed: labor, equipment, parts, repairs, tools, fuel, office supplies, software, regulatory filing fees, legal and accounting fees, training/educational materials, travel mileage, travel expenses, customer meals, organizational dues, online subscriptions, taxes, marketing materials, postage, shipping costs, damage payouts, everything.

You should interview any accountant you are considering hiring. They vary a lot in how helpful they are. Especially since you are new in business you need an accountant who is willing to give you advice and help you shape your tax strategy. An accountant who has experience in handling contractors would be strongly preferred.



 

CareCPA

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You should be keeping all receipts and entering all your expenses in a bookkeeping system.

Anything connected to your business should be expensed: labor, equipment, parts, repairs, tools, fuel, office supplies, software, regulatory filing fees, legal and accounting fees, training/educational materials, travel mileage, travel expenses, customer meals, organizational dues, online subscriptions, taxes, marketing materials, postage, shipping costs, damage payouts, everything.

You should interview any accountant you are considering hiring. They vary a lot in how helpful they are. Especially since you are new in business you need an accountant who is willing to give you advice and help you shape your tax strategy. An accountant who has experience in handling contractors would be strongly preferred.
This is a pretty good list, so I won't clutter the thread with too much extra here.

Are you running payroll for your guys? I think you'd have trouble making the argument that they're independent contractors given your level of control.

Do you have a separate bank account for the business? You may have mentioned this earlier, but I didn't check every post. That will make things much easier at tax time.
 

minivanman

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They can't be independent contractors. He tells them when and how to do it, then furnishes the equipment for them to work with.

I used to be like that.... until I figured out I could make WAY more money by hiring independent contractors most of the time. If I can't make someone an independent contractor I try every way possible to pay them on commission. I was always a worry-wart but that has changed. I learned.... it is, what it is. That is what allows me to be invested in many small businesses. When I first started my own business I thought I had to micro-manage. Now I see that I can make way more by being a part of 40 businesses and never having a worry than being the life-line of 1 business thinking I need to know exactly when everyone's heart is beating. But, it is HARD to let go at first.
 

Paleo

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I use an independent contractor for my vacation rental cleaning business. I get the customers and tell her when and where the jobs are. She runs her own crews which she hires, fires, trains and supervises. She provides her own tools and cleaning supplies. I pay her; I have no idea how much she pays her crews. She also works for other people, which solidifies her independent status. I do an occasional inspection after the cleaning is completed but mostly not anymore since she does an excellent job.
 

minivanman

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Nothing stops them, but a lot of times, guys usually in this case, do not like dealing with a lot of customers. They just want to do the work and get paid. LOTS of guys HATE dealing with 10 or 25 or 100 or 250 customers.... they just want to mow.

But let's flip your question.... what is going to keep an employee from stealing your customers?
 

Geekour

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Nothing stops them, but a lot of times, guys usually in this case, do not like dealing with a lot of customers. They just want to do the work and get paid. LOTS of guys HATE dealing with 10 or 25 or 100 or 250 customers.... they just want to mow.

But let's flip your question.... what is going to keep an employee from stealing your customers?
That's true. Gotta love service businesses. Any ways to prevent that or do you just accept the losses.
 

minivanman

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You just accept it. In the house cleaning business I only had a few girls that stole any accounts. I always figured the time I spent on messing with them taking accounts, I could go get more..... but I never told anyone that...ssshhhhhh
 

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Paleo

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As Minivanman says, many people just do not want to have to deal with customers- they just want to work and get a paycheck. Plus, many of the people in home service jobs don't have the temperament, mentality or social skills to get and keep customers, much less do the level of organization, marketing and sales that is required to have a successful business.
It's a barrier to entry and a competitive advantage if you can do good customer relations and sales. Contractors are notorious for being terrible at this. Just yesterday i had scheduled a contractor (handyman really) to do a repair at a rental property. He was referred by someone. He did not show up at the set time. I waited 15 minutes then left to do my next task. He called my assistant half an hour later and said he was there. I told her to pass on to him that I could not come back because I was busy. He then gave her attitude like we were the ones being unreasonable. He had not called to say he couldn't make it on time and offered to reschedule. He just assumed I would be there waiting on him whenever he felt like showing up. Not! Of course I will never call him again.
Poor organizational skills, lack of self discipline, lack of initiative, personality/social skill issues and personal problems are typical things that hamper people in home service businesses. They are physical activity oriented and often are very good at physical and mechanical type work. But they need someone to provide the planning and structure and customers for them. That is the value the entrepreneur brings.
 

Johnny boy

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Update: Got my LLC papers finally. Got my EIN and bank accounts. Heading down to figure out local licenses, talking to the department of revenue and then finally labor and industries to figure out hiring my employees officially.

Already aware of the self employment tax, payroll taxes, and other various forms of theft.

Figuring out which tax and payroll software to use or really just what to do about it honestly. Meanwhile still selling cars full time down at the dealership. I'm at 2 cars for the month...pretty weak but oh well.

Using software for scheduling, organizing and invoicing customers. I accept online payments via credit card and it's integrated with the system to show revenue, expenses and profit.

I will continue bidding 1-2 jobs after work each day, and adding more to my workers' plates. They are working hard and getting the jobs done. I had a little talk with them about respecting my equipment and they listened. I stay on the phone with them before and after the jobs to track their efficiency while at work. Which jobs take too long, which are worth the money. Turns out oddball cleanup jobs are the real money. $400 for a few hours the other day. Much better than $60 to drive 20 minutes to a lawn and mow it for 45 minutes and drive 10 minutes to the next job. I pay my guys for windshield time.

I just bid a landscaping job for $1,500 + purchased expenses to rip out grass, plant some hedges, spray the lawn and weed around the property as well as laying down some beauty bark and rocks. Hopefully it is accepted. It's a 3-day job and it'll be a good payday. Currently figuring out a formula for bidding jobs that can be followed by anyone so one day I won't be the person doing it. Mowing is easy but other things can be tough to bid for someone else.

I pay my guys well ($12 and $15/hour) + free lunch + tips. I pay tips if we bring in $500 or more for revenue a day but they don't know any of that. I just say the owner wanted to give them a tip for their great work. One of these guys has a family to feed. It helps me work harder to get them jobs to do and I'm happy to pay more to help them out. We get more and more efficient and I respect the effort these guys put in. They wear company polo shirts but I ordered some that are too thick for the heat. I'll get some lighter ones. I feel pretty cool rolling up in a company polo shirt that I made myself for my own company to bid a job.

I'm going to see what we can do until October. My summer goal is 60+ regular customers that have bi-weekly/weekly services done and two crews out there working. Hopefully by Mid-August I can get that rolling.

When October comes my goal is to close up shop for the winter, park my trucks and trailers and equipment in a garage and head off to somewhere cheap like Thailand. When April comes I want to come back, sign contracts with old clients and hit the ground running with contracts for the whole spring-fall before hiring anyone back on while marketing during the spring time. I want 2019 to be the year we lease a property and bring on 4 trucks + office employee(s).

That's my goal and I know it's possible.

The long term ultimate goal is to create a cookie-cutter system of finding a location to lease in a new area with opportunity, buying x amount of equipment, hiring x number of employees with support staff and getting more trucks/equipment/employees per location as required by demand while downsizing and maintaining customers through the winter seasons.

This is a long ways out, but that is the goal.

We will see. For now, just the daily grind of 6am-9pm 7 days a week. Having tons of fun, honestly.
 

Johnny boy

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set it up to run through the winter and support your key guys so they are available again in spring!
you going to pull the rug out from under them in October?
set this up as a passive business
I’ll see what their plans are as summer ends.
 

CareCPA

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Figuring out which tax and payroll software to use or really just what to do about it honestly. Meanwhile still selling cars full time down at the dealership. I'm at 2 cars for the month...pretty weak but oh well.
Most payroll services are not economical at the level you currently are. The reason being software and setup costs are usually fixed (or at least base + incremental).

You can do it on your own without software, but you have to make sure you get deposits to the right places at the right times. As I think I mentioned up-thread, payroll-related penalties accumulate quickly.

If you have any questions, just post here and I'll answer as I can.
 

NaPal

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Have you looked into Aeration?

I've had a pretty strong connection to the industry my whole life and right now a 0.3 acre lot goes for about $250 where I'm at. Bang 8 of those out in a weekend and you're sitting on $2k minus expenses which isn't much considering one guy can do it.

I have a paid truck, aerator, mower, and weed eater. Maybe I'll turn this into a hustle :cool:
 

Johnny boy

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Have you looked into Aeration?

I've had a pretty strong connection to the industry my whole life and right now a 0.3 acre lot goes for about $250 where I'm at. Bang 8 of those out in a weekend and you're sitting on $2k minus expenses which isn't much considering one guy can do it.

I have a paid truck, aerator, mower, and weed eater. Maybe I'll turn this into a hustle :cool:
I offered to do it at the same hourly rate that we mow at and it got shot down. Not much of a sample size but I felt aeration wasn’t going to help.

“I’m moving” / “I’m selling the house” clean up jobs are where it’s at. I’ll have the guys spend a whole day at a job for $500 and there’s no driving around half the day. Boom boom boom. One customer to bid and talk to. One to get paid from.
 

CPisHere

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Speaking of aeration....
I always felt like the thing that was missing from lawn service companies was one that would guarantee a nice green lawn with minimal weeds. I would pay twice as much if the company didn't just cut the lawn but did whatever it needs to make it look nice. I don't know if it needs to be aerated, or nitrogen, etc.

Seems like it would be a compelling customer value proposition, but more difficult operationally.
 

CPisHere

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“I’m moving” / “I’m selling the house” clean up jobs are where it’s at. I’ll have the guys spend a whole day at a job for $500 and there’s no driving around half the day. Boom boom boom. One customer to bid and talk to. One to get paid from.
These jobs are more profitable but less scalable. It's a trade-off.
 

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minivanman

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I know a guy in Kansas that says he makes about $60,000 a year profit from each guy he has aerating. He doesn't offer any other service besides aerating nowadays since his grandson is older. I don't know how many guys he has doing it these days.
 

NaPal

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I know a guy in Kansas that says he makes about $60,000 a year profit from each guy he has aerating. He doesn't offer any other service besides aerating nowadays since his grandson is older. I don't know how many guys he has doing it these days.
EXACTLY! Aerating is bank. My dad works for a national company and has told me this for years. Upsell by overseeding right after with a spreader :)

Does the guy you know aerate all summer long? Or just spring/fall? It's very tough to aerate when it hasn't rained for 2 weeks. :clench:
 

minivanman

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I'm not sure what his schedule is. He doesn't offer any upsell. Does the job and on to the next. I think all of his customers are repeat these days. Back a few years ago he said he didn't have to advertise anymore. He probably told me how many people he has working and maybe when he does it but I don't remember now and neither me or my friend has talked to him in a few years.
 

Johnny boy

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Speaking of aeration....
I always felt like the thing that was missing from lawn service companies was one that would guarantee a nice green lawn with minimal weeds. I would pay twice as much if the company didn't just cut the lawn but did whatever it needs to make it look nice. I don't know if it needs to be aerated, or nitrogen, etc.

Seems like it would be a compelling customer value proposition, but more difficult operationally.
people ask for that and I’ve talked to some people that want that type of service. I’ll just go to the local golf course and chat with the groundskeeper. Or maybe a minor league baseball grounds crew. Throw it in as an add on.

It would be easier to market to people than mowing. Walk up to decent houses with dead grass and leave a nice little letter about how it’s a science and we can make it much better. Along with a recommendation of the first thing we’d do, to get their interest and reel them in, like good sales copy.

Isn’t trugreen doing the same thing though by spraying lawns?
 

CPisHere

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It would be easier to market to people than mowing. Walk up to decent houses with dead grass and leave a nice little letter about how it’s a science and we can make it much better. Along with a recommendation of the first thing we’d do, to get their interest and reel them in, like good sales copy.
Yes, seems like an easy, high $ sale to the right customers.

Isn’t trugreen doing the same thing though by spraying lawns?
I hadn't heard of them but it looks like that is what they do.
 

NaPal

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I can already see a flyer titled, "YOUR GRASS SUCKS".

Then followed up with a 'Join the Ranks of Chuck Norris and unleash our Astonishing Lawn Secrets Today!"
 

Paleo

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I've been seriously thinking about snapping up some used equipment this winter and putting a crew out there next spring just because the local companies SUCK at marketing. I've been in this house for over a year and have gotten one door hanger, one crappy flier and I think one postcard from lawn mowing companies. I could do the marketing and have a couple of guys execute. I have no desire to take it beyond one truck but it could be a nice side business given the quality of the competition.
Trugreen does market heavily but they are sprayers, not mowers.
The typical mower here looks like a bag of rags. Twice recently I have seen this scenario- a guy with a truck and trailer with no lettering, mowing grass wearing jorts and no shirt with a cig hanging out of his mouth. NOT the same guy. These are very nice neighborhoods too. If you just require that your employees be fully dressed you are way ahead of the competition.
 

Johnny boy

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These jobs are more profitable but less scalable. It's a trade-off.
I've been seriously thinking about snapping up some used equipment this winter and putting a crew out there next spring just because the local companies SUCK at marketing. I've been in this house for over a year and have gotten one door hanger, one crappy flier and I think one postcard from lawn mowing companies. I could do the marketing and have a couple of guys execute. I have no desire to take it beyond one truck but it could be a nice side business given the quality of the competition.
Trugreen does market heavily but they are sprayers, not mowers.
The typical mower here looks like a bag of rags. Twice recently I have seen this scenario- a guy with a truck and trailer with no lettering, mowing grass wearing jorts and no shirt with a cig hanging out of his mouth. NOT the same guy. These are very nice neighborhoods too. If you just require that your employees be fully dressed you are way ahead of the competition.
I have the guys wear company polo shirts and they’re both English speaking 100%.

We invoice online and are satisfaction guaranteed. Everything is professional.

I stole some practices and strategies from the car lot.
 

Johnny boy

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Update:

Workers are kicking a$$. Showing up every day. Getting jobs done quicker than expected and doing quality work.

Got my licenses yesterday.

Taking online payments.

We have our schedule filled up for the next few days. And loads of bids being scheduled.

Staying on top of scheduling and keeping track of leads. Everyone goes into the system and everything is flowing smoothly. A couple weeks ago I couldn’t handle the leads and I’d be late at responding to a third of the people. No more of that. Everything is dialed.

Once I schedule my guys out for more than 2-3 weeks straight and more to come, I’ll bring on another crew.

Profit is slightly less than expected because after spending hundreds on legal zoom wasting my time, filing again with the state for another 200, paying 300 for licenses and paying insurance in full, combined with being less than fully efficient with jobs early on has resulted in not making as much as expected. Still making money though. Doing the math it makes sense to bring on another crew soon.

Next BIG hurdle: finding a way to outsource the bidding, sales and customer service... I can’t clone myself so it’s a necessary part of scaling the business. Not enough income and time left in the season for a commercial property.

We’ll see. I’m not buying any property when the market is this high though... I’m a lawn mowing company not a real estate investing company.
 

minivanman

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You said you will have to outsource the advertising, how are you advertising right now?
 

NaPal

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Craigslist, google AdWords and yelp ads.

I don’t need to outsource that. I can do it all in a couple minutes from my computer. Craigslist is 90% of our business.
Looks like I've just found my first place to market :praise:
 

Boo

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If you really want to scale you need to productize your services. You can't be going out to bid on jobs, especially if you're primarily doing mowing for them.

You can either:

- Estimate lawn sizes and price that way (customer estimates size or you use a mapping solution to see the size online)
- You price per hour

That way you can do it all online and don't need to drive around between lawns taking measurements and wasting your time. Sure, occasionally you'll over estimate and sometimes you'll underestimate but overall it should average out the same if you set the systems up correctly. Cleaning companies do the exact same thing, typically based on the number of bedroom and bathrooms - obviously sometimes the houses are far bigger than they expect and that's that, but at least they didn't have to drive around bidding on places.

Not only does it save you a bunch of time, you'll also see your conversion rate increase because people can book online in minutes rather than waiting days for you to come bid on their home.

Check out this company: Lawn Mowing & Lawn Care Services in Washington, D.C. | Lawn Tribe

They do it based on $ per hour and then give the client an option to either check "go over the time to do the job right" or "do the best you can in the time slot".
 

Johnny boy

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If you really want to scale you need to productize your services. You can't be going out to bid on jobs, especially if you're primarily doing mowing for them.

You can either:

- Estimate lawn sizes and price that way (customer estimates size or you use a mapping solution to see the size online)
- You price per hour

That way you can do it all online and don't need to drive around between lawns taking measurements and wasting your time. Sure, occasionally you'll over estimate and sometimes you'll underestimate but overall it should average out the same if you set the systems up correctly. Cleaning companies do the exact same thing, typically based on the number of bedroom and bathrooms - obviously sometimes the houses are far bigger than they expect and that's that, but at least they didn't have to drive around bidding on places.

Not only does it save you a bunch of time, you'll also see your conversion rate increase because people can book online in minutes rather than waiting days for you to come bid on their home.

Check out this company: Lawn Mowing & Lawn Care Services in Washington, D.C. | Lawn Tribe

They do it based on $ per hour and then give the client an option to either check "go over the time to do the job right" or "do the best you can in the time slot".

If I have a commercial location with 4+ trucks I imagine it would make sense to have a manager that bids jobs and does other things. Along with an office lady to take calls and schedule bids.
 

NaPal

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Question:

How does one find out about companies that are bidding out lawn/landscape services?

I.E. > Local bank branches, chain restaurants, HOA's, shopping plazas.
 

Johnny boy

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Update:

Changed business model into a single plan that we don’t deviate from now signing people up for next year.

No more “do you do (insert custom bullshit that takes up mental energy and isn’t scalable)?”

One formula for determining price

Contract work only

Contracts are air tight and I had an attorney look it over

Higher profit margins

Each contract = average of 3600 revenue for next year = less annoying bidding jobs and avoiding variance = less headache and costly errors.

Goal before the years end: 90 contracts

Currently working on getting a commercial lease on a warehouse in a nearby town

Goal revenue for next year: $327,000 determined by contracts signed in the next few months.

Moving fast.
 

minivanman

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Good job on no custom work. In the house cleaning business we never did custom work and it made it really simple and 1 reason things usually went so smooth. Me and the office worker knew exactly what was being done, the QC person knew exactly what to check and the worker never had to guess at what needed done. We did the same thing at every house. Now we did have 2 plans.... GOLD & SILVER. Something to think about for yourself is the same. With the GOLD, offer something simple and make more profit on the job.
 

Johnny boy

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Good job on no custom work. In the house cleaning business we never did custom work and it made it really simple and 1 reason things usually went so smooth. Me and the office worker knew exactly what was being done, the QC person knew exactly what to check and the worker never had to guess at what needed done. We did the same thing at every house. Now we did have 2 plans.... GOLD & SILVER. Something to think about for yourself is the same. With the GOLD, offer something simple and make more profit on the job.
We offer a watering plan for an extra $30-$60/month for customers that don't have a sprinkler system that have smaller lawns. We bring in our own hoses, sprinklers and timers and set up the system to run automatically for them so they don't have to touch a thing and get a watered lawn all summer without paying for a sprinkler system. It's like leasing. The customer is responsible for damaged or lost equipment.

edit: everything is paid monthly for the whole year so nobody gets only a few months of our services. It's a full year paid at the beginning of each month starting in January. So even though it only needs water for a few months, it's being paid for the whole year. $350 a month for lawn care sounds better than paying $110 each time we come and most visits will be well under an hour.
 

Ken Elshoff

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I’ve heard of a program (not sure if it’s state or federal) where the government will reimburse employers for one full years worth of salary if they hire felons. Lots of folks getting released are decent people and need jobs.

So, basically you get a free employee for one year.

Of course, there is one a**hole locally who hires felons for one year, gets reimbursed, then fires them so he can hire more —it’s a perpetual revolving door of free one-year employees. His whole company was built by ‘free’ employees. Don’t be that guy.

If I hear of the program name I’ll come back and post it but I’m sure you could find it though google if you are interested.

Just a thought.
 

Johnny boy

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I’ve heard of a program (not sure if it’s state or federal) where the government will reimburse employers for one full years worth of salary if they hire felons. Lots of folks getting released are decent people and need jobs.

So, basically you get a free employee for one year.

Of course, there is one a**hole locally who hires felons for one year, gets reimbursed, then fires them so he can hire more —it’s a perpetual revolving door of free one-year employees. His whole company was built by ‘free’ employees. Don’t be that guy.

If I hear of the program name I’ll come back and post it but I’m sure you could find it though google if you are interested.

Just a thought.
Wow...you think a lawn care employee could stay for a whole year? That would be crazy.
 

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