Starting (and Fastlaning) a lawn care service business

[Johnny boy]

Any business under $5M in annual revenues that's profitable should focus solely on increasing revenue, not increasing margins. The math is simple. The story left off with $300K in sales and 50% net operating profits. Doubling sales to $600K means $300K in net profits. $1M means $500K in net profits. It doesn't matter whether those numbers are 10-15% lower due to crappy workflows since you're still *WAY* ahead of implementing tweaks on the $300K business.

100%. Thank you.

And people ask "can you sustain that margin as you scale?"

yes...I just don't give a shit about squeezing the juice out of a tiny lemon yet, we can worry about that when we are doing 20 mil or something. That's when we can worry about getting employees to do a couple extra jobs, and negotiating the price of our dry erase pens. I have a strict policy of not tripping over dollars to pickup pennies. We have limited mental bandwidth, so our focus needs to be on important things.

I'd say we are operating with only mediocre to moderate efficiency. We could raise prices, our guys could do probably 20% more jobs, etc. But right now all we are doing is taking something that works and running more customers through it, and fixing what breaks.

Last time I checked our revenue this month, I was bummed out because I didn't see a ton of money coming in, I checked our software and we still have 25 people to put into the billing system! "Oh, that extra 4k/mo really helps". We are slightly outpacing our goal. If things keep going that way we will be forced to buy a 5th truck this year. Keep in mind we started this year with only 2. Very exciting. Should put us in a great spot to take the next step for next year.

 

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[ZCP]

4 people on here want franchises. let's go @Johnny boy
and yes, write the book and setup the course as a lead in to buy the franchise.

value for you and what you have created
value for them in they buy a money printing machine

 

[ZCP]

to help get this started:

if you are interested in a franchise, dm @Johnny boy with the following:

name:
specific location:
outcome desired:
what you bring to the table:
how it could be a success:
how it could fail miserably:
what impact you will make once your outcome is achieved:

 

[Johnny boy]

Now that all of our customers are into our mapping software, I can be so much less dumb.

We took a target revenue goal and split up our day assuming a 6 hour workday to give ourselves some room.
360 minutes a day to make 13k per crew.

Watch it in action...

We get a new customer that can go on either monday, tuesday, or wednesday, all the nearby properties are sorta close so it doesn't matter.

But I take the list of customers and sort them by days and download monday, tuesday and wednesday separately.... (this is just for week 1, week 2 is another set of customers)

I click on the "time goal" column and it adds them up.

I can add the customer to the easiest day and make sure the schedule stays equal.

Monday week 1: 1003 minutes (sum is in bottom right corner)



Tuesday week 1: 741 minutes



Wednesday week 1: 972 minutes



Best choice is to put the new customer on tuesday. I had no idea how hard any of these days were, I just had data to help me.

Look at what I found... some next level stupidity on the schedule. I can't believe we were doing this....



This is showing friday's jobs for week 2. Look at those southern 2 properties. Way out of the way. They should be mixed in to a different day, but I had forgotten all about them since we had so many other customers. Now I can adjust things to make sure each crew has properties that are nearby, not too difficult, and everything is more efficient. 80/20 efficient, not perfect, but making huge improvements.

Now that we can group properties easily, we can assign them to crews permanently. Each crew will have a somewhat equal number for the time goals all added up so its fair. Also, we can set those jobs as recurring jobs in our dispatching software so I spend 90% less time doing any scheduling since it's already going to be on there. ALSO, our customer service rep doesn't have to make a note of visit requests to be added later, she can immediately go into the visit notes for the next visit and do it right there. With permanent crews, the guys will get familiar with their customers and will know the properties intimately. "Oh, that's debra, she's sweet and her dog's name is Charles. She doesn't like her grass cut super low so we mow it a notch higher than normal". It'll give customers a personal touch if the same crew does the place each time. Consistency can become a control variable too, so we can see which crews are more profitable, and if a new employee starts on a crew that was previously doing a great job and we see more complaints, we know that it's the employee, not the customers. "Crew 1 customers had a 3% complaint rate so this new crew leader getting a 7% complaint rate with the same customers means something is up". A lot of my job managing my guys is figuring out who's full of shit, the employee or the customer. This'll make it easier to manage that side of things.

 

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[ZCP]

AFT! Route balancing is key. Now go next level and map the growth up to saturation. How many crews, how would they balance. This will tell you the franchise max value for an area.

 

[Johnny boy]

AFT! Route balancing is key. Now go next level and map the growth up to saturation. How many crews, how would they balance. This will tell you the franchise max value for an area.

the only correct answer is "however many people are willing to signup within a given service area"

Defining a service area:

pricing is based on total visit time (drive + work time)

13k/mo revenue goal per crew, assuming a 6 hour work day, means there's 360 minutes a day of work and driving, and if customers are every other week, that's 10 work days until the schedule repeats. So one crew can take on 3600 minutes worth of customers. 3600 minutes to have $13,000 worth of customers signed up means for every minute, we charge $3.61 of "per month" price on the schedule. It gets confusing but the simple way to look at it is "this place takes 5 minutes to drive to an 20 minutes to do, so 25... the price would be 25 times 3.61 so $90 a month for biweekly services would be fair". Easy rule of thumb.

If your property adds 30 minutes to our drive, and your place takes 20 minutes, 50 minutes means $180 plus tax for 12 months ($108 a visit with 20 visits a year), just to mow a 20 minute yard...the customers will price themselves out once we get about 30 minutes away from our headquarters.

So service area is right around 30 minutes. The rate of signups plummets and the value being added is less and less worth it, so a service area should be like 30 minutes of drive time or less, I would shoot for 25 actually. If there's any issues like a customers property filling up the truck bed and they need to dump grass, it becomes a shit show with driving all the way back to dump grass and then back out to other properties, which isn't that predictable or easy to take into account on any given day.

So....however many people you can get to signup within a 25-30 minute max area is the individual location potential. Other factors include how many of those homes are ideal customers.

If a location can get 1000 customers, that's only about 12 crews, and would bring in 1.8 million a year revenue at full capacity. I would expect that place, with only 1000 customers, to make about 7-800k minimum in profit each year.





Hard to tell how many people will signup based on just population. It depends on how many properties are a good fit (you want new construction homes in developments with tiny yards).

 

[Two Dog]

Now that all of our customers are into our mapping software, I can be so much less dumb.

We took a target revenue goal and split up our day assuming a 6 hour workday to give ourselves some room.
360 minutes a day to make 13k per crew.

Watch it in action...

We get a new customer that can go on either monday, tuesday, or wednesday, all the nearby properties are sorta close so it doesn't matter.

But I take the list of customers and sort them by days and download monday, tuesday and wednesday separately.... (this is just for week 1, week 2 is another set of customers)

I click on the "time goal" column and it adds them up.

I can add the customer to the easiest day and make sure the schedule stays equal.

Monday week 1: 1003 minutes (sum is in bottom right corner)

View attachment 42945

Tuesday week 1: 741 minutes

View attachment 42946

Wednesday week 1: 972 minutes

View attachment 42947

Best choice is to put the new customer on tuesday. I had no idea how hard any of these days were, I just had data to help me.

Look at what I found... some next level stupidity on the schedule. I can't believe we were doing this....

View attachment 42948

This is showing friday's jobs for week 2. Look at those southern 2 properties. Way out of the way. They should be mixed in to a different day, but I had forgotten all about them since we had so many other customers. Now I can adjust things to make sure each crew has properties that are nearby, not too difficult, and everything is more efficient. 80/20 efficient, not perfect, but making huge improvements.

Now that we can group properties easily, we can assign them to crews permanently. Each crew will have a somewhat equal number for the time goals all added up so its fair. Also, we can set those jobs as recurring jobs in our dispatching software so I spend 90% less time doing any scheduling since it's already going to be on there. ALSO, our customer service rep doesn't have to make a note of visit requests to be added later, she can immediately go into the visit notes for the next visit and do it right there. With permanent crews, the guys will get familiar with their customers and will know the properties intimately. "Oh, that's debra, she's sweet and her dog's name is Charles. She doesn't like her grass cut super low so we mow it a notch higher than normal". It'll give customers a personal touch if the same crew does the place each time. Consistency can become a control variable too, so we can see which crews are more profitable, and if a new employee starts on a crew that was previously doing a great job and we see more complaints, we know that it's the employee, not the customers. "Crew 1 customers had a 3% complaint rate so this new crew leader getting a 7% complaint rate with the same customers means something is up". A lot of my job managing my guys is figuring out who's full of shit, the employee or the customer. This'll make it easier to manage that side of things.

Ha, you're starting to get big enough to use route planning software. Our primary customers are delivery / service companies that are growing quickly and transitioning the route planning process from online maps and spreadsheets to an automated system. It usually happens around 5-10 vehicles. You're pretty savvy about figuring all this stuff out.

Here's a couple screenshots that will look really familiar. Maybe next year. ;-)

 

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[Two Dog]

It gets confusing but the simple way to look at it is "this place takes 5 minutes to drive to an 20 minutes to do, so 25... the price would be 25 times 3.61 so $90 a month for biweekly services would be fair". Easy rule of thumb.

The problem with this approach is it relies on adding new business near the existing territory. It heavily penalizes new accounts outside of the existing service zone. A better methodology (although probably a bitch to accomplish using spreadsheets) is averaging out the total drive time across all the orders scheduled for one crew on each route. That would incorporate both the stem time to reach the service territory along with the time needed to drive between each scheduled stop. It's the most accurate way of pro-rating "down" time (i.e. non-billable) across revenue generating accounts for the day.

Driving the vehicle is easier than actually doing the work, so two hours driving isn't equivalent to two hours of cutting lawns. Unfortunately, the hourly cost for the crew doesn't go down. The process for establishing new territories becomes (a) drive 30 - 60 minutes for the 1st new account and (b) upsell additional accounts in the new territory. You'll eat two hours of drive time while the new customers are being onboarded, but it will average out quickly enough.

Most companies eventually switch to commission or base + commission for exactly that reason. That allows you to mix & match the routes across the ten day cycle to balance hours and driver wages without limiting growth. Often, they'll task a senior crew member to door knock with introductions or hang door flyers promoting the service while the jobs are being completed. Regional direct mail postcards are also dirt cheap. It's probably my favorite approach for growing this type of business.

 

[Johnny boy]

The problem with this approach is it relies on adding new business near the existing territory. It heavily penalizes new accounts outside of the existing service zone. A better methodology (although probably a bitch to accomplish using spreadsheets) is averaging out the total drive time across all the orders scheduled for one crew on each route. That would incorporate both the stem time to reach the service territory along with the time needed to drive between each scheduled stop. It's the most accurate way of pro-rating "down" time (i.e. non-billable) across revenue generating accounts for the day.

Driving the vehicle is easier than actually doing the work, so two hours driving isn't equivalent to two hours of cutting lawns. Unfortunately, the hourly cost for the crew doesn't go down. The process for establishing new territories becomes (a) drive 30 - 60 minutes for the 1st new account and (b) upsell additional accounts in the new territory. You'll eat two hours of drive time while the new customers are being onboarded, but it will average out quickly enough.

Most companies eventually switch to commission or base + commission for exactly that reason. That allows you to mix & match the routes across the ten day cycle to balance hours and driver wages without limiting growth. Often, they'll task a senior crew member to door knock with introductions or hang door flyers promoting the service while the jobs are being completed. Regional direct mail postcards are also dirt cheap. It's probably my favorite approach for growing this type of business.

It penalizes people who are unprofitable....sounds perfect.

Two hours of driving and two hours of mowing is closely equivalent in cost, so we price it the same.

We are NEVER doing commission for our workers. Then it becomes a GIANT shit show and gives them 18 different things to bitch at you for. It makes something simple and turns it into something ridiculously complicated with NO real benefit.

"We only get $15 for susans place but $19 for debras place but debra takes twice as long, so we should get $30 for debras place. blah blah blah" STFU just do your F*cking job. Susan's takes half the time? So we should lower it to $9.50 then?? If I hired you to be a manager I would've, just cut the grass.

in reality: "Thank you for your suggestion, bob. We will review it carefully"

Your employees will use every bullshit reason to argue for more even if there's no reason for it, so do not make that an opportunity.

You get a salary, you do the jobs, it's not up to you, customers that complain you have to come back and fix mistakes, when you're done you go home early and get rewarded for efficiency that way.

The drive time issue being priced too high at first gets fixed after about 10-20 customers so literally within a couple weeks of opening a new location, and it's actually a good idea because you don't know how much density in a given area you'll get anyways, so it works just fine actually.

We are doing a 3000 door mailing campaign in our ideal neighborhood with a kickass offer in like a week or so. Should be great and get us a ton of profitable customers. $99 a month special. Tiny yards, they are the highest converting signups we do and make us a ton of money with few complaints.

 

[Johnny boy]

Ha, you're starting to get big enough to use route planning software. Our primary customers are delivery / service companies that are growing quickly and transitioning the route planning process from online maps and spreadsheets to an automated system. It usually happens around 5-10 vehicles. You're pretty savvy about figuring all this stuff out.

Here's a couple screenshots that will look really familiar. Maybe next year. ;-)

nice, and thank you

 

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[Johnny boy]

if it costs you money, charge for it, whether they know it or not. Pretty simple. Drive time is an example.

When you charge, do it in the way that feels the cheapest but gets you the most money. Monthly payments on autopay is the easiest way to do it, along with not showing any line items. "we are charging you $180 per hour including drive time" sounds f*cked up, but "you get w,x,y and z services for only $127 a month for 12 months, billing is automatic with a card on file" sounds way way better. Handing over a 3 page contract scares everyone but when you have a box that says "I've read terms and conditions" it tends to work about 100x as much and you just tell them the terms in person or over the phone in bullet points.

when paying people, don't complicate it or you'll create more variables for people to negotiate and try to F*ck you over with.

never charge hourly, customers will own your time then. "Your employees took a break at my property, deduct 50% of the billed charges for that visit" stfu karen. It's $x per month regardless, just keep it simple.

If you are having issues with customers and employees pulling shit on you, it's your fault because you were in charge of setting the terms and you made huge mistakes.

 

[WillHurtDontCare]

I do not want to be 40 thinking back to if I could've saved 10+ years of my life by simply having some f*cking balls and doing what I needed to do the entire time.

this is a very good thread

 

[WillHurtDontCare]

Yes electric is the future. But the future is lame and stupid and wrong.

 

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[Johnny boy]

The people doing all of this to us have names and addresses

 

[WillHurtDontCare]

The people doing all of this to us have names and addresses

 

[Two Dog]

How would you able to come up how much the business itself was worth?

Small service business usually sell at a 3x owner annual takeout multiple.

Meaning that you pay yourself $100K (including benefits and everything else), the business would be valued at $300K.

That's seems pretty high for lawn care, so I'm also curious how they established the price. Then add equipment.

 

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[Johnny boy]

Over the past 18 days we have signed up approximately $8,400 a MONTH in additional contracts.

extra 100k revenue worth of contracts for this year, signed up in the last 18 days.

I am not sure where we exactly are with our monthly revenue since there's like 15 people we still need to put into the recurring billing system and will do so on Wednesday evening most likely. But things are looking really good.

It's not without problems, I should be showing up to the jobs earlier in the morning before I give quotes and using that time to train employees. I've been spending too much time in the mornings just 'thinking'. I am usually guilty of that. So I'll be making more of an effort to go train guys in the morning. It's a tough time of year with signing people up, and hiring so many brand new guys, all at once, when it's raining and all the jobs are first time visits for so many people...all the problems happen this time of year.

As with any and all problems, I just tell myself things like

"The billionaires and giant corporations already essentially solved this problem"

"I've seen how poorly things are run at giant successful companies so the bar is low, we can do it"

"Look at how well things have gone with you acting like a complete F*cking retard, all you need to do is be slightly less retarded"

It is important to not look at problems and call it failure and then quit just because of your unrealistic standards. Sometimes it takes a bit of a tough stomach to be OKAY with issues that will always pop up, it just needs to be at a low enough frequency to keep things running sorta smooth. The thoughts pop up like "but HOW am I gonna make sure everyone is doing a GREAT job?!" Bro, billions of people go to Mcdonalds even though 20% of the time they don't even get your order right. There WILL be employees that we hire that absolutely suck, do a terrible job and then lie about it, and makes customers cancel. It's about managing problems, not eliminating them. And as I get older and more responsible, I feel that conservative voice creeping in. I need to remember to balance the two voices. With one telling me to always be thorough and do a great job and expect high quality, and the other telling me to focus purely on speed. Both have a lot of value and the failed entrepreneurs are usually too much of one without the other.

Just hired our 7th employee.

chase, andrew, garrett, griffin, jacob, dawson, and joe.

If I think about someone I signed up 1-2 days ago I literally don't remember them at all. Things are moving quite fast. It's a little nerve racking to put your faith in systems but it's the only way to do it.

 

[WillHurtDontCare]

Over the past 18 days we have signed up approximately $8,400 a MONTH in additional contracts.

extra 100k revenue worth of contracts for this year, signed up in the last 18 days.

Congrats dude. Great stuff.

"Look at how well things have gone with you acting like a complete F*cking retard, all you need to do is be slightly less retarded"

lmao

 

[Angler]

"The billionaires and giant corporations already essentially solved this problem"

"I've seen how poorly things are run at giant successful companies so the bar is low, we can do it"

"Look at how well things have gone with you acting like a complete F*cking retard, all you need to do is be slightly less retarded"

bullet proof mental. I'm rooting for you.

 

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[Redwolf]

A lot of my job managing my guys is figuring out who's full of shit, the employee or the customer.

A truer statement has never been uttered.

 

[Johnny boy]

30 days in of zero carbs, 1500 calories a day, nothing but giving quotes and other admin business stuff.

Going hard on ACTUALLY automating our sales/customer service/crm system/dispatching. Going from "works for now" to "perfectly ready to scale nationally".

Will show the guts of it and how it works soon.

I think we could start franchising as soon as next year.

Imagine bringing on a new franchisee and their ONLY job is "train and manage employees, make sure equipment works and the guys have weed killer and other stuff, show up for in person sales appointments" and that's it. We can handle every other single part of the business at scale, even with a hundred locations. That's what we're building right now.

 

[ZCP]

I think we could start franchising as soon as next year July 2022.

 

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[Johnny boy]

@ZCP We are going to put together a franchise sales program so you'll be getting a nice sized cut for any new franchisees you send our way and help us signup. You were the one who kicked me in my a$$ and got me to do this anyways, you deserve to make money from it.

 

[Johnny boy]

A truer statement has never been uttered.

Sometimes I just want to put both of them in a room and say "Susan here said you didn't trim her hedges", and then turn to Susan and say "Jacob says you're a liar". and just watch the show with some popcorn.

 

[ZCP]

@ZCP We are going to put together a franchise sales program so you'll be getting a nice sized cut for any new franchisees you send our way and help us signup. You were the one who kicked me in my a$$ and got me to do this anyways, you deserve to make money from it.

I want you to pick me up in your jet on the way to give your 'Nick speech'.
Let's go!!

 

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[FastNAwesome]

4 people on here want franchises. let's go @Johnny boy
and yes, write the book and setup the course as a lead in to buy the franchise.

@ZCP We are going to put together a franchise sales program so you'll be getting a nice sized cut for any new franchisees you send our way and help us signup. You were the one who kicked me in my a$$ and got me to do this anyways, you deserve to make money from it.

Love this!

One time I was chatting with a fast food shop owner, and asked him why doesn't he make a franchise. As I was explaining to him what a franchise even is, he listened with a blank stare and just said:

Right...

A few weeks later, his shop was plastered with posters, reading something like this:

- Fast food business, sure profitability.
- We'll train your workers and provide equipment and everything you need.
- Just don't open shop in our location so that we don't compete.

It was an instant success, and now this guy's main business is to be vendor for other fast foods.

Point being - it can be done quickly.

30 days in of zero carbs, 1500 calories a day

Would be awesome if you can share some of your diet.

 

[becks22]

Not sure exactly how you plan to franchise but up onto about 8 months ago, I didn't even know that franchise development companies were a thing until someone told me. Now they are a target market of mine because of this point exactly. They can help take a smaller operation and get it to the market in front of hundreds of franchisees and the growth of a business just 100x in just a few years. This is a great thread to read! Especially when you are stuck in your own head.

 

[WillHurtDontCare]

Imagine bringing on a new franchisee and their ONLY job is "train and manage employees, make sure equipment works and the guys have weed killer and other stuff, show up for in person sales appointments" and that's it. We can handle every other single part of the business at scale, even with a hundred locations. That's what we're building right now.

Sick - hello massive scale potential. You could also try Hormozi's Gym Launch strategy of just teaching people who run lawn care companies them better (it made him a lot of money.

Rooting for you.

I think we could start franchising as soon as next year July 2022.

https://twitter.com/i/web/status/1518376491641409536

View: https://twitter.com/callicrates_/status/1518376491641409536

30 days in of zero carbs, 1500 calories a day, nothing but giving quotes and other admin business stuff.

Depending on your exercise routine you might feel real tired from doing this. If you have a weightlifting routine that is high volume or real heavy, you're gonna fee gassed.

I've read 11 calories per lb of body fat when you're trying to cut weight.

Godspeed regardless though, especially if you prove me wrong.

 

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[Johnny boy]

Sick - hello massive scale potential. You could also try Hormozi's Gym Launch strategy of just teaching people who run lawn care companies them better (it made him a lot of money.

Rooting for you.

https://twitter.com/i/web/status/1518376491641409536

View: https://twitter.com/callicrates_/status/1518376491641409536




Depending on your exercise routine you might feel real tired from doing this. If you have a weightlifting routine that is high volume or real heavy, you're gonna fee gassed.

I've read 11 calories per lb of body fat when you're trying to cut weight.

Godspeed regardless though, especially if you prove me wrong.

people running lawn care companies have no money because they are stupid. It's a catch 22. They cannot afford to pay me any substantial amount, so it's better to just roll up in the neighborhood and make $800 of profit each year from every single customer and sign up 5 a day in every single location and keep doubling every year until we take over the country. One little city with a thousand customers = 800k profit. No brainer.

I have too much body fat, my body uses it as energy when there's no food. That's the point of the fat in a survival sense anyways. So all I have to do is let my body survive on it's own fat until I am a desirable weight. I ideally would eat 0 calories a day. 20 lbs is 3500x20 calories. (70,000). If I burn 2500 calories a day then it would take a month. If I eat 1500 calories it now takes 70 days. Eating anything at all is just me being weaker than I should be. When you accept that, dieting becomes easy.

proof is in the results so I can only say that the less I'm eating, the less hungry I get.

 

[teambret]

Great thread JB. Thanks for all the detail. I just read the entire thread. Lots of great stuff in here that has me thinking about my next venture.