Most in the lawn care business dream (or at least once did) of building a big lawn care company.
How does a 10 million dollar one sound? Exciting?
The fact is, less than 1% of all lawn care companies in the U.S. and Canada gross more than $10,000,000.00 per year.
I personally like 10mm as a goal; however, I believe the ultimate achievement in business is to create a company that produces strong profits, grows and manages itself without your constant intervention. By keeping your personal debt (monthly payments) to a minimum… meaning you have more monthly take home pay each and every month than the amount you pay out in personal expenses… you have created the ultimate freedom.
I believe freedom is the bigger goal.
A big business is a secondary goal. Only to be fought for after you achieve the first goal.
Imagine a paid for house and cars. Now imagine a lawn care business that runs itself and spins off more cash every month than you need to live. You could do anything you want (within reason)… you could go anywhere you want. This is freedom. This is the ultimate business accomplishment.
You don’t need a 10 million dollar business or 10 million in the bank. You simply need a consistent means to produce guaranteed cash in excess of your living expenses.
When you’ve achieved this you will never have to make hard personal or business decisions that aren’t in your best interest.
Freedom is knowing that you don’t have to work with anyone you don’t want to, or do anything you don’t want to do or take a job you don’t want because without it there won’t be enough money to make the payments.
Too many lawn care business owners find themselves in the unnecessary position of being over loaded with debt. Lawn service and landscape businesses that cannot service the debt ultimately go out of business leaving the owner with a mountain of debt to work off and pay back over years.
Here is how to avoid the trap:
1) Don’t sign long term leases for office space and equipment that you can creatively avoid. Our lawn care company could easily afford to buy and build out a multi-acre facility. However, doing so would push us further out of the city limits resulting in higher payroll, fuel and truck maintenance costs. Rather, we’ve found creative solutions for very efficient office, storage and facility setup that keep our costs very low and our financial obligations at a minimum.
2) Don’t buy fancy trucks when you are starting out. In fact, I can’t figure out why you would ever need brand new trucks. They will almost immediately get beat up, scratched and dented. That’s the business we are in. Look for low mileage used trucks. Painting a truck is cheap… a lot cheaper than buying a new one.
3) That piece of equipment that would be really cool to own but may not be used to its full capacity should be rented on an as need basis. Wait to purchase it or finance it until you are absolutely certain you have enough work to fully utilize it and when you are sure the payments or large cash outlay will not financially strain your business.
4) Expanding too quickly by adding new service offerings that require the purchase of new equipment, trucks, employee’s, etc. Think of each new service offering as a mini business. Most businesses involve a start-up and learning phase. Adding a new service to your service mix will work much the same way. It is unlikely that it will be highly profitable day one. Can you afford the financial strain it might put on your lawn and landscape company?
5) As soon as you make some good money resist the urge to buy that new fancy truck or a bigger house. Lots of personal debt that requires you to earn a certain size pay check every week to make the payments is bad. When a challenging time arrives in your business if you can’t cut back your pay check you’ve got a problem. As a result you are forced to make bad decisions within your business to ensure you can continue to take the same size paycheck as before. Likewise, when great business opportunities come along you will be unable to temporarily reduce your pay check to capitalize on them (finance them). Far too many business owners use their lines of credit to subsidize their personal living standards. This is bad. This is how businesses are slowly destroyed. The concept of living below your means isn’t popular. I realize this idea doesn’t sell books but it’s exactly how you get rich.
And, most important… it’s how you create freedom.
6) Finally – I can’t improve on the wisdom of this Saturday Night Live episode. http://www.hulu.com/watch/1389/saturday-night-live-dont-buy-stuff
What do you think of using Facebook and Social Media in your lawn care and landscape business
