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Afraid to expand?

Discussion in 'Commercial Snow Removal' started by Boyerlandscape, Dec 20, 2013.

  1. Boyerlandscape

    Boyerlandscape Member
    Messages: 31

    Hello all,

    Long time reader of the site, first time poster. I'm a landscaper (work for a company) and i have a few small mowing accounts i have on my own as i slowlyyyy start to create my own empire. I've been in the industry for 6 years now. All four seasons, and snow is by far my favorite. Started out shoveling for peanuts, leading my own shoveling crew, skid steer, trucks....now winters mean big money for me. My own commercial contracts, subs, etc. I do 5 small-medium sized commercial lots. From my experience as a lackee to my own operation, i've learned a lot and continue to each time i go out. I come from a town where theres a landscape company on every corner. Competition is tight, however theres those 2 or 3 big name companies with the big shop, big fleet...the dream. I look at one of the large accounts in town, a Shaws along with a whole plaza of businesses all in one lot. They have a 3/4 ton with a sander, and two loaders with boxes. Through being in the field, i got wind they get that place for $120k this year.... Its a whole year away, but i think about potentially going after that place next year. Observe their operation this year, see what i could do better/more efficiently and put in a bid.

    I'm comfortable with what i have now, but bigger is better and the sky is the limit. I own one truck, i hire on subs for the rest of my stuff....why not apply this to a bigger more profitable account? I've been looking at purchasing a larger tractor or older loader...hell even leasing one or two for the season would work in my eyes, and i could still make a killing. Even after fuel, sand/salt, payroll, etc. I could still walk away with 0-40k ish...my question is....for you guys with Walmarts and other big accounts, at what point did you feel comfortable that you could handle it? A whole year away i know, but $$$ and frankly i love snow. Looking forward to what you all have to say.
  2. kg26

    kg26 Senior Member
    Messages: 300

    Good question I personally would like to get my foot in the door with smaller offices. If anyone could help with that I'd be all ears. My opinion If your equipment is up to par with theirs I'd go for it. Subs are cool but no one is going to take care of your baby like you are.
  3. Boyerlandscape

    Boyerlandscape Member
    Messages: 31

    The smaller stuff is easy...er. I think it would be better to be on one site, rather then running around between a bunch of smaller ones. Subs run their own trucks, own insurance.
  4. brianbrich1

    brianbrich1 PlowSite.com Addict
    Messages: 1,077

    The question is if you take on a big place like that it is not always about finding equipment to do it. The real question is do you have the ability financial to pay your bills, subcontractor, lease of equipment, breakdowns, salt and employees if your payments don't come when you think it should? What if that big lot decides to play hardball and dispute or not pay? Can you financially handle that?

    When trying to expand don't look at how much equipment you can get for potential customers but rather your financial stability as most times that could be most of your stress in the winter not necessarily getting a location done by 6 am. Over extend yourself and your not growing but just pretending.
  5. Mick76

    Mick76 2000 Club Member
    from Maine
    Messages: 2,157

  6. blowerman

    blowerman PlowSite.com Addict
    Messages: 1,261

    Clearing snow is the easy part....try to develop a route that's profitable and works, not just grow to grow...
    Our main concern is creating a solid structure behind the scene. As I tell customers, "our problem won't be your problem"! Many threads talk about breakdowns and other issues during snowstorms, try to perfect that side of the business. Machines, trucks etc. are easy to get. You'd hate to have a wheel loader sitting at that big box with a flat tire (not realizing the valve stem is a big bore) or frozen batteries because it hadn't snowed it two weeks and temps were -0f.
    Don't worry about mega growth, it's not all it's cracked up to be.
  7. erkoehler

    erkoehler PlowSite Veteran
    Messages: 3,252

    Floating the expenses is one of the biggest hurdles, owning a loader is great until you have 3-4 storms a week and you've now had to fill that 100 gallon fuel tank on it how many times.

    Fuel, salt, sand, labor, higher insurance coverage, etc. All add up when you want bigger sites
  8. jrs.landscaping

    jrs.landscaping Senior Member
    from Maine
    Messages: 638

    The shaws plaza in my area goes for the same money........ minus the one in the front ;)

    Like the others have said the plowing is easy, it's the floating 10-20k for a month before the next billing cycle.
  9. G.Landscape

    G.Landscape Senior Member
    from Ontario
    Messages: 834

    not over extending yourself is key. Its easy to go rent a loader or 2 and have then sit on site but when break downs or lazy employees come into the game your client won;t care. they only thing they are going to notice is their lot not being plowed.

    - Where are you getting employees? How are you going to keep them busy/employed/happy between storms.
    - What is your backup plan for breakdowns?
    - How are you going to prove to these clients you can handle it....references. (Saying you have been plowing driveways for 10 years is not a reference for a 6 acre parking lot)
    - Money.....as many other mentioned you need to have financial backing to cover a few months expenses before their payments come in.

    I have seen a few companies around town make the jump from small companies to trying to manage huge plazas and malls and let me tell you they become the talk of the community, and not for good reasons.
  10. Buswell Forest

    Buswell Forest PlowSite.com Addict
    from NH
    Messages: 1,668

    I would pursue the jobs that are easy money. The places with fewest headaches, like cars, rocks, no place to pile snow, heavy traffic roads out front, and like that..doing multiple entrances during the morning or evening commute rush is like playing frogger with the truck.
  11. agurdo17

    agurdo17 Senior Member
    Messages: 124

    Im kinda sitting in the same situation as you are except maybe a little bit further in. I am running two trucks and service 44 accounts, 7 lots for winter and 45 lawns in the summer. Want to take the dive in but my biggest concern is having to hire a real full time long term guy for my business. Part time help makes big time headaches. Real question is what someone like that has to make an hr. Or what to pay salary for the the year.
  12. G.Landscape

    G.Landscape Senior Member
    from Ontario
    Messages: 834

    IMO salary really is an attractive way to go for a full time seasonal work where hrs are always a toss up. Comparably you make work longer hours in the summer and less in the winter but the steady paycheck makes for a much more comfortable living. Just base the salary on say 2000 or 2500 hrs and keep track so at the end of the year if they are above those hours they are compensated for that. If they are under.... well taking money away is hard but maybe consider it a bonus if they did good work.
  13. blowerman

    blowerman PlowSite.com Addict
    Messages: 1,261

    Not to debate the status of a full time employee, but you can't salary what the government defines as a hourly job. Just pay your first employee a reasonable hourly rate and if he's good give him quarterly bonuses. Not worth a bonus? Then he's not earning his hourly keep. Something that took me too long to learn; get rid of dead weight and keep looking for the right ones.
  14. Boyerlandscape

    Boyerlandscape Member
    Messages: 31

    Well guys, you've highlighted some things I hadn't even thought of. Seems a good line of credit Is crucial in the field. That said, I'm still very interested in purchasing a wheel loader. I've seen Hough models for very cheap. Breakdowns are expected, but I have a good background in hydraulics from my days crew chief'n jets in the force, and I got plenty of welding friends. Even if I subbed it out to a larger company with operator, would it be worth the time and money into it?
  15. Flawless440

    Flawless440 PlowSite.com Addict
    Messages: 1,543

    I wouldn't even step to something that big and i know i could handle it. Might take a few signature loans here and there to float it.
  16. jrs.landscaping

    jrs.landscaping Senior Member
    from Maine
    Messages: 638

    You're kidding about the Hough right? There's a reason they're cheap.......
  17. ANA Proscapes

    ANA Proscapes Senior Member
    from NH
    Messages: 109

    Bigger definitely is not better. There are many, many, many headaches that come with it. Every one has pointed out a lot of things for you to think about. The 2 main things being cash flow and employees. I can speak from experience that employees always have something better to do than be at work on time or at all. Good employees are hard to find and even harder to keep as there is always greener grass on the other side of the fence. As for the money. Doing small commercials aren't going to cost no where near as much as a large site like you want to take on. The fuel cost alone will kill you if you get a lot of snow storms back to back. One loader not so bad. But if your talking about 2 loaders then you better have some money stashed away. We just did 2 nights of snow removal with 3 loaders and each one burned about $200 per night in fuel. That's $1,200 just for 2 nights. Just to give you some insight on what your gona run in to if you actualy can land this job. But on the other hand if you can land it and do get a newer loader and have a line of credit or a good bank roll then you could do well at it. Good luck with the rest of the winter.
    Last edited: Dec 21, 2013
  18. blowerman

    blowerman PlowSite.com Addict
    Messages: 1,261

    To give you positive encouragement; Are these large lots cut up? Sometimes you can get away using a skid loader or two on big lots if they aren't monster pushes all to one spot. Maybe a ag tractor. Any decent subs in your area to help support you? Team up with someone that will sell you bulk salt as needed to avoid sitting on that expense....
    We've all shared a few thought with you in this thread to help out. Bigger isn't always that bad, otherwise none of us would do it.
    But watch a quad (WI trucks-22-24 ton) show up once or twice a day bringing in salt to refill a bin and then fuel the machines and trucks, pay the bills, then wait for people to pay you. That's been our life lately.
    Read the other thread about the guy who rented a loader & box plus 30 ton salt only to loose the account after one push this season. To some that would put them out of business or at least in a small bind.
  19. leigh

    leigh PlowSite.com Addict
    from CT
    Messages: 1,968

    Oh to be young! I'm trying to downsize, it's tough in my area. Constant calls for service. Be careful .bigger isn't always better! Provide excellent service and get into the high paying jobs. Don't lower prices one cent for a job, just spinning your wheels and acting like a bank, money in, money out. It's not your gross that matters, it's what you're paying taxes on at the end of the year. If you groan at your accountants office in april, that means your doing ok!
  20. agurdo17

    agurdo17 Senior Member
    Messages: 124

    Oh how the truth hurts! This is my first year of really saying ouch lol