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How long do you give it.......

Discussion in 'Commercial Snow Removal' started by bigjeeping, Jan 11, 2006.

  1. bigjeeping

    bigjeeping Senior Member
    Messages: 675

    Was talking with a few "oldies" the other day and they gave me a little insight... let's hear everyone's reasons why new businesses go under

    RULE OF THREE: most snowplowing/landscaping companies go out of business after three years because:

    First Year) You're lowballing and underbidding, getting lots of work (money) with minimal expenses... you're not paying insurance, workers comp, taxes, etc.

    Second Year) You're charging more, but have more expenses because you get insurance and are paying some taxes

    Third Year) Set up payroll for employees and expenses/taxes go through the roof. You can't make enough to justify the business.


    This may or not be true. When I heard this it got me thinking about my expenses. But one thing that is sure.. minimizing expenses = increasing profit!
     
  2. grandview

    grandview PlowSite Fanatic
    Messages: 14,609

    In the fourth year when its time to make the money you have to worry about that guy in the "first" yr. taking your money because he's not thinking about the fourth yr. for himself.
     
  3. Italiano67

    Italiano67 Senior Member
    Messages: 639

    You could not have said it any better:salute: I am in the gravel truck business in the summer and most of the clowns buying trucks have little knowledge of driving let alone being a business person. Oh well, its never gonna change.
     
  4. Mick

    Mick PlowSite.com Veteran
    from Maine
    Messages: 5,546

    Failure to plan.
     
  5. basher

    basher PlowSite Fanatic
    from 19707
    Messages: 8,992

    This may or not be true. When I heard this it got me thinking about my expenses. But one thing that is sure.. minimizing expenses = increasing profit![/QUOTE]

    Cut your costs by 1% increase profits 1%. Increase your price by 1% increase your profits by 10%. This is of course assuming you weren't losing money in the first place. Not saying expense management is not critical, we try to be a lean mean profit machine, but if you provide good service and value, a 1% increase will make you more money then a 1% decrease in operating cost.payup