If you haven’t read last week’s tip of the week go to our website, www.wam-usa.com and check it out before reading this one.
I had another new client this past week and the whole “know your numbers” thing came straight to the forefront again.
This gentleman was about to quit his $100k a year job to start a landscaping business. He came to me with a list of questions about industry pertinent and marketing but I was able to divert him back to some more basic things.
Here is the shortest version I could muster of the situation.
He wants to simplify his life and just be a one truck operation with one employee primarily mowing lawns and he is content with making only $70k a year net.
By his own numbers, the average lawn will be $50 per visit and will average about 30 minutes on site. He figured he could do 16 yards a day, 5 days a week for 10 months a year. He would gross $160k a year, pay his helper and expenses and still have a little cushion. Sounds good right?
The first question I asked him was about the time each day to set up the truck, maintain the equipment, drive to and in between the jobsites, write estimates, send out invoices, handle collections, conduct banking, deal with insurance, licensing and all of the other things related to operating his business? This resulted in the realization that 16 yards a day was going to end up a 10 – 12 hour a day or that his 8 hour a day goals were going to have to mean cutting back to a goal of about 10 yards per day.
The second question I asked him was how many times a year does the average lawn in this area require a mowing visit? He didn’t know. It’s somewhere between 30 and 36 so we agreed on 33. With these two simple questions his annual gross income went from $160k a year to $82.5k.
That was just the beginning. I don’t know whether he has fired me or whether he is still going to quit his job and pursue his new landscaping business but I’m glad all the same that he was referred to me and that hopefully I saved him a lot of pain and suffering.