Congratulations! You’ve now moved through the creation of an entire set of systems to run your lawn care business and that should set you up for continued growth and prosperity.
Now that you’ve developed the repeatable systems to:
Handle how the work is performed
How to bid on and close new jobs
How to hire and manage people and all of the auxiliary stuff
Now… you’re ready to plot out how you’re going to get from working by yourself to hiring 3 new guys and running 2 crews and making $300,000 by the end of the year, or at least setting yourself up for year 3.
So as we talked about early in the guide, we’re assuming a hypothetical situation for Mean Green.
We’re going to assume that its January 2nd, that you currently have 100 customers and that by the end of this year, you’ll have hired 3 new guys and be running 2 crews. One of which is run by you and one by Kevin Clueless.
In order to do that, we need to assume a few more things for this example. First, we’re going to use the numbers from the first blueprint regarding customers.
We’re going to figure that an average yard bills out at about $35 per mow and that each new customer you sign up is worth a total of $1,150 per year. That includes mowing the lawn, snow removal, leaf cleanup and any other services you perform for them throughout the year.
We’re also going to figure that you’ll be closing 3 new customers each week for the entire year. That’s a total of 156 new customers.
Now, will that happen exactly that way all the time in real life? Probably not. There may be weeks where you close 1 or maybe none at all. Yet there may be weeks where you close 6 new ones. So we’re going to assume an average of 3
You can make this happen by instituting a strong marketing system as we’ve discussed.
Okay, so where are you right now? You’ve got 100 customers which generate a total of $115,000 for the year.
100 X $1,150 = $115,000.
Now if we stick to the idea that you’re bringing home $60,000 and that in order to make that money, your business is grossing $78,000 – this includes expenses and taxes – then for this New Year, in theory at least, you’re going to be left with an extra $37,000.
$115,000 - $78,000 = $37,000.
Naturally, though, you’re going to do something with that money.
Maybe you’ll boost your salary. Certainly you’ll put some away for the future. Because the plan is that after 6 months or so, Kevin is going to be ready to start his own crew.
Of course, that means that by that time, you’ll have to have enough business to support him and his helper.
Right now, though, you’ve got to worry about paying Kevin $15 per hour when you first hire him. Will you actually pay your first helper that much to start? I don’t know, it depends on your market and on you. You may start him at $12 and move him up after the first month or so.
For the purposes of this example and to keep things simple, let’s assume he starts at $15.
Well that means that Kevin is going to cost you around $33,000 including the part of his payroll taxes you have to pay. Of course, you won’t be hiring him on day 1, so we can assume his annual salary will be a bit less for the first year.
Of course, if you’re closing 3 new customers each week, your income should quickly overtake his cost to you. Thankfully you’ve got that extra $37K to give you a head start.
Okay, so let’s figure it takes you a month to find and hire Kevin. By the time you hire him, you’ve now got 112 customers that you’re serving each week for a total average weekly gross income for Mean Green of $2,476.
112 X $1,150 / 52 weeks = $2,476
Remember, that $1,150 is a total of all the work you do. In the summer, you will probably see each customer once per week. In the winter, maybe every other week. Now these numbers aren’t truly reflecting reality because while a mow might cost $35, a half a day of yard cleanup might cost $75.
What I’m doing is really simplifying things so that you can plan out how you’re going to approach this year. It may be that you wait to hire Kevin until April when business begins to pick up. That way you build up a larger customer base and when it gets really busy, you’ll be prepared.
For now, let’s use that $2,476 number as our average for February…
Okay, so if you’re paying Kevin $15 per hour and yourself $30 (that’s about what it is for a $60K income), then your weekly payroll for a 40 hour work week comes out to about $1,935.
Here’s how I get that:
40 hours X $45 per hour = $1,800.
40 hours X $45 per hour = $1,800.
That leaves you with about $540 each week that’s leftover. That goes toward fuel, savings, etc.
That leaves you with about $540 each week that’s leftover. That goes toward fuel, savings, etc.
What’s even better is that you now have 1.5 times the production capability so that it should be possible for you to keep up your marketing and bidding cycle to close 3 new customers each week.
That also means that your gross revenue continues to grow, which continues to widen the gap between what you’re paying out and bringing in.
So for the next few months, maybe as much as 6, you’re training Kevin. This is where your systems really come into play. You’re showing him just about everything and how you want it done.
The exceptions would be most of your operations systems revolving around payroll, invoicing, marketing and such. At least for now anyway.
What you’re doing here is two-fold.
First, you’re putting Kevin into your lawn care machine as a raw recruit with the objective that he’ll come out the other end as a pretty much exact copy of you. Meaning he thinks like you think and he acts like you act
How is this possible ?
Its because he follows the systems you’ve created to the letter and maintains the level of production and the P/PC balance you need in your business. It also means he’s ready to take over his own crew because you know he’ll do what you want him to.
In this first baby step, you’re also training yourself.
You’re figuring out the best ways to teach Kevin the ropes. In essence, you’re actually creating another system that is a teaching tool. What’s awesome about it is that not only are you teaching Kevin as well as yourself… you’re teaching Kevin how to train his helper when he gets one.
This, on a very small scale, is the power of duplication.
So now it’s time to cut Kevin loose and let him run a crew.
You’ll obviously need another truck and trailer as well as a new set of gear. After these first 6 months or so, you should have some money saved and the borrowing power to get this done.
But can your business support it?
So you want to start a new crew. Before you do, you need to know a few things…
The first question should be easy enough.
By now you should have some money set aside for this purpose. We’re assuming it’s the beginning of July. You hired Kevin at the beginning of February and have been training him for 6 months.
You’ve also been signing up 12 or 14 new customers each month during that time.
So each month since you’ve been adding $1,150 on top of the previous month’s income. Assuming you haven’t increased your expenses or upped the pay.
So your business has earned a little over $22,000 in that time.
Okay, let’s figure you had expenses and you did the incentive programs we talked about. Maybe you’ve got $12,000 set aside.
In our first blueprint, we figured you could get started for $25 to $30K. Now you need a new truck (new to you at least), trailer and a set of lawn equipment.
If we figure that costs you about $36,000, then you’ve got 1/3 as a down payment and you have to finance the rest, $24K.
That might cost you about $400 per month. So you have to figure that into the cost of your new crew. Hopefully, though, you’ll be able to pay that loan off fast. The more liquid you are, the less debt you have the better.
Now on to point 2. How much income does your business need to support Kevin and his helper, let’s call him Matt Mowerton.
Now on to point 2. How much income does your business need to support Kevin and his helper, let’s call him Matt Mowerton.
Well, since Kevin is now a crew chief, you’ve given him a raise to $20 per hour. You’re also going to start Matt at $15. So what do these guys cost you each week? If you guessed $1,505 then you win the grand prize!
$35 per hour X 40 hours = $1,400.
$1,400 + ($1,400 X 7.5%) = $1,505.
Now of course there are the expenses. We’ve got that $400 per month ($100 per week) loan and maybe another $145 per week in expenses. Stuff like fuel, parts and so on.
So what does Kevin’s crew cost you each week?
$1,505 + $100 loan + $145 expenses = $1,750.
See how I made all the numbers nice and neat?
In truth, of course, when calculating monthly expenses, you multiply or divide by 4.3. Because there aren’t exactly four weeks in a month, but I’m rounding to make things easier.
Okay then. So how many customers does Kevin’s crew need to break even?
$1,750 / $35 = 50.
Assuming the average price per customer is $35. To be honest, though, you should really boost this number up a bit. Let’s assume 60 just to be safe.
Okay, so in order to support Kevin’s crew, he needs 60 customers each week at an average of $35 per visit. Sounds pretty easy, and Kevin and Matt can certainly handle this work load and then some.
The question is… how many customers do you need in order to at least maintain your $78,000. That’s your payroll plus business expenses that haven’t changed. Because even though you created a second crew, in theory, your 1 man crew has the same expenses as before and maybe more.
Well, if you recall from our first guide, that’s about 70 customers. So in order to answer the third point above, even after cutting Kevin loose, you still need 70 customers.
Well how many do you have by July?
If you figure you’re adding 12 or 13 new customers each month, then by now you should have added an additional 75 or so. Well, if you started with 100, you’ve now got 175. Since you only need 130, you’re in good shape, right?
Even if you’d started this year with only 70, you’d still be ahead of the game
But uh-oh… there seems to be a problem. You’ve got 175 customers to service.
You know from your own experience that you can handle 70 to 100 by yourself. Yet 100 requires a lot of work on your part. And you’ve still got to handle your marketing, visiting customers and making bids and other stuff.
You know from your own experience that you can handle 70 to 100 by yourself. Yet 100 requires a lot of work on your part. And you’ve still got to handle your marketing, visiting customers and making bids and other stuff.
The solution is pretty simple when you think about it. If you can handle 70 customers pretty easily in a 40 hour week, then in theory, Kevin and Matt should be able to handle 105, right? Assuming they’re 1.5 times as productive as you?
That’s awesome, because you can give them more and more work. Maybe they want more than 40 hours and you can send them 120 customers, cut down your work load and spend more time working on your business rather than in it.
Of course… you’re still adding customers. You still have your own crew of 1 and you’re getting busier and busier each week. So you need to hire a helper, too. For two reasons – first you need the extra pair of hands and second you’re going to want to start a new crew in the future and you’ll want to train another guy like Kevin.
All you have to do is figure out how much a new $15 per hour guy costs you each week and then determine how many new customers you need to cover him.
Frankly, at this point, you’re already there and you’re adding new customers all the time.
Do you see what’s happening now?
All of your systems are running – you’re growing a larger customer base.
You’re adding and training new people who can one day take a crew over. If each crew costs you $1,750 or maybe even $2,000 per week and they’re generating $3,500 per week, then each one of your new crews is adding to your personal income.
You’ve now reached the threshold of another whole level of business. For a while, you’ll keep duplicating yourself until you have about 4 or 5 crews running. At that point, you should be able to completely remove yourself from the day to day work.
Your new crew chiefs will come from guys like Kevin who started as helpers and moved through the systems you’ve created. As you grow, you’re going to find that you’ll have to create new systems of middle management. Guys who run a couple of teams themselves.
This is level 3 and it’s where you go from a small but successful business to a potentially huge multi-million dollar company. Although level 3 does operate on the same principles we’ve talked about in this guide, there are some differences.
And that, my young friend, is a story for another day. A whole new guide that’s going to take you as far as your imagination can conceive.
If you've made it this far, congratulations.
I can tell you're serious about your lawn mowing business and using it to achieve your goals and to get what you want out of life.
Work this blueprint and it’ll work for you. Follow the advice I’ve given you.
You’re going to have to plug in your own numbers and do your own calculations, of course. This chapter was just meant to show you the process. Good luck and happy mowing and growing!
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