How important is having the right crew size to running a successful operation?
It’s one of the core elements. We are in the business of selling time. Our number one line item on our profit and loss statements is labor. Labor, it’s either efficient or inefficient. One of the big factors in determining if it’s efficient or inefficient is the size of the crew. There are a number of different factors that go into a crew, but the crew size directly affects how productive we are. It affects how efficient we are and if we’re achieving our target man hour rate.
Watch this video to learn how to maximize your lawn mowing profits.
When I got into the residential lawn mowing business, after about a year or two, I wasn’t seeing the money. We weren’t making enough money and I contemplated getting out. I just didn’t think it was going to be that great of a business. But, I kept running the numbers and I thought, you know what, there’s something to this. I want to stick it out.
There are two keys to making money in lawn mowing. First, you have to keep your service market as small and as tight as possible. Be die-hard about not expanding that until you absolutely have to…until you can’t easily continue to grow within your current market. The smaller you make it, the tighter you build your routes, the tighter your density, the more profit you will make because you’re driving the non-billable time out of your business. Every time you’re moving the truck, every time they’re driving, every time they’re loading and unloading, that costs money. That’s non-billable time. When you eliminate that, that money you recover is pure profit.
For example, if you are driving 10 minutes between jobs, that’s non-billable time. All that drive time, all that labor time, all of that is non-billable. Now you start to watch for that 10-minute period that you used to lose to driving. That labor you were spending to drive was a sunk cost. Now when you go sell a $20 job to fill that 10 minutes, that $20 is essentially pure profit.
Once you work really, really hard on optimizing your routes, building really deep density, the second thing you want to optimize is non-billable time. You want to drive non-billable time out of your company. You want to optimize your company to eliminate non-billable time. At CitiTurf, we’ve used functionality to track non-billable time: drive time, load time, maintenance time, filling the truck, getting ice, getting gas, maintenance…you can go down the list. Then, when you figure out which one of those things is your biggest offender, for example, your mowing crews’ biggest non-billable area is fueling the truck, then you focus on that as a company. How can you change this? Maybe you could get gas at night instead of getting gas in the morning. Maybe you could get an ice machine because that’s one of the reasons they have to go to the gas station. If we have an on-site ice machine, they can bring their own snacks and food for the day. Suddenly you greatly lower the amount of payroll that you’re paying and the amount of wasted, non-billable time.
You go through those things one after another. You look at maintenance. You look at filling the truck. You look at loading. You look at unloading. You look at all of these different non-billable areas. You start with the biggest offender first. You fix it, then you move to the next one and you fix it. Work on this company-wide. When you do that, your profits go up really fast because that’s where all your profit is trapped. That’s where there’s a lot of money seeping out of your company. Focus on those two things: the tightest route you can possibly build and then be ruthless with getting the non-billable time out of your business.