Cashing In On Cutting Crews

“One apartment complex took all day to complete,” said John Cerul, president of the Las Vegas company. “And the mowing equipment would just sit on the truck all afternoon while the technicians were doing the detail work.”

Six months ago, Cerul decided to maximize the profitability of his mowing crews. As a result, he separated his workers into five-person detail crews and seven-person mowing crews. The mowing crews do nothing but mow and the detail crews handle the rest of the landscape maintenance. The setup, Cerul enthused, is expected to bring in gross profit margins of 30 to 40 percent.

“Now we can cut two apartment complexes in one day,” Cerul assured. “The mowing crews don’t carry a whole bunch of equipment they don’t need, and the same guys are using the same equipment continuously. They are responsible for it along with two mechanics. Their livelihood rests on that equipment.”

The lesson to be learned? To maximize profitability in their mowing crews, contractors can’t be afraid of a little change to establish the right-sized crew with the right daily plan of attack, even if they learn that the previous way of doing things was more efficient.

SIZE DOES MATTER. “Mowing is the biggest thing we do,” said Kory Ballard, owner of Perficut Lawn and Landscaping, Ankeny, Iowa. “To make sure that it’s paying off for us we try to average $35 to $45 per man hour. We expect an average 32 percent gross profit margin, although some are as high as 40 percent.”

Ballard favors using a three-person mowing crew. Out of his 60 employees, 26 are strictly mowers. He has a total of eight mowing crews with a foreman in charge of each.

“If I use a five-person crew, the guys have to be good,” Ballard explained. “They tend to mess around a little more though. Big crews work on 30- to 40-acre mowing jobs, big condominiums and apartment complexes if you have good leaders with good routines. I use a three-person crew for 1-acre and up projects and they keep busy.”

Ray Pelletier, president of Ray’s Lawn and Garden, Naples, Fla., also favors three-person crews. But while Ballard’s crews do nothing but mow, Pelletier’s six three-person crews do mowing, edging, trimming, biweekly spraying and quarterly fertilizing.

“One crew does it all,” Pelletier insisted. “I don’t think clients want to see two different people out there at two different times.”

Three-person crews are fine for 10-acre and larger jobs, according to Dennis Bruce, president of Bruce-Lee Landscaping, Cranberry, Pa., but a two-person crew is ideal for residential jobs.

“The third worker generally slips through the cracks and is less productive in a three-person crew on smaller jobs,” Bruce explained. “If you use a two-person crew, you know they are both equally responsible to get the work done, especially in smaller yards where there is more downtime. And I don’t have to pay for the travel of the third person. This way I can get two commercial properties mowed or 15 to 25 residential properties mowed each day.”

With this setup, Bruce generates $25 to $35 per man per hour on residential sites and $35 to $45 per man per hour on commercial sites. Generally, his expected gross profit margins are approximately 65 percent.

Paul Skinner, owner of Total Grounds Systems, Orlando, Fla., also relies on a two-person mowing crew even though his business only cuts commercial sites ranging in size from 20 to 25 acres.

“Nine hours a day all they do is mow,” Skinner said. “It takes just one of those mowing crews to support four or five of my four-person maintenance crews.”

Generally, mowing technicians don’t have any other responsibilities besides mowing. Ballard’s mowing foremen work with scheduling a little bit and keep an eye on each project for irrigation and weed control concerns. If such services are needed, they can call back to the office and inform the maintenance crews of the problem.

Bruce is currently debating whether his mowing crews should also do some weed pulling while they’re on the property.

“We think it may be more profitable if the crews weed the beds while they’re there because they are there every week,” Bruce said. “That way we’ll get weeding done in 20 minutes every week instead of it taking four hours every few weeks.”

FOLLOW THE YELLOW BRICK ROAD. The route a mowing crew takes throughout the day is also a factor on the crew’s profitability because of travel time. More time spent on the road is less time spent on the job.

“We stick to our schedules,” Ballard insisted, adding that he only accepts jobs within 30 miles of the office. “We used to go out of our route to stay busy, but we don’t anymore. And we’ll turn down customers who need their appointment changed to another day.”

The supervisors in charge of the mowing crews at Park Landscape dictate what days mowing will get done and what days detail work will get done on a certain property, Cerul said.

“Mowing and detail work are never done in the same day,” he noted. “Out here in the Las Vegas heat, are a lot of plant materials and turf dries up quickly. So it’s good to have a different set of eyes look at the property almost every day of the week. And it’s good for customer relations.”

Bruce splits up his mowing crews’ routes by the importance of his accounts. He sends crews to his larger, more prestigious residential clients on Thursdays and Fridays because they want their yards looking immaculate for the weekends. He sends mowing crews to his commercial sites on Saturdays when no one is there or on Mondays and Tuesdays so they’re looking good for the beginning of the week. Mondays, Tuesdays and Wednesdays are also good days to send crews to the “non-picky” residential clients, Bruce said.

ON THE DOTTED LINE. Using contracts for mowing jobs, especially with commercial properties, can help contractors predict what kind of profit they’ll be turning based on money spent for equipment. Contracts ensure contractors an estimate of how long they will have a certain client and how many hours per week in mower time will be spent on that property. Bruce tries to extend his company’s year-long contracts to two or three years for commercial sites.

“That way, if I buy a $15,000 or $25,000 mower, I know it will get good use for the next three years,” Bruce explained. “The only problem is that we usually can’t raise our prices until that contract is up.”

Annual contracts can be very general one-page forms or they can be detailed, numbering up to 150 pages.

Perficut’s contracts for commercial sites explain its rates, services and damage policy, Ballard noted, while Bruce-Lee Landscaping’s contracts are more specific.

“In our contracts, we spell it all out, down to the number of cuts for the year and the day of the week we’ll be there,” Bruce explained. “We average 32 cuts for the year. If it’s dry and we only do 28 or if it’s wet and we do 34, we make sure to say in the contract that the payments stay the same.”

Commercial property managers appreciate the exactness of the specifications included in landscape maintenance contracts, insisted Cerul, who’s nine- to 14-page contracts are also extremely detailed.

“Most of the commercial sites we mow never had specified requirements before,” he said. “When they look at our contract they know how often their turf will get fertilized, how often their trees will get trimmed and exactly when we’ll be there. They really like it.”

When it comes to residential customers, though, contracts are not preferred, Ballard reported.

“Because there are so many competing companies for residential jobs, contracts tend to scare people away,” he warned. “No one requests it. Besides, they feel more comfortable with a verbal agreement; and we haven’t had any problems keeping residential customers for five to six years without contracts.

“Typically, all contracts have a clause explaining that they are void after 30 days with a request letter by mail,” Ballard continued. “So, anybody can get out of one in 30 days anyway.”

That includes the contractor, Bruce noted.

“It’s good to know that in 30 days you can get rid of the customers that are overly picky or consistently late on their payments,” he said.

Both Pelletier’s commercial and residential clients have his one-page contract with exactly 12 items on it, the last one being the 30-day clause.

“We treat ours as a non-binding agreement, pointing out the 30-day clause,” he stressed. “And it’s the best type of contract to have with residential customers. This makes the contract no more or no less than a gentleman’s agreement.”

In addition, contracts can serve as annual reminders that update customers on additional lawn care services and any price changes at the beginning of a new season. Some contractors elect to send out an informal letter with a contract to their residential customers each January reminding them that they are starting a new year of services. This also gives them a chance to explain if and why they are raising prices for the next year, Bruce said.

“It’s a real informal note telling them that we will be back out to start a new year of services,” Bruce explained. “Also, mowing spawns other business,” he continued. “I’ll do anything to remind my mowing customers of my other services.”