Herman: John L. Herman Jr., Author

Signs of Spring...

As winter finally melts away, signs of Spring are popping up all over the place. One sign said “Lawn Care Business For Sale” and another one said “Gutter Cleaning Business For Sale” and still a third said “For Sale By Owner.” Yes, signs of Spring are everywhere.

Oh, you were expecting Crocuses and Easter Lilies?

The signs used to be about hiring people to do work now that the weather is breaking, but instead that small business owner who would seek new customers at this time of year is now trying to get out of his or her small business. They want a buyer to emerge not more business. They are throwing in the towel in the first round of the fight. Hell, they are quitting before the ring card girl has even walked around holding up the number 1. Why?

I called one of the numbers on those signs yesterday. What did the lawn care business owner want for his small enterprise? Eighty thousand dollars was what it would take for him to turn over his weed whackers, lawn mowers, trailers and pick-up truck to some new entrepreneur to give the seller a greater return on his “stuff” and his customers than he made in profit last year. I waited a breath or two before responding, and he quickly added, “But I’ll take the best offer I can get.” This is of course before the lawn care business owner has to face the reality that this Spring his business will continue to decline…for the third straight year.

Two years ago he grossed over $160,000.00 and last year he did $110,000.00 but this year his regulars are expected to cut back even more which means he will be working hard for less money again this year. And, one of his two workers is nowhere to be found so he has to go look for a new employee to hire and train and hope they don’t cut some ladies rose bushes to shreds during the learning curve.

Last year the blame on the drop in business was the rain drought. This year it will be his customers’ money drought. So rather than face a third straight declining year this lawn care maven is tossing in the towel and hoping you will bail him out. Hmmm…looks like another big business characteristic has come to small business. Look for consolidation in the lawn care business this year.

Short term lawn care business owners will take it in the shorts this year and give up…some shrewd long term lawn care business owner will buy up a couple of competitors cheap, perhaps for the cost of some used equipment and a “payout” on customers who stay with the business, and some “small lawn care business owner” will in the next two years become a rather “large lawn care business owner” because guess what…homeowners are getting older and don’t want the hassle of cutting the grass…so while this year and maybe next year overall business may slip a little, eventually it will bounce back much bigger, and then I would advise the emerging “large lawn care business owner” to either sell his huge enterprise at the top, or perhaps cut it up into pieces and make a great return on the customer base he is buying cheap now.

Think this posting is about lawn care business? Read it again. This applies to any small business out there folks. Don’t let some new guy into your sandbox at a cheap entry price so that in two years he or she is cleaning your clock. Maybe this is the time to expand, not cry over falling revenue and a declining customer base.

• Posted: 11 March 2008
• Comments: 0
• Category: Business failure

Comments