Time to purge?!

Discussion in 'Business Operations' started by Kitman, Jun 3, 2018.

  1. larryinalabama

    larryinalabama LawnSite Fanatic
    Messages: 20,414

    Ive got one that I need to get rid of, the owner has been in bad health for several years so I keep doing it out of respect.

    Im actually kind of suprised natur hasnt purged this one yet.

    The problem I have the homes that are hard and time consuming all have irragation and are year round. Im scared too cut them loose.
    hort101 likes this.
  2. Triptoy2002

    Triptoy2002 LawnSite Member
    Messages: 39

    Every August I raise prices on customers that cost me more than I’m charging. It is never a huge increase, probably $5 per visit max, but I try to reevaluate everyone annually. If a customer calls every week about some trivial nonsense, or they can’t figure out how rain delays work, or they come out and talk to me every time I’m there, etc, price goes up. The same deal for lawns that are a pain to do, or too far from my other work, or that take longer than I anticipated when I bid the place, etc.

    None of my customers are on a contract, I just charge them after each visit, so the price is not set in stone. So far, nobody has given me that hard a time about raising the price. I also have a guy that works for me on Mondays, so if I anticipate rain that week, I work long days and try to get the work done a day early. I end up with calls from maybe 60% of my newer customers the first couple times I do this, but after I explain that I wanted to beat the rain, they generally understand. And if they don’t, then August will bring a surprise.
    Bcoogan23, Lanton and Kitman like this.
  3. Gus McGee

    Gus McGee LawnSite Member
    Messages: 149

    Don't throw good money after bad. If a job is not under signed contract, raise your price enough to make it worth your while it cut it loose. The only time it is worth it to lose a little bit of money is if you are trying to break into a new area.
    hort101 likes this.
  4. snomaha

    snomaha LawnSite Bronze Member
    from midwest
    Messages: 1,590

    I thought I would bump this thread and give an update on numbers now that I have Q3 and Q4 (ends thanksgiving) data to pull from.

    We walked away from 450k of sprinkler install revenue at the end of Q2 after studying reports specific to that book of business. After reviewing the last three years we found that the install price per job had thin margins, but was probably worth doing as long as we picked up the customer for service. The soft costs we weren't able to bill for were killing us - grader hit a head, sod company didn't cut out all the heads, foundation settling snapped mainline connection to backflow.

    Looking at 2017 vs 2018 Q3 and Q4 sprinkler division only:
    Revenue down $155,153
    Gross profit dollars down $8,647
    GP percentage has gone from %51.83 in 2017 - %67.31 in 2018

    Think we made the right decision - saying no to the right things makes a huge impact!
    hort101, BrendonTW, zlandman and 10 others like this.
  5. JFGLN

    JFGLN LawnSite Bronze Member
    Messages: 1,516

    I did a purge this summer. Those unprofitable jobs seam to creep up on you.
    hort101 and grassmonkey0311 like this.
  6. oaksandiron

    oaksandiron LawnSite Member
    Messages: 20

    I love when they fire themselves before I have to fire them! Usually.
    hort101 and Tara Ann like this.
  7. TCSGuy

    TCSGuy LawnSite Member
    Messages: 87

    We only do landscape lighting installation/service and irrigation service. There is barely any profit in sprinkler installation, and IMO not worth it. The profit margin on landscape lighting installation is good, hence why we do it.

    I purge customers every year for the last 3 years, and starting later this season, we only take new customers who are referrals of current customers. Our services are expensive, and our markup on parts is equally as expensive. However, we actually honor the warranty and are fair when it comes to billing. We tried attracting new customers this season using discounts etc... But that only attracted the cheap, non loyal customers.

    I purged 4-5 customers this year. None of them really had issues with their billing. But they all thought that they were my only customers and that I should do what they want when they wanted. One customer was livid that I wouldn’t come out to install an additional Zone IN THE MIDDLE OF A STORM! My thought process is that if they are too much of a PITA, cause me grief, or don’t spend any money, then they get dropped. For the 4-5 I purged, I picked up about 12 new referrals, which spend as much if not more than the ones I fired.
    hort101 likes this.
  8. ed2hess

    ed2hess LawnSite Fanatic
    Messages: 15,926

    when I seen your title I thought....
  9. Anthony Divit

    Anthony Divit LawnSite Member
    from Pa
    Messages: 156

    I purge every winter. Over the years I was able to keep everything about 10-15 minutes from house. I usually take what I am charging and look at my cost and see what makes sense. Every time I do this by springtime I make up any lost business I cut with closer more profitable work. I am a two man show and have 45 lawns. 90% of them are over 3 acres. I like bigger lawns as I don't have to travel with the equipment so much. We run 60's and 72 so we gear ourselves for bigger properties. I do sell all my customers I cut. I Iike to make some departing money.
    hort101 and wbw like this.
  10. South Hills Lawns

    South Hills Lawns LawnSite Member
    Messages: 56

    Yes sir. People who are unprofitable. Maybe a long drive time or someone I under bid.
    hort101 likes this.

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