· Year-Round Business ·
The Year-Round Three Ring Circus Business
Your business does not experience weather anomalies or seasonal downturns.
Because you provide more than one service, you fall into the three ring circus blueprint.
Newer businesses that use this blueprint tend to overbuy equipment, such as skid steers, mini-excavators, lawn mowers, lawn applicators, mini skid steers, oversized dump trucks, and ride-on leaf blowers. Depending on your scalable business model, your overall equipment costs could range between 5% and 15% of your sales. These costs include not only direct costs but also leases, insurance, fuel, and maintenance.
In this business blueprint, the pricing of services and materials is typically incorrect. The correct and full labor burden is not identified, and the labor margins and mark-ups are not at the proper percentages to produce a high enough profit. As a result, businesses often cannot cover the costs of their day-to-day operations, including their labor costs. The inability to connect with true labor costs creates challenges in recruiting and retaining good workers. In addition, not everything that should be included in job estimates is being included, which throws off the calculations.
Crew size can be a big issue in the three-ring-circus blueprint. You can start bleeding profit fast if there are too many people on a crew and the labor is not being tracked. Field labor should run between 20% and 35% of your sales. When field labor hits 30% or more of your sales, there is likely an issue with project management.
Compared to the one-trick pony, the three-ring circus requires two to three times as much overhead to run and manage. You need equipment for each type of service, and each of these services is seasonal. Space is required to store the equipment, in addition to insurance to cover it. For each season, you need to ensure you have a properly trained crew on hand to provide the services you offer. It’s no wonder that the owners of this business blueprint sometimes feel like circus ringmasters.