By: Larry Iorii
An event happened in my first year of business 31 years ago that changed my view of the landscape industry and my place in it. As I recall, we were mowing a customer’s lawn on a hot and humid afternoon and had forgotten to bring water with us. Innocently, we asked the customer for a drink of water. He, in turn, offered us a “deal.” He said that if we pulled some weeds around his tree, he would get us some water.
The dust still hung in the air and the customer’s mouth dropped open in surprise as we packed up and hit the road. We never worked for him again. I promised myself then and there that I would improve our level of professionalism and do whatever I could to build respect within the industry.
I’m not crowing that I’m any more knowledgeable about the landscape industry than any other veteran small business owner, but I have learned a thing or two that works for our company. In that light and realizing that all companies are different, consider the following suggestions, most learned the hard way:
1. Make the majority of purchases on credit cards. The key is to pay all balances in full when the statement arrives. Each of our cards has a monetary reward. To date, we have $12,000 of credits toward new trucks.
2. Price mowing contracts seasonally, not by the cut. Our experience has been that, over several years, the company earns at least a 15 percent profit annually pricing this way. Price-per-cut companies are less profitable in years when it’s too dry or it rains a lot, causing more cuts.
3. Push for three-year contracts for commercial and common grounds maintenance. This allows you security in case of personnel changes. You may not always get them, but try.
4. Join your local and national industry and service associations. This is the fastest way to kick-start your business. Participate, network and run for office. You’ll increase contacts with colleagues and suppliers; you’ll improve your profits; you’ll build your education and you’ll have more fun.
5. When purchasing a shop for your business, go large. If your business in the growth mode, or you plan on growth, it’s surprising how fast you can outgrow your initial location. We rent extra warehouses and outside space for storage and parking.
6. Take before and after photos of your work. Digital photography makes this a no-brainer. Make two sets of prints or two CDs and send your client a copy. It will give them something to show their family and friends.
7. Specialize in a particular area of service, and do it better than competitors. Specialization generates higher profit margins. The specialty of Down To Earth is lawn renovation. It earned us a great reputation in our region. It also opened up other service opportunities.
8. Become a consultant in your specialization. It sets you apart. Our fees start at $95 to see any prospective landscape client. This eliminates people wanting free advice. Once we consult, 95 percent of the time our company lands the job.
9. Write articles based on your expertise. Reprints make great marketing tools. They make you more credible in customers’ eyes.
10. Consider adding other specialized services. This is your hedge against low price bidding. Since many companies just know how to shear, why not offer “technical pruning” and charge higher rates?
11. Now that you have a specialty and consult, why not become a public speaker? This is a natural evolution. Start at local events such as your service club, environmental and/or garden club meetings. As you gain confidence and expertise, offer your knowledge to regional and national groups.
12. Invest in consultants to teach you. This is usually the fastest, most effective and economical way to learn a new service or task. It will cost you upfront but it could end up being the best money you ever spent. Once you’re hired a consultant and worked with them (get references before making the commitment) implement what they suggest.
13. Enlist local retail garden centers and retail supply houses as marketing partners. Will they permit you to leave laminated sales sheets listing your services at these partner retailers, along with our business cards for prospective customers? If you’re a loyal customer and a friend, they may. Send them a small gift of appreciation at Christmas. It works for us.
14. Stay smart. Our new game at work is called “Stump the Foreman.” We compete to gain knowledge, such as learning the plants at different job sites. For example, if any employee stumps the foreman on the name of a plant, he receives a few dollars per plant.
15. Try shift workers. Our shift employees have other jobs as autoworkers, teachers, firemen, etc. These employees are paid well, but we don’t pay them benefits since they have another job. This flex force of dependable shift workers complements our small regular staff. Our employees have an average of 14.2 years of service. Our employees do not miss time and all have valid driver’s licenses.
16. Generous pay raises will not improve poor or average workers’ performance over time. However, a generous and systematic approach to hiring will help you retain good employees. Remember, retraining is costly and unprofitable.
17. Refer … for a commission. We refer other companies’ specialty work and refer suppliers’ products for a commission. For instance, a grading company pays us for our leads if there’s a sale. A custom topsoil company pays us a fee for each truckload. These companies like our arrangement due to our high-end clients that want quality work, service and products. Depending on the service or product, the rate ranges from 3 percent to 7 percent.
18. Be visible. One of our best sources of advertising is our large, white resin billboards on our dump trucks. The look is clean and if neighbors like your work they will call.
19. Downsizing leads to higher profits and flexibility. Actually, the better term to use is “rightsizing.” Labor is your biggest expense. However you do it, match the size of your projects with the most efficient amount of labor.
20. Say “no” to certain jobs. Determine which jobs are profitable and which are not. If they’re not making you money, give them to a competitor.
21. Give customers the “personal touch.” Where possible, write personalized letters and bulletins. Enclose concise handwritten notes in with your invoices. Leave personalized, handwritten memos at sites.
22. Don’t beat your head against the wall. If a market’s price share starts to decline or go flat, make a move. For example, we went from a mix of 50/50 residential/commercial to a mix of 95/5 residential/commercial. We saw it coming when big out-of-state and regional players put the price squeeze on the commercial work in our market.
23. Try networking meetings. In the off-season invite local companies and supply houses to your home for a networking dinner and dessert. Have everybody introduce themselves and give a brief description of their companies. Then agree upon three topics to discuss in three areas of the house and switch rooms often.
24. Purchase at trade shows. Sometimes “show specials” can save you big bucks. The last day of the show is the best time to purchase and transport the equipment back to your shop. Don’t be hesitant to name your price.
25. Build your “network” during the off-season. Schedule meetings of companies and suppliers to meet over breakfast and lunch to talk about common challenges and opportunities. This process pays big dividends but you’ll have to stick with it.
26. Capitalize on competitors’ shortcomings. We ask all new callers why they left their previous company. Four complaints are common: They did not return calls in a timely fashion, technicians weren’t punctual, the crew lacked knowledge or no one on the work crews spoke English.
27. Reference your website. We always invite potential customers to check out our website. If they check the site, we usually get the job.
28. Build upon your image and branding opportunities. Our logo is on our trucks and our uniforms. Since employees have input on the types of clothing and styles we order, they enjoy wearing their latest threads.
29. A team approach is best when contracting. We act as contact and team manager when we bid on projects that require us to work with subcontractors. We incorporate a fee for management, and the subcontractors provide us with discount pricing for their services. As a result, the customer has the best mix for a fair price with a long-term contract.
30. Don’t handle complaints or return calls when you’re tired or had a bad day. I have learned this the hard way. You want to be thinking clearly when you talk with customers, even when they’re unhappy.
