STEPS TO A THRIVING LAWN-CARE BUSINESS
Success depends on several variables. Whether you want to start a lawn-care company or improve your present lawn-care business, certain guidelines will help you achieve success.
1 Research your market and define your business
The name of the game for any business is finding customers, signing them up and maintaining a long-term relationship with them. Maybe you just need a few more customers to make the jump to a full-time lawn-care business. Or, maybe you want to expand your company or add customers to cover attrition. Either way, you need to identify customers that best match your business. To do that, ask (and find answers to) questions like these:
What kinds of weekly, monthly and seasonal services are needed in your area?
What services do your competitors offer that you don't?
What services do you offer or want to offer that your competitors don't?
What is the pricing range and revenue potential for those services?
How many customers in your area are candidates for your services?
How many customers do you have, and what is their size and location?
Will your competitors go after your current or potential customers?
Do your present customers have the potential to increase your level of services?
Will your targeted customers need different services in the future?
How will you attract new customers?
Some businesses “shop” their competition to determine the pricing in their market and other pertinent information. You can also call on professional trade organizations for help in translating your area's demographic information into potential revenue projections.
2 Match equipment to your services and customers
You've defined your business in terms of the services needed in your area and your revenue goals. The next step is to match those goals, services and capabilities with the right mix and number of customers, schedules, equipment and personnel requirements.
Finding the combination of all of those variables that will best help you to reach your revenue goal is not easy, but it is crucial. Bob Connell, owner of Connell's Lawn Service in Newark, Del., said: “Having the wrong equipment can kill a business. As soon as we chose our equipment based on what we needed for our customers — maneuverability, ability to trim close and a quality cut — our business immediately became more efficient and profitable. The right mowers cost a little more, but the investment has been returned many times over.”
3 Choose between ‘grounds-maintenance system’ or separate equipment
It's clear that if a piece of equipment costs a little more but is the right choice for your needs, it can yield revenue that more than offsets the additional investment. The same principle applies to buying multi-purpose vs. dedicated equipment.
If your customers are inclined to want “one-stop shopping,” and you want to provide it, then you may need additional specialized equipment for each service you want to offer. Obviously, this will depend on the composition of your clients and how often you perform various services. However, before you buy a stand-alone snow thrower, a separate dethatcher, an aerator or other specialized equipment, you should compare stand-alone equipment with specialized “grounds-maintenance” systems that use the basic power unit to operate a variety of attachments, including mower decks.
Calculate your return on investment by subtracting the initial cost and upkeep of a stand-alone item from its earning potential. Then compare it to the cost of an equivalent system attachment and its earning potential. Whatever your choice, your decision should be based on the return you will get on your investment.
For example, if you spend an additional $4,000 or so for a unit that can accept attachments, this cost may be offset because each attachment will likely cost far less than the initial cost of most stand-alone equipment. Because the power unit central to the system operates each attachment, the system approach eliminates the cost and hassle of maintaining the separate engines in stand-alone specialized equipment. On the other hand, multipurpose equipment may involve swapping attachments and put more wear on a single engine.
It goes back to calculating earning potential. If your customers have you performing a particular service frequently, the earning potential of a dedicated piece of equipment may be quite high, justifying its cost. Conversely, tasks performed less frequently, or perhaps only seasonally, might never pay for a dedicated unit, but would be profitable with a less expensive attachment on a “system.”
4 Present customers, strategic partners offer growth
Your present customers are your best bet for increased revenue because they are already sold on your services. Most customers prefer to receive all services from one company, so carefully study each customer and what additional services you can offer. You can also reward present customers with discounts or other benefits when a friend becomes a new customer.
Consider forming strategic alliances with garden centers, retail stores and other places that sell to the public. Often, they want to offer their customers some help with the seed they just bought, and would welcome a partnership that allowed them to offer this service.
5 Your advertising must target the right customers
If you decide to advertise, be sure to use the best method to attract the kinds of customers you wish to target. If your business is thriving in only one part of town and you would prefer not to have your crews spread out geographically, then you may want to target specific neighborhoods with door hangers and leaflets.
If you are large enough to have teams in place throughout your area and they are only at 60 to 80 percent of work capacity, radio advertising might be an ideal way to fill up your company's potential for revenue. But “test the waters” first and see what works best. See if your present customers can describe what media they use most, so you will know where to best target your resources.
6 Invest in management software programs
Today, a wide selection of landscape business software programs is available to help you run your business more efficiently. Whether you are a one-person maintenance operation or a full-service installation company with multiple crews, the right software program can boost efficiency in all areas of your business.
Software programs can make your life easier through scheduling the work, billing, collecting and communicating with customers. Some will even print daily route sheets organized in geographical order and can be programmed to include detailed notes about tasks at each location, special instructions from the customer and a detailed list of what equipment the crew will need for the day.
Using a software program can also build consistency into the bidding process. It allows you to avoid many traditional problems that result in underbidding. Labor, overhead, equipment, materials and all the other hidden variables can be included and give you a more accurate bid every time. Such a program also allows you to track your bids and compare them against the actual job so you can continually fine-tune the process.
7 Hire good people and keep them
As the green industry continues to grow, it is getting more difficult to find and keep good help. However, there are intelligent, hard-working people out there. Your challenge is to attract them and keep them. Referrals from present employees are best. They are the lowest turnover category for new hires. Ask your present employees for help, and reward positive results.
Once on the team, share your business goals and philosophy with each team member. Ask team members specific questions about how things can be done better. This will demonstrate that you feel each person is important to the company and assure that they buy into your company's mission.
Providing uniforms for your team members will help project a professional image and reinforce the perceived value of your services. Don't be afraid to pay a little more in wages than other companies and your investment will pay off in reduced employee turnover and heightened loyalty. Cash rewards — even small ones — can be important to some, while a day off may mean far more than money to others. Praise employees' accomplishments but make sure you are sincere in your praise.
Providing the right equipment for the job can have a tremendous effect on productivity. A rider versus a walk-behind might mean the difference between someone who will work hard to attract new business and a person who is just too tired to care. Motivated people who care about their work and the company are careful to follow factory maintenance schedules and keep the machines in top operating condition. Keeping equipment clean and well-maintained isn't just a way to maximize productivity and get more return on your investment. It projects an image of professionalism that further enhances the perceived value of your services.
8 Retire a mower when it's time
It's wise to get rid of a piece of equipment when it's no longer profitable to keep it. The trick is to know when you have crossed over that line. Many of us have a tendency to look at the purchase price or monthly payment of a new mower and then decide that the cost and hassle of repairing an old mower is worth keeping it around. But this can be deceptive. Of course, the repair bills for the old mower may be (or may not be!) less than the monthly payments of a new mower, but this is an incomplete picture. Down time is extremely expensive. A new mower saves you a great deal in this regard.
Also, don't forget that mowers are becoming more efficient all the time. An old mower, even in top condition, may be less productive than a newer model with better design. Purchasing a new mower may be an opportunity to upgrade. Thus, increased productivity is yet another factor to balance against the supposed savings of keeping an old mower around.
Whatever aspirations you set for your company, or however you define success, keeping those goals in mind while making your decisions about equipment, personnel and maintenance will allow you to achieve them. Just remember that the marketplace is constantly changing, and you must be able to adapt to those changes. If you continually anticipate change, and choose equipment and methods that are flexible enough to allow you to adjust to change, you and your lawn-care team will thrive.
Carl Williams is a freelance writer based in Wichita, Kan.
THE “RIGHT” EQUIPMENT = BEST RETURN ON INVESTMENT
Let's look at what kind of equipment investment-to-productivity you might expect. For the purposes of this calculation, we'll assume a five-day week, an eight-hour day and a $40 per acre charge. These are only hypothetical figures to demonstrate the calculations. However, you can perform similar calculations based on production estimates provided by manufacturers of each mower you're considering. Production figures (square feet per hour) are derived simply by multiplying top mowing speed with width of cut.
Start with the following two examples, which could be similar to a decision you've actually faced: a slightly more expensive mower with slightly higher production. How do you decide if the extra money is worth paying?
- A $6,000 unit that can:
Mow 38,000 square feet per hour;
Cut 35 acres per week × $40 per acre;
Earn about $1,400 per week, or about $5,600 per month.
- A $7,000 unit that can:
Mow about 46,000 square feet per hour;
Cut 42.5 acres per week × $40 per acre;
Earn about $1,700 per week or about $6,800 per month.
If you charge $40 per acre, the walk-behind will earn about $1,400 per week and the stand-on mower about $1,700 per week. That's $1,200 more earnings per month or $9,600 more income during an eight-month mowing season. That's a respectable return on the $1,000 price difference between the walk-behind and the stand-on mower. Worth the money, right? As a bonus, the stand-on is likely to be less tiring to the operator. So the less expensive mower was not the best value based on productivity.
Can we apply the same logic to see if the extra $2,000 required to buy a $10,000 zero-radius mower instead of an $8,000 tractor riding mower is worth the investment? Yes and no.
In theory, an $8,000 52-inch commercial riding mower with a steering wheel and a $10,000 52-inch zero-radius mower both traveling at 4.5 mph can cut about the same amount of acreage in open ground. (Zero-turn mowers are typically able to mow much faster than this but we'll use similar speeds in this calculation to make the point.)
This information, by itself, would suggest the less expensive mower is the better choice. But is that a realistic assessment? It depends on the kind of turf you need to mow, but for many commercial cutters, the answer is no.
We know instinctively that just because a riding mower is rated as capable of cutting 2 acres an hour in open fields, that doesn't automatically translate into a similar level of production in actual commercial use. That's especially true if most of your customers have a normal assortment of flower beds, shrubs, trees and other obstacles, which will be the case for nearly all residential and many commercial accounts.
It is generally accepted that a zero-radius mower can complete cutting a similar area with obstacles approximately 40-percent faster than a similar-size tractor. With this number, we can measure the impact maneuverability has on determining whether a zero-radius mower is worth the extra $2,000 investment.
The difference in earning power per eight-month season: $85,860 - $51,200 = $34,660. Even making broad adjustments for any errors we have made in our basic assumptions, this is still a significant difference and easily justifies the extra investment.
Factors other than raw productivity affect your bottom line, including dependability, serviceability, operator comfort and so on. Depending on your circumstances, you may wish to discuss leasing the equipment you need with your dealer. Whatever your choice of mower, the decision should be made based on revenue delivered to your bottom line.
Want to use this article? Click here for options!
© 2016 Penton Media Inc.