Is Mowing Your Main Revenue Stream?
"It all started with mowing."
That’s the story for so many people in the green industry. As soon as they were tall enough and strong enough to push a mower, many budding landscape contractors began by cutting lawns for neighbors, to earn extra money after school and in the summer.
By the time these “wanna-be” small business owners were in high school, some of them had already built viable enterprises ready for them to step into as adults, while their peers were still wondering what to do with their lives. Some of these businesses later became multimillion-dollar operations. Some companies, especially the larger ones, still derive much of their income from those whirling mower blades.
Mowing opens the door
“Mowing starts a relationship with a customer,” says Terry James, owner of Terry’s Lawn Maintenance in North Hills, California. In the 23 years he’s been in business, he’s started many relationships, and kept them. Like many, he first pushed a mower while in high school, back in his home state of New Jersey. When he moved to California and started his business, his basic service package was mostly mowing, with some planting.
James says that mowing people’s lawns is the icebreaker, if you will. “If they like your work, over time, they begin to have confidence in you. This creates a doorway to other kinds of services, other revenue streams. But you have to have the mowing first to create the other, more profitable work—tree trimming, sprinkler installation and repair, seeding and sodding, planting shrubs and flowers, and hauling.”
He and his two-man crew service approximately 120 clients, both residential and commercial. He estimates that 65 to 70 percent of his company’s revenue comes from mowing.
Andrew Ziehler began his business, Ziehler Lawn and Tree Care, Centerville, Ohio, in 1999, while still in high school. He started not with mowing, but with mulch. “We’d have it delivered at someone’s house, then a couple of friends and I would go clean up the beds and put it down. Eventually, we started mowing for those customers.”
He adds, “Our clients love our customer service and the quality of our lawn care. They like the programs we provide, and they like dealing with our company, so they want more services from us. There’s money to be made in mowing.” His company today has 16 employees and yearly turns over $1,000,000- plus. Mowing makes up 60 percent of the maintenance division’s revenue.
These two companies are relatively small. But, as we said, some very large companies began with mowing, and mowing still provides a major part of their revenue streams.
The Pattie Group, Inc., headquartered in Novelty, Ohio, began in 1963, when founder and CEO Steve Pattie was eleven. He and a sevenyear-old partner started mowing lawns during the hot Cleveland Heights summers. Within five years, the pair had driven away all of their professional competition, and officially incorporated as Pattie’s Landscaping, Inc. (later renamed The Pattie Group, Inc.). Last year, the company grossed more than eight million dollars.
“Mowing is extremely important, because a lot of clients in our market make a decision about a provider based upon cutting,” says Pattie Group garden and property manager Hillary Henry. “Quality, price, and consistency of performance; all of these things weigh into that decision.” She agrees that mowing is the inroad to gaining a relationship with the client. “It provides us with an opportunity to upsell higher margin services, such as lawn care, shrub care and irrigation management.”
And even beyond. “We’ll send somebody in our design/build division a lead, saying ‘These clients really need to renovate the front of their house; what do you think?’” says Henry. “Then someone from that division will go out and meet with the clients.”
Mowing has been, and continues to be, central to the success of Gachina Landscape Management Services in Menlo Park, California. “Maintenance is our primary business,” says John Gachina, president and CEO. “Seventy percent of it is contract maintenance; that includes mowing, grooming, weeding, fertilizing and pruning. The other 30 percent is enhancements or irrigation; in other words, extra work. But that extra work comes from those maintenance customers.”
The company’s location, in the heart of the Silicon Valley, gives it plenty of opportunity. It maintains multifamily housing developments, city parks, large corporate campuses, shopping centers, cemeteries and more. “There’s a lot of turf to mow out here,” says Gachina, “because every place has lawns. Mowing is a huge part of what we are.” The company also maintains some of the high-end estates owned by the Valley’s computer hardware and software moguls.
There are three big challenges to making mowing pay: equipment, labor, and competition, according to Ziehler. “Mowing is a labor- and equipment-intensive service. You have a big investment in those commercial mowers. It takes a lot of time to maintain them well. But if you don’t, then you’re always dealing with repairs. It’s a difficult thing.”
“Profitability-wise, mowing is one of the lowest-margin services that we offer. It’s also the most consumer price-sensitive.” Ziehler says that in the market where he works, there are a number of competitors. Some of them are very big companies, which deliberately under-price their mowing services. “Especially with the economy and everything, there are a lot of companies that are going for the lowest price. It’s hard for the consumer to gauge the value they might get from a higher-priced company like mine. So, it’s a difficult game to play.”
Cathy Blaeser owns a small company, Green Thumb-Brown Boots Lawnscape in Batavia, Illinois. She faces the same problem in her market, where some very large companies are able to charge as little as $17 per mow. Ziehler says that he “couldn’t even afford to show up for $17.” Neither can Blaeser.
But volume can make up for a lot.
Ziehler adds that when he really does the math on a homeowner’s association (HOA) contract, the priceper-lawn can average as low as $15.
“But since we’re mowing anywhere from 40 to 2,000 square feet of turf, or 50 lawns, as essentially one big piece of land, it works out.”
Says Henry, “You have to look at mowing as a vehicle to building other areas of your business. You need enough business acuity to understand that cutting may be a lower-margin service in comparison to hand-pruning, bed-edging or planting flowers, but it’s a vehicle to selling those higher-margin services.”
“We kind of go in a different direction,” Ziehler continues. “We pretty much mandate that our customers take our lawn care program, and then they’re able to receive mowing. It’s kind of backwards. We don’t want to deal with an extreme amount of mowing, and not get anything else out of it. So, we make sure we sell the service we’re building our business around, which is fertilization, plant and tree health care.”
Ziehler says his business began with “the typical progression, doing everything and anything, with no rhyme, reason, or plan. Then I learned that that wasn’t going to work real well. At that point, we got busy at building a business, getting organized, and doing the right things at the right time. That’s when we made a big transition to the lawn and tree care side of things, and got really focused in that direction.”
To take your business to the next level, “the first thing is to establish open communications and accessibility with a client; ‘touching’ them, so to speak,” says Henry. “If we get a lead where someone has said, ‘I want a price for cutting,’ we make it a priority to meet with the person onsite.”
Henry says this ‘face time’ with a new client is absolutely vital. Why? “A face-to-face meeting is entirely different from an email barrage, a text message, or even a conversation on the phone. You need to find out what somebody’s ‘hot buttons’ are.” She cites this example. “Say a customer doesn’t want anyone on their property on Wednesdays. You may not realize that, and schedule your crew in there on that day. There’s little nuances like that you can only pick up in a face-to-face meeting.”
As every business owner knows, finding and keeping good people is never easy. Ziehler says this has been an ongoing struggle for him. “It’s finding a person who will show up to work every day, work hard and take pride in their work, and do it day after day after day. We feel we pay a very fair wage, on the upper end, but it’s still extremely difficult. It affects your ability to grow, because you can’t find the people.”
Of course, employee retention is tougher in a seasonal business. You may have a great crew that summer, but lose them over the winter. “Which is the opposite of what the consumer wants,” says Ziehler. “They want to see the same person on the property every week, year after year. Finding ways to do that adds value. It will help you be successful.” Quality control It’s great to get a lot of mowing jobs, but not so many that you lose control of the process. Keeping clients satisfied has a direct effect on profitability. They take this very seriously at The Pattie Group. Quality control starts on an employee’s very first day.
“We have a very comprehensive training program in place,” says Henry. “We start people who are new to the industry at a pretty rudimentary level of performance, as assistants.” To move up in level, employees have to pass both in-house tests and tests for state and national certification. “Every employee in the company has to have 45 hours of training per year. That affects yearend bonuses and incentives.”
The Pattie Group’s philosophy is to exceed customer expectations. Every time a crew finishes a property, the crew leader writes a “leavebehind” note, letting the owner know exactly what was done that day. If there are garbage cans at the curb, they get hauled back to the house. Newspapers get put on the front porch. “We do little things; for example, if we see the mailman, we flag him down and take the mail up to the door.”
Find a gap and fill it
When John Gachina started his company 25 years ago, it was during the Silicon Valley’s big building boom. “A lot of landscape companies were turning up their noses at HOAs,” he says. People were saying, ‘HOAs aren’t professional; I don’t want to deal with a bunch of angry homeowners or housewives.’” “Some of the companies that I compete against now had been around quite awhile when I started,” says Gachina. “They were saying, ‘We don’t need that stuff.’ But I was the new kid on the block, trying to build a business, so I was saying, ‘Well, I need anything I can get.’” In fact, Gachina’s first big contract was with an HOA. “I was happy to get it,” he says. “Of course, working with HOAs requires good communication with boards and committees.
Now, HOAs make up about 30 to 40 percent of our business.”
up business others cast aside was a winning strategy that’s still
paying off. Gachina Landscape Management Services grossed more than $22
million last year.
The company’s four San Francisco Bay Area branches employ more than 350 people in the peak season, and its fleet includes approximately 150 trucks and some 400 commercial mowers.
Maybe there’s maintenance work in your area that’s waiting for someone to do it. Is that someone you?
Recession-proofing through mowing
Making mowing and maintenance a part of your business can help recession-proof it. When the economy took a nosedive in 2008, many companies with a strong emphasis on maintenance survived, where some more design/build-oriented companies didn’t. When money gets tight, new construction contracts get canceled, but maintenance contracts tend to stay put.
As Gachina points out, even in lean times, “Properties still have to be taken care of, and lawns still have to be mowed.” And although his company did lose a little market share during the past five years, “We came through the recession really strong. We had to tighten our belt, but everybody did.”
“One of the things mowing has always done for us is provide a good cash flow,” says Ziehler. “It’s a service that happens week after week, so when you sell a job, you know what you’re going to need as far as crew levels, tools and equipment for the remainder of the year.
And it also tends to renew pretty well. Those are the two best things that we get out of mowing. It’s continual cash coming in, and it’s a renewable service, so it goes on and on.”
Mowing and maintenance may not be the sexiest-sounding business; it can, at times, suffer from a bit of an image problem. But is there anything more alluring than a six, seven, or eight-figure income? This side of the green business can be very green, indeed.
“A lot of people in college want to be in design,” says Gachina. “It just sounds like the place to be. Then they find out that landscape architecture, like construction, is not recession-proof. Some landscape architecture firms during this last recession went from 30 people down to five.”
“We do a lot of recruiting, like at PLANET’s Student Career Days,” he adds. “We’ll get some folks there who’ll say, ‘Oh, I don’t want to do maintenance, only dummies do that.’ Well, I’ll tell them, this little dummy is doing quite well.”