Expand Your Core Business: Hydroseeding Can Be A Profitable Nich
|By LOREN MORRIS III|
Are you working more and enjoying it less? Do you find yourself looking over your shoulder to see if the competition is creeping up from behind? What with the general day-to-day cost of doing business, along with the potential loss of revenue to your competitors, contractors need to find new ways to distinguish themselves from the rest of the pack. One way to achieve that is by offering your customers new lines of service.
The list of new services that are available is always changing and growing. Choosing the right fit for your existing business is essential for making a profit. It’s important to understand the underlying principles behind the need to continually add services to your business offerings, along with the benefits to be derived. Knowing what to sell and when to sell it is one part of the puzzle; knowing who to sell to is more obvious.
The easiest person to market any new service to is the customer you’re already servicing. How many times have your clients asked if you do paving, landscape lighting, or other landscape improvements that you don’t yet offer? Whatever service you can’t provide them is a service they’ll get elsewhere. Why would you want to send them away if you don’t have to?
Most business is based on personal relationships; when a relationship based on trust, dependability and professionalism is cultivated, there is an excellent opportunity to offer and sell more products and services. The customers who currently trust you are also the strong referral base from which new business can be built. Using that base will greatly reduce the high cost of advertising and marketing your new service.
There are lots of new business opportunities to choose from. Paying attention to what your customers are asking for will give you some idea of the vacuum that needs to be filled. Of all the services you can make available, hydroseeding has one of the lowest start-up costs and highest profit margins. But before we get into the nuts and bolts of what hydroseeding entails, let’s take a closer look at how our industry is changing.
Today’s green industry is transforming from its “Mom and Pop” roots into a huge multi-billion dollar economic force. That means you have an opportunity to take advantage of new trends and use new products that are specifically designed to help get the job done more efficiently. Paying attention to both business and consumer trends will also open the doors to new opportunities that can help you expand your core business.
For example, consumer buying trends are now creating demands for products and services, such as landscape lighting, which offer new business niches for the landscape contractor. Once you grasp the dynamics of the business cycle, you can place yourself in a position to take advantage of new opportunities as they reach the marketplace.
You only have to go back a few years to see how far landscape lighting has come. Water gardening and other landscape specialty products were once only of interest to the designer and specifier market. Today, landscape specialty products are affordable and more in demand by the typical homeowner.
To seize opportunities when they present themselves, you must understand the ebb and flow of the typical business cycle. In the beginning stages, there is a limited marketplace, little competition and much higher profitability. Many successful landscape professionals started out with just a truck and some basic landscape equipment, and soon discovered a growing market for lawn and landscape maintenance. They also found that as their local markets matured, competition heated up and profit margins shrunk.
To grow and stay successful, many landscape companies had to offer additional services and products to their core business. Landscape contractors started to install brick pavers; lawn maintenance contractors added irrigation services; and the irrigation contractor began to offer landscape lighting. They found that they were leaving a lot of money on the table by not providing these add-on services. Providing these services helped distinguished them from the competition, while allowing them to prosper from new areas of profitability.
Contractors who offer a wider range of products and services to their established customer base can anticipate new business throughout the year, and lower the day-to-day cost of doing business. Deciding on what new products or services to offer your customers requires the consideration of several factors.
When defining areas for new growth, you need to look at the potential size, as well as the current state, of the market. If the market is large and saturated, you will find the classic business cycle qualities of heavy competition, high labor costs, and slim profits. Most contractors we spoke with say they would rather be on the upswing of a rapidly growing and still-profitable niche, than the downside of a large business that has high costs and low margins.
That’s why adding a growth business like hydroseeding to your core landscape business can help add profits to your bottom line. Hydroseeding has been described as the best kept secret of the landscape industry. First developed in the 1950s, hydroseeding has exploded into a profitable operation for the landscape contractor, as homeowners and builders slowly become aware of its value.
Hydroseeding, or hydromulching, is a grass planting process that is fast, efficient, and very economical. Hydroseeding is usually more effective than traditional seeding, and much more economical than conventional sod.
The process begins by mixing mulch, seed, fertilizer, and water into the tank of a hydroseeding machine. The slurry is then sprayed onto the ground, providing the proper environment to promote seed germination.
With the production of newer and smaller machines, contractors have a much
easier time breaking into the hydroseeding business without investing a
lot of money into the venture. This makes hydroseeding more accessible as
a side job or an added service to a landscape business. (See related article).
Whatever area of the green industry you serve today, take a look at your
next job and evaluate what other services you could be offering your customers.
Examine the need for the service, along with its start-up costs and profitability;
then ask yourself, is there a future in hydroseeding for me?