Growing Your Maintenance Business
Over the years, you lose some of your clients. Some move to another town or city, some go out of business, some might not be pleased with your work, and others may just be shopping for a better price. Whatever the reason, it is a given that you will lose clients over time. For that reason alone you have to find new clients.
There are tremendous opportunities to grow your business, especially with the expansion of new office parks, new shopping areas, home developments and condominiums. So how do you start?
As Dale Micetic, president of Grounds Control, Austin, Texas, says Theres no substitute for doing what you say youre going to and when you say youll do it. Those contented customers then become a landscape contractors sales references.
Satisfied customers are probably your best source for new business. Mike Wheat, owner of Wheats Lawn and Custom Landscape Inc., reports that 70% of our new business comes from satisfied customers referrals. Regardless, the Vienna, Virginia-based company buys advertising in newspapers and phone books and does marketing by mail, the latter being very low return, but you just deal with that. The trade-off: it serves to maintain his firms profile in his service areas.
Owen E. Dell, County Landscape & Design of Santa Barbara, California, began in the trade with a friend and a $100 truck, driving around looking for piles of trash to haul away and yards that looked like they could use a landscape contractor. In his early days he circulated flyers, did home shows and bought big yellow page ads. His best advice to others, he says, is building a good reputation to get the positive word-of-mouth referrals that promote your business.
Word-of-mouth works the best for Joe Markell, owner of Sunrise Lawn/Landscaping Services, Herndon, Virginia. Concentrating in the residential maintenance markets, Markell says, Appealing to groups of homeowners is very important to our business. When maintenance crews supply a quality service, it makes it easier to gain the neighbors as customers. The greater amount of customers a crew has in close proximity, the less time is spent driving to the job. Ideally, a crew can work many homes and never have to move the truck--a benefit of good word-of-mouth among neighbors.
Maintenance provides steady growth for Powers Landscaping & Maintenance in Raleigh, North Carolina. Frank Powers suggests that landscape contractors find a niche theyre good at and pursue that. His company focuses on residential maintenance because it perpetuates itself. I dont have to worry about next week.
Once you go through a couple of recessions, Rich Angelo of Stay Green says, you learn word-of-mouth can only carry you so far. Now his Valencia, California company is more proactive, making use of its sales staff. When he first started out, he used newspaper advertising to generate leads for residential business, a practice he later discontinued.
Doing community service is a good way of attracting new clients, Dell says. You can install a landscape at a school, which is just a good thing to do, something you can feel good about. And sooner or later, someone will remember you from that job and call.
In addition to adding new clients, another way of growing your business is by adding additional services to your menu. As Markells business has grown over the years, he has expanded into snowblowing and a little excavation a sideline that got larger. He has separated that part of the business, now run by his brother. They still provide excavation but havent gone too far beyond the basics in their services. Nothing too outside the box, he says.
Micetic says that Grounds Control succeeds by identifying the procedures they do well and reproducing them, whether they are internal business operations or the services the company provides. Angelo says his thinking is along the same line; they began as a residential maintenance company, then expanding into commercial and municipal maintenance. They have added tree care and plant health care services, all supporting our maintenance-related business.
Expanding the company allows Wheat to provide better customer service, and provide that faster. As a big company, we can move faster. We have more resources to respond to clients needs and scheduling conflicts.
Wheat has learned that the only way he could grow and expand his business was to delegate. When he feels pressure, he knows hes not delegating effectively. He built his company to a $10 million business, with a seasonal peak of about 170 employees.
At that size, its a juggle to remain focused on providing the highest level of client service and the best production possible, according to Wheat. When you do, thats sustainable growth. When the company is doing extensive marketing, it can exceed their ability to provide quality customer service. That is effort going in one end and out the other, like a glass with a hole in it, he says.
Growth and expansion was also vital when Micetic was starting out in business in Arizona. He began installing sprinklers in high school, then graduated into sprinkler repair. By the time he graduated college with a biology degree, he saw his best path as his current path. Ill just keep doing this, he decided at the time. Five years later, the job was exceeding expectations. He expanded into landscape installation, then landscape maintenance, because Wed build a landscape and when the maintenance fell down, we got the black eye, Micetic says. His company has since been purchased by Grounds Control.
His growth was also driven by a changing economy. During an economic slowdown in the late 70s, sprinklers were one-third of the cost of a landscape, he says. He went to capture the other two-thirds of that revenue. He advises others to take the same kind of look at the economic landscape around them. Ask yourself if there are any niches you can fill, Micetic says, urging business operators to take advantage where they can. Can you pick up where others drop off and hope you can do it better?
People should ask themselves questions like, How do I capture other portions of the business? There are many possibilities: hardscaping, water features, lighting. If the market was retracting, what could you do to continue to expand your revenue?
Another example of an unforeseen benefit was Dells idea to sell a do-it-yourself landscaping kit. It appealed to his more budget-conscious customers. Hed work with the homeowner in planning the project, then deliver the sod, irrigation equipment, plants and fertilizer to the home. Hed set them up to handle the installation and maintenance themselves. By about the third week, when they saw a years worth of work on the weekends before this thing got going, and chiropractor bills looming, theyd be calling back to ask how much it would cost for me to do the work.
Networking has provided Markell with access to experienced advice on growing his 19-year-old landscaping business. Much of that wisdom has emerged through his membership in the Professional Landcare Network (PLANET); he calls it one of the best things going. Hes learned to recognize the some of the triggers that indicate its time to grow. Markell discovered that when youre up to a million dollars, its time to hire a full-time mechanic. At $3 million, its probably time to hire another, he said.
In Dells Southern California market, he has explored niches of sustainable horticulture, fire-conscious landscaping firescaping, he calls it and xeriscaping. Micetic says he imagines the next niche for landscape contractor to be soil erosion control, with silt fencing installations and topsoil retention. Theres still room for growth in lighting projects, he says. Markell predicts his company will grow further through partnering with an organic fertilizer company.
Many industry professionals warn of the pitfalls of growing too large, or too fast. I see a lot of people over-invest in equipment and get into trouble, says Powers. At Sunrise, Markell says it takes money to grow, for equipment and trucks. And the bigger you grow, the better systems you need in place for issues like billing and payroll, he says.
Markell says hes careful not to expand beyond what he knows he can handle, striving not to make promises I cant keep. Describing himself as a hands-on guy, he misses that aspect of the job a little. But a different challenge as you get older is a good thing. He says hes now able to see broader business issues, with the challenge being to maintain the quality of the service his company provides.
Micetic provides an example of challenge: We had partnered with some homebuilders, and ended up doing about 3,000 front yards. We took on more work than we could handle. After two years, we looked at it, and found that that $3 million in work cost us $3 million to do. The money we made on the job ended up going into another job.
Micetics multi-state business faces problems unique to having wide-spread offices. The challenge there includes integrating different operating habits between three states, identifying what works in Phoenix and making it work in Austin, and visa versa. Once a sprinkler installer and now an organizational guy, he works to get good people and let them do their jobs.
Wheat says the paradox of being a complex business is keeping the mission simple, reinforcing the companys core values of providing quality customer service and building strong relationships. They instituted leadership development classes to continue the culture of the companys mission.
Angelo says he learned the lesson of getting full of ones self. A danger for an entrepreneur is to think that because you do one thing well that you can do another thing well. He urges others to wait until you have the management skills before breaking out from your core services or hire people to run them. Angelo says, I blew a lot of money trying to do other things. As you get older, you learn theres only so much you can do yourself.
Dell looked at the growth of his business, and then he looked back. He had grown his business to a point that almost pushed him over the top. One day he came in and told everybody, I just cant do this anymore. He warns about over-growing ones business. Being large wasnt for him, and its not for everyone.
A newcomer to the green industry should be aware of what they really want, says Dell. I see people who have dreams of an empire with fleets of trucks. But once you get past two, three or four employees, and again beyond 15 or 20, it takes different management skills and different capitalization for the business. You become a businessman and not a horticulturalist. You can wake up one day and realize that its been 10 years since you touched the earth.
If youre swim with the sharks, youd better have a good set of teeth, he writes.