Profitable Mowing: Staying a Cut Above
|By ELIZABETH LEXAU|
From the outside it looks simple. You mow a few lawns and collect money. You earn enough to buy more equipment and hire others. Soon your clientele seems to be growing as quickly as the grass you’re cutting.
But successful insiders know it isn’t simple. Sometimes a mowing operation that seems to be booming isn’t actually making a decent profit. Soon equipment breaks down and there’s no money to replace it. Funds become tight and raises are postponed. Eventually, good employees move on, quality suffers and customers walk. Profitable mowing takes more than a large customer base. It takes strategizing for maximum efficiency, careful financial planning, and understanding of costs. It requires clear communication and relationship building. Most of all it involves long-term thinking and a professional approach to business management.
A professional edge
According to James Ormond of Barringer and Barringer Landscape Services, Charlotte, North Carolina, a high level of professionalism is one of the hallmarks of a profitable company. Ormond entered the landscape maintenance field after his five-year stint in the banking industry left him unfulfilled. “I believe there’s a big difference between happiness and fulfillment,” says Ormond. “Although I enjoyed the banking industry and the opportunities before me, I passed on the ‘gold watch’ and followed my heart.”
He joined business partner John Barringer’s ten-year-old design/ build firm and created the company’s thriving management division from scratch. “We started with 12 customers at the end of our first season, all residential,” says Ormond. “Today, we service well over 300 clients each week with 15 to 20 employees, depending on the season.”
Though landscape maintenance is a far cry from his first career, Ormond’s years in banking weren’t wasted. “Coming from corporate America, I saw the benefit of professionalism,” says Ormond. “From my early vantage point, I could tell that this is what our industry lacked most. So I went full bore to differentiate my business from the ‘mow/blow/go’ competition. Formal contracts, starched shirts, clean trucks, strong communication and follow-up—it worked then and still does today.”
A big component of professionalism and profitability involves knowing yourself and your capabilities, according to Tim Cromley, marketing manager for Walker Mowers, Fort Collins, Colorado. “A lot of contractors make the mistake of not knowing who they are. They are so intent on getting business; they don’t know how to say no to anyone.” Contractors can get into trouble when they take extra jobs they aren’t prepared for. But this can lead to more requests for unfamiliar work, requiring additional training and labor. This eats into profits.
“Don’t be afraid to say no,” says Eric Storck, president of Blade Runners, Fairfax Virginia. “Be selective in what you’re doing and do it well. A new job might require training for a task you might not be performing very often. If it won’t lead to long-term, reproducible events, it may not be worth the time.”
To fill in gaps when customers ask you to perform tasks outside your specialty, develop a network of other contractors. “You and the other companies can feed off of each other,” says Cromley. “You can tell your customer, ‘I don’t offer that service, but I can connect you with someone who does.’ This way, you move from being a ‘jack of all trades’ to a real professional at what you do.”
Knowing how your own skills fit within your company is just as important as knowing your company’s capabilities. As an owner or manager, it’s sometimes easy to think we have all the answers. But those who recognize good skills and delegate appropriately often reap profits more quickly.
“We grew pretty quickly in the first years, and I was slow to step to the side,” says Ormond. “Two things came along that helped manage our growth. One, we hired a consultant/comptroller who works with us a half-day per week. He quickly got the ‘ox out of the ditch’ and helped me better manage the labor numbers. The second was back surgery. This was a blessing in disguise. I was forced to sit (or rather lay) on the sidelines. The results were astounding. I was unintentionally holding my people back from their full potential.”
One of the biggest challenges to profitable mowing is estimating true costs and knowing how to bid accordingly.
“The most important aspect of profitability is doing a correct estimate in the first place,” says Christin Bryk, designer and sales representative for Green Day Landscape in Clackamas, Oregon. “The main mistake is underbidding the job and not taking into consideration the cost of maintenance of trucks and equipment and gas. Then, when something happens, the money isn’t there to fix the problems that arise from wear and tear.”
Technology can help. “Early on, get some industry-related computer software,” says Storck. “There are a lot of great products out there. The important thing is not to wait.”
Software can help measure your jobs, track your labor, and analyze productivity. Storck says, “It’s all about labor in the lawn care industry. You have to arrive at how many labor hours it takes. This is impossible if you don’t measure your time at each site. This is absolutely the first building block to having a profitable business, yet if you look at companies under five years old, you’ll find that about 80% don’t do it.”
Ormond agrees. “So many companies have no idea what their true costs are and therefore have no idea how much to charge to cover costs, let alone, make a profit. I know too many companies that rely on a yellow legal pad or a dry erase board to ‘track’ their work. Big mistake. As one farmer who sold watermelons once said, ‘I’m losing five cents per melon, but I’m making it up in volume.’ WRONG!”
Experience counts. “The most important factor is experience and keeping records of your time and material cost for each client,” says Bryk. “If you’ve worked for another company, you’ll have a better idea of pricing and the time that it takes to get the job done.”
Poor scheduling is another common profit eater. “It’s very important to consolidate work,” says Eric Bernsee of Dixie Chopper, Coatesville, Indiana. “The biggest waste of time and money is doing a job on one side of town and then driving to another on the other side. You’re wasting a lot of time between every job.”
Roy Dust, product specialist with Ferris Industries, Munnsville, New York, agrees. “It surprises me that you still see so many contractors cross-towning. We call this ‘windshield time.’ It’s totally unproductive, not to mention the cost of gas. A lot of guys will go out and measure a job but won’t look at how a property fits into their system. You need to know the costs of getting to the property. That’s part of your overhead.”
Dust points out that there are easy fixes. “For example, if a customer likes to see his lawn cut on Friday, but you’re in their area on Thursday, give him an incentive to follow your schedule.” If you have a lone customer in a geographic area, try to attract more to build a critical mass. “New customers offer great marketing opportunities,” says Dust.
“If you take on a customer in an area you haven’t worked in for awhile, ask them to refer you to others.” Some contractors even offer incentives to customers who refer others in their neighborhood. Spending a little money now to build volume within a particular geographic area can save big bucks later, in weekly time and fuel costs.
Having the right equipment for the job is another essential. “Look for speed, quality, and reliability,” says Bernsee. “The more you can mow per day without breaking down, the more profitable you can be.”
But, as he points out, large size and high speed won’t increase profits if the mower isn’t well suited to the site. “If you have a small yard with a 36" gate and a 72" mower, there you sit with a monster mower that can’t get into the yard. You have to weigh whether you’re going to pass on that job or invest in additional equipment.”
As Cromley points out, equipment decisions reflect the need for contractors to establish their company focus. Will you concentrate on customers who want a more finished look or customers who just need their grass cut? This will make a difference in the equipment you choose and the types of customers that will be profitable with that equipment. “Put your equipment where it belongs. Each has its place but many make the mistake of crossing it over into some place it doesn’t belong.”
Ruthanne Stucky, marketing director for The Grasshopper Company, Moundsridge, Kansas, emphasizes the importance of maintenance when choosing mowing equipment. “By choosing a mower that is simple and easy to maintain, the routine maintenance that keeps you on schedule is much more likely to be done.”
For some companies, mowers with attachable implements offer another way to increase profits. “If you are considering equipment for functions besides mowing, consider buying a mower that can serve as a power unit for various implements such as an aerator, driftless sprayer, high-volume edger or any number of other commercial implements,” says Stucky. “With implements you can increase the amount of billable work that can be done with the same number of employees. It also eliminates the investment in and maintenance of single use machines.”
Storck suggests paying attention to your company’s training capabilities and existing systems when choosing equipment. “Even with a productive piece of equipment, if employees are not properly trained on it, or not comfortable using it, efficiency will be lost. It’s best to choose equipment that will enable you to replicate your work. For example, you may be able to afford one piece of fancy equipment but if you can’t afford one for every crew, you’re sometimes better off going with simpler, less expensive equipment that will allow you to develop repeatable systems.”
Don’t think a low price tag on equipment will increase profits. “Making a decision based on price alone is a common mistake that can cut into profitability,” says Stucky. “Choosing a machine with reliable operation and time-saving efficiency is a way to increase profitability.”
“Shopping on price is very shortsighted,” agrees Dust. “So many guys look at the $500 they can save by buying a piece of equipment at the cheapest place. That savings is gone the first time something goes wrong when the dealer doesn’t provide adequate back-up.”
“The importance of a good relationship with a dealer can’t be overstated,” he continues. “Do business with the best possible dealer, one who stocks the parts you need and will give preferential treatment to commercial customers to keep them in operation.”
A dealer can actually serve as a partner in your business efforts. “Find a dealer who sells on value instead of price and who will help you analyze your mowing needs and serve as a resource for increasing your profitability,” says Stucky.
Professional, precise communication with clients is another way to ensure profitability. “Develop forms and estimate sheets for clients that are clear and simple and include specifications,” says Storck. “A lot of guys will just list ‘mowing.’ It’s not ‘mowing.’ Are you going to bag or not? Are you going to pull weeds? How often will you edge? When employees know exactly what services they’re providing they can be more productive. And when the client calls to ask you to do extra things you can adjust your price.”
Bryk agrees that communication and consistency are key. “If you provide your clients the same crew leader every week, it helps build a relationship with the clientele and the workers will get to know the site. They can be proficient every week, knowing what needs to be done.”