By taking a strategic approach to dealing with the challenges that winter brings, you can put your company in an advantageous position. If you can do this, you won’t be caught in a bind when Mother Nature throws you a snowball curve, or a breaking ball that has the words “turbulent weather” written all over it. In other words, be prepared.
Like the saying goes, “An ounce of prevention is worth a pound of cure.”
Planning ahead and developing strategies before they are needed will allow you and your team to effectively deal with challenges before they become disasters. In today’s world of weather surprises and employee shortages, it makes good business sense to take the time and be prepared.
Here are a few strategies that, when used, can keep your company profitable during harsh winters with severe cold and record snowfalls.
The first strategy would be to purchase weather coverage insurance to protect your company against harsh winters. This type of insurance can help you prevent a cash-flow crisis that can occur with adverse weather conditions that limit the amount of time you are open to the public.
Ideally, weather coverage insurance for the right kind of business—like a golf course—is a good approach. So, if a golf course has a harsh winter that delays the opening of their business by several weeks, it can help them cover their losses, and certainly make that winter and the following months much less stressful on the owners.
When it comes to a lawn maintenance company that also does snow removal, it may require a different approach.
A few winters ago, one of my lawn service and snow removal clients experienced problems that come with a flat fee that covers unlimited pushes, and it cost them plenty. A record amount of snowfall that winter put them in a difficult financial position. Fortunately, the following winter had much less snowfall and they were able to recover.
To prevent this scenario from happening in the future, they conducted some research. In this research, they discovered that the geographic area they serviced experienced, on average, twelve snowfalls per year of two inches or less of snow per snowfall.
As a result, they created a new pricing system that works this way: During the winter season, if there are up to twelve snowfalls of two to six inches, the client pays a set price. If there are seven snowfalls of less than two to six inches of snow, the client receives a five percent discount. If there are 13 snowfalls or more of two to six inches of snow per snowfall, the client pays an additional seven percent. A snowfall of over six inches of snow counts as two pushes.
Prior to this past winter, they met with each one of their accounts and explained their new pricing system. Every one of their clients agreed that it was fair, and signed the new contracts. They are now set for this year, no matter what Mother Nature may bring.
A second way to approach potential harsh winters or high amounts of snowfall is to offer various packages that cover a certain number of pushes. It gives your clients the option of purchasing a package that fits their needs and is affordable to their budget. This is an excellent strategy if your present unlimited push package could be rendered unprofitable by a harsh winter with above average snowfalls or icy conditions.
Don’t leave any money on the table. Be sure to include a premium package as one of your service offerings. The benefit to your operation is that with this strategy, you can offer your special clients a premium package service. This would be your most expensive service, but one that includes plenty of value. It is true that some of your clients want the best service and are not nearly as concerned about the price as you think they are. By offering them the option of a premium package with all the bells and whistles, you create a win-win situation.
A second strategy to strongly consider and take action on is to invest in quality equipment before you need it.
When you stop to break down the costs associated with using worn or inadequate equipment, it can add up quickly. Examples of costs could be wasted employee time—with them standing idle, waiting for equipment repairs or nurturing equipment that would be better off being replaced. If these types of potential issues are not planned for, they can lead to you and your team having to deal with an abundance of complaints that come from your unhappy or irate clients and overruns on employee wages.
A third strategy is to budget for and purchase technologically-advanced power equipment. By purchasing and training your employees to use this type of equipment, your company will be equipped to do more and faster work with fewer employees. This type of investment will give your company a direct advantage over your competitors who do not equip their teams with this level of equipment.
Another advantage for your company is that it will help protect it from the growing problem of a labor shortage of hiring and retaining qualified employees. Plain and simple, it will give your company the leverage of doing more work at a higher quality level with fewer people.
By investing in technologicallyadvanced power equipment, you are positioning your company to take advantage of the shrinking labor market, as the demand for qualified workers goes up and the quantity of available ones goes down.
So, in summary, here are the key points from this article on which to take action:
1. If it fits your business, consider getting weather-coverage insurance.
2. Develop a flexible snow and ice removal pricing system that will help protect you from harsh winters and excessive snowfalls.
3. Offer various packages priced at basic, better and best levels.
4. Invest in technologically-advanced power equipment for your green industry business.
By taking action on any or all of these recommendations, you will be well on your way to positioning your business for higher profits and less stress in the months to come.
EDITOR’S NOTE: Tom Borg works with small and mid-sized green industry companies to improve customer acquisition and retention. For more information or to ask him a question, contact him at 734-404-5909 or email him at: firstname.lastname@example.org or visit his website at www.tomborgconsulting.com.