You know the saying about having all your eggs in one basket? Now is a good time to broaden the range of products or services that your company offers so you can appeal to a broader audience of customers.
You’re driving along the road when you notice, off in the distance, the flicker of brake lights flashing on and off. Traffic hasn’t stopped, but clearly there’s something going on. What do you do?
Accelerate? Probably not. Slam on the brakes? Not that either.
You become more vigilant looking for signs that you might need to make a correction. You’ve still got plenty of time to act, and if you pay attention, you’re sure to make intelligent and safe decisions.
You probably know where I’m going with this analogy. After a 10-year plus run of expansion in our industry, a few companies have gotten complacent, too accustomed to running on “cruise control.” You can do that for a while, but eventually it gets risky.
This is the time of year when I visit with clients to work on strategies for the coming season. When it comes to planning, some of my clients are naturally inclined toward a vigilant, wait-and-see approach; others are more full-speed-ahead.
For both types of clients, I’m recommending a “flexible stance” strategy for greater nimbleness in 2019. My system helps companies be prepared to capture the upside if the market keeps motoring forward — and to minimize the downside should it decelerate.
As part of planning for uncertainty, I encourage clients to be more strategic about what they’re doing. Recognize that good times lull us into complacency, and we stop challenging ourselves to do better.
Here are a few things to think about while you work on your plan for 2019.
Precisely focus on the right things. Stop wasting time on things that don’t deliver value; you can’t afford to. If the market tightens even slightly, you’ll wish you could get that time back.
Understand that every marketing initiative comes with two costs. The first is obvious; the time, effort and expense of doing a project. The second cost is the potential for missed opportunities. When you decide to pursue one thing, you’re making a choice not to pursue something else. Sometimes, it’s what you don’t do or ignore that hurts you.
I have one client who has a tough time with opportunity costs. His marketing team wants to spend time trying to make cutting-edge social media marketing work, but after three years, there’s been little return on that investment. What my client needs to do instead is prioritize mailing out (and following up on) contract renewals for the coming season. The opportunity cost of working on “what we think is cool and might work” keeps drowning out the opportunity cost of “keeping the clients we already have who pay us regularly.” Opportunity costs are about choices. Make sure your team is choosing the right things.
Diversify to lower risk. You know the saying about having all your eggs in one basket? Now is a good time to broaden the range of products or services that your company offers so you can appeal to a broader audience of customers. Then, if one category of services sinks, another can make up for it.
When you’re considering which new services to add, prioritize those that offer stable revenue streams. For example, contractors should focus on maintenance, repair and overhaul instead of bid work. Start working on your plan now to capture those clients while your competitors are ignoring them.
Avoid linear planning. Forecasts that say, “We’ll sell the same amount as last year, plus 10 percent,” need to be reexamined. Seldom does growth come in a steady, linear fashion year after year. Examine the macro-environment more closely to be sure it supports another year of gains. Many of the factors that have driven robust growth in our industry are now reversing direction or getting long in the tooth.
More importantly, if you really want another 10 percent, you’re going to need to do a lot of things differently and better. Be sure you can answer my usual question: “What will you do different so that you can grab that next piece of growth?”
Jeff Carowitz advises landscape industry firms on marketing and business strategy. He can be reached at firstname.lastname@example.org.