Find opportunities in crisis

October 12, 2022

Landscape Trades October 2022 Growing Your Business

It’s time to evaluate your clients and raise prices

BY NATHAN HELDER

Growing Your Business is a new Landscape Trades column featuring business management experts writing on the topics that matter to landscape and horticulture professionals.

Albert Einstein coined the phrase, “In the midst of every crisis, lies great opportunity.” There is no question we are in the midst of a crisis. The word crisis comes from the Greek “to separate, to sift,” which means to pass judgment and to keep only what is worthwhile. There is an opportunity in every crisis and the deeper the crisis, the better the opportunity can be. However, the big question is, “Can you see the opportunity and are you taking advantage of it?”

Currently, the grounds management industry is experiencing a shift. For many years, contractors have struggled to raise prices because they feared losing clients. I hear many contractors complain about factors they cannot control, such as: fuel, weather, inflation, insurance costs, labour issues — the list goes on. However, what are things you can control? Why not shift your focus and exert your energy on what you can impact?

Adjust your attitude

As a person, you should be in control of your attitude and behaviour. Are you a “cup half full” or a “cup half empty” person? Do you allow yourself to be caught up in the media and negative press? Don’t be surprised, positive press doesn’t sell! But positivity can be infectious, and your team will benefit from your positivity.

Respond with agility

Stay calm and think quickly, then move to collaborating with your team. Collaboration is great, but collaborating without constraint is even better. Allow yourself the willingness to adapt. And finally, act and implement new ideas. It may not be perfect the first time, so continue the process of making it better by going through these steps again and again.

Evaluate each client/property type

Each type of client/property creates its own challenges and opportunities. What type of property lends itself best for your company? Clearly define who your client is from all angles.

Profitability: Complete job costing for each client. Are you hitting your desired margins for each property? Do you need to improve your accounting and bookkeeping?
Serviceability: If you struggle to find staff, then why are you quoting condominiums with individual stairs and steps? Focus on the types of clients that fit the equipment and staffing of your company. Is there an advantage to having a 12-month client or just a seasonal client?
Geography: Can you service a new property without adding drivetime and unproductive time? Can you improve the market density within your existing areas?
Growth: Setting growth goals will help direct your energy. The quickest way to increase overall revenue is to increase the pricing on all your clients. Then start adding properties to your existing routes to create dense pockets of clients.
Extras to contract (ETC): Is the client open to improving their property by spending revenue on extras? These extras can be very profitable, especially when you can use existing full-time staff during dry months.
Referrals: Does your client give you referrals,testimonials or five-star Google Reviews? Would they if you asked them to?
Maintenance: Is your client a “time vampire” that sucks the energy out of you and your staff? Are they never happy? Do they never allow you to make a profit?

Update pricing and contracts

With inflation over eight per cent, contractors should take full advantage by increasing their prices. In this climate, all industries have increased pricing. You should too. Ensure your contracts are not restrictive and include terms related to “cost of living.” The standard two to three per cent increases will not be enough. Be prepared to walk away from clients that will not accept price increases.\

Use equipment to the max

Invest in the right piece of equipment for the right task.
- Consider renting first to see if the investment would benefit your crew.
Use your equipment properly.
- Perform regular service on your equipment.
- Teach your teams how to know when oil and filters need to be changed.
- Keep equipment blades sharp.
Skipping regular needed maintenance saves you in the short term, but it can really cost you with breakdowns and force you to replace equipment earlier.
Challenge the status quo: Do you really need to have a mechanic? Or can you replace equipment sooner and teach staff to perform regular maintenance?

Double down on culture and recruiting

Take time to enjoy life: Staff barbecues, company picnics, golf days, paintball, etc.
Always be hiring: Never stop actively looking to bring on new and better talent. Focus on grit and tenacity.
Focus on creating utility players: These are staff members that have multiple skill sets and can be available for not only lawn maintenance, but also for performing landscape construction and other services.
Just because you may be short a staff member, don’t fall into the trap and accept mediocrity. Part ways with “bad apples” who don’t share the company’s core values.

Types of services

When did you last revise your contracts? How many services have crept into your contract that you are currently doing but not getting paid for? I bet it’s more than you think. Now is the time to clearly redefine your services and attach the true cost of each service or stop performing the free services. These could be simple things such as picking up pinecones, pruning personal plants, salting driveways in a condo, cutting grass beyond the property lines, etc. Increase the ETCs per property:

Set a minimum goal of 20 per cent and create a plan. For example, a $20,000 maintenance contract should provide at least $4,000 of ETCs.
ETCs include annual plantings, turf improvements, new gardens, tree and plant replacements, irrigation, mulch, retaining walls, and much more.
Use existing staff during the season to complete the ETCs.

Too often I hear of companies that struggle to be flexible or agile in their business. They have structured and built their company on a set of assumptions from five years ago. Today’s climate is very different. Share these ideas with your team to engage and involve them. The future looks bright when you have the right focus.

Nathan Helder is CEO of Gelderman Landscape Services, President of Southbook Accounting Services for skilled trades and Principal Consultant at Southbrook Consulting, each based in Waterdown, Ont.

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