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Let’s Talk Profit

Making a profit in lawn care may seem a little tough in today’s economy. Not only are we in a recession, but we also face volatile synthetic fertilizer prices and strict government regulations on what, where and when we spray. However, things are much brighter than they appear. Our CEO, Barrett Ersek, has a saying: “Adversity is a leading indicator of success (go back and remember this saying).” Change is imminent. Even though we may find ourselves in a pickle, we should look at this as a gift and opportunity to get creative and innovate in the lawn care world. Profit can be made, even under the present circumstances so long as we are willing to go the extra mile. Does it sound too good to be true? Let me share with you some of the things Barrett did in his last lawn care company that allowed him to go from $0 to $10 million dollars in revenue in 5 short years.

There are two ways to increase profits: cut costs or grow. The latter is more fun, but let’s look at ways where you can do both and win big time.

Cutting costs: Does the idea of spending less make you wince? Well, take a deep breath. Cutting costs are important but I’m not going to ask you to stop purchasing for your company; I’m just going to ask you to try doing this a little differently. It will save you money and time… both of which a busy entrepreneur such as yourself needs. 

• Golden streets: If you are a subscriber to our blog (and I recommend that you are), then you may be familiar to the term golden street approach. This is a tool Barrett utilized in his previous company to cut costs but to also gain more valuable customers. It’s all about refocusing your attention on areas/neighborhoods/streets where your most profit-providing customers live (think McMansions). Wowify these clients with superior services and reach out to their neighbors. Develop a way to own these neighborhoods and you not only gain super profit-providing customers, but you cut down on windshield time. Windshield time is the time that your guys spend sitting in a truck going from place to place instead of spraying lawns and bringing in revenue. Windshield time can be a major drag on your revenue. Learn how to grade your neighborhoods by utilizing this criteria sheet.
• Daily huddle: Having a daily huddle, at least once a week for 10 minutes, may not seem like a way to cut costs, but it does. Have a meeting with some of the other top people in your company and discuss what’s stopping progress. It will allow you to solve roadblocks faster and draw on ideas of your employees on the best way to get things done. Talk about productivity! Visit growth guru Verne Harnish’s article to learn more.
• Volatile synthetic fertilizers are a no: One of the biggest costs in a lawn care company is the amount you pay for the actual fertilizer. Fertilizer prices are volatile and when they rise, your margins shrink. Bionutritional products or other hybrid products can allow you to cut down on your fertilizer and pesticide rates in huge amounts. They save you money and allow you to break free from your dependence on volatile fertilizer prices.

Grow, Grow, Grow: The golden street approach is one key way where you can grow and save money at the same time. What are other ways to grow your lawn care company and bring in more revenue? Let’s explore a few.

• Differentiation: Discover some way to stand apart from your competition and the TruGreens of the world. By differentiating your company, you ensure that prospective customers will notice you and remember your company name. In the book, Purple Cow, Seth Godin talks about how companies need to become purple cows (unique companies) in today’s world in order to thrive. There are just too many normal, brown cows in the world for you to be noticed otherwise. Don’t forget to market this differentiation!
• Marketing: Too often, I see busy lawn care company owners pushing marketing needs aside. Marketing is vital to the growth of your company and should take precedence when it comes to growth. January has just begun, which means it’s nearly time to start selling for the spring season. Have you developed a marketing plan for 2013 yet? A ship without a rudder cannot steer nor can a company without a growth plan. Spend some time developing your marketing plan now. Visit this blog entry to learn more.
• Organize your marketing database: Yes, the task may seem boring (I know it! I’ve done it) but organizing your database can be a simple way to grow your company. After all, what’s the point in developing an awesome marketing piece if you are sending it to the wrong people? Instead of developing a direct mail piece and shipping them out blindly across the land, send them out based on these points:

1. Get a list of all the customers who have bought from you in the past 12 months. It’s easiest to sell additional services to people who know you, than to spend time gathering new customers who have never heard of your company before.
2. Have you graded your region via the criteria for golden streets that we discussed above? If you have, good! Reach out to the people located in your golden streets and work your hardest to own the accounts of the entire neighborhood.
3. Develop a list of your lapsed customers. These are people who may have canceled or stopped their services with you for some reason. It’s often easier to win back these customers than to gain new ones. Furthermore, ask them what went wrong and you’ll be able to solve problems in your company, even the ones you didn’t know were present.

There you have it. You can utilize the present circumstances in our industry to get creative and earn a killer profit all in one go. Want to learn more? Download this white paper by Barrett Ersek entitled 7.5 Secrets to Growing Your Lawn Care Company. I would also recommend subscribing to our blog or at least checking in with us to learn our weekly marketing tip. Keep growing!

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Photo from: http://sife.uga.edu/images/profit3.jpg