Archive for Landscape Contractor

What are the 5 Biggest Challenges Facing a Landscape Contractor Today?

By Sitesource · Comments (0)
Thursday, July 19th, 2012

What are the 5 biggest challenges facing a Landscape Contractor today?

1. The uncertainty of government regulation, including taxes, health care etc.

2. The labor market including immigration and labor availability.

3. Raising prices on everything from fuel to seed.

4. Drought condition across America.

5. The lack of available capital for growth.

The uncertainty of government regulation is creating a slow down in the recession recovery. Businesses are unsure what the government will add to the burden of taxes and additional cost to operate. The health care law would appear to be a big burden for small businesses and is yet to be defined as to the costs to employees. This uncertainty is not helping the normally conservative business community. Until this is defined, the concept of business growth and job creation will continue to stall.

The labor market may very well be the largest issue facing landscape contractors. The issue of immigration reform seems to be a political football, with no solution being offer by either side. Add to that the country’s cry for made in America, it is hard to imagine that Landscape Contractor will be able to find the necessary labor to do the work. We all know that the labor force that is currently seeking work will not perform the job functions that the current immigrant labor force is  providing in our industry. Finding new resource of labor pools willing to do the manual labor isn’t easy and at this time, unidentified. This will drive the labor cost up as the demand for labor willing to perform the landscape functions increases.

The inevitable price increases,  due to the drought, world shortage of items like petroleum, will force the price to increase on many items in the next 12 to 24 months. These increases are already visible at the super market and the gas pump.  Although fuel prices have decline in some parts of the country, it is uncertain how long this will last. Inflation seems inevitable because of the raising debt crisis that the country is facing. Until the government finds some way to get a handle on the raising prices, as business people we are left to wonder “what if?”.

The current drought condition across the country affects landscape contractors in many ways.  Less water means less planting, the drought will cause  many clients to reconsider project that they would other wise go forward with and finally, the drought is not just a one season issue it will have affects for years to come. In the west we are already concerned about snow pack for the upcoming winter, and worry about there being sufficient moisture to fill the reservoirs for next season. Many experts have stated that the west is in a 50 year drought cycle with about 40 years remaining on the cycle until it ends. This can and will change the face our our industry, and not just by the ways we use water.

The traumatic swings in the stock market and the recent financial down turn have changed the face of the banking relationship with small business. This change certainly will affect the ability to borrow capital to expand businesses in the future and may affect the creation of new venture going forward. Again looking for alternative means of financing new capital needs is a must. Small business people will not be expanding and will not be hiring unless some plan is developed to encourage banks to lend.

All of this paints a bleak view for the business person, however, it may be a good thing, as it will force businesses and business owner to grow more cautious and be stronger for their effort. Those that plan and develop a strategy that allows for slow but steady growth will be successful in the end. This is why planning your business direction is so important to your future success.  Look at these challenges and how you have considered them in your overall business plan.

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Categories : Business
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Half way through the season: Is your Company where you want to BE?

By Sitesource · Comments (0)
Saturday, July 14th, 2012

We are half way through the landscape season, and it is time to look at where your company is in relationship to your plan. It has been a busy start to the landscape season for most contractors, with any early season start and favorable weather conditions. But as you look at your plan:

  • Are you meeting the expectations and goals of your plan?
  • Are you reaching your profit goals?
  • Are your revenues at the projected level?

If not, what do you do now? You have 5 months to turn things around, where do you start?

Let’s start at the beginning. As part of your yearly start up, your company should be developing a business budget and a strategic plan for the year. If not, how can you determine if you are successful in your business, and, more importantly, how can you plan for the future of your company? If you have these tools, how do you compare to your plan? Are you producing monthly financial statements to help guide you through the business? The monthly financial statement is your monthly report card. Are you making a profit? If not, why not? Some landscape contractors, and for that matter many business people, tell me “I am too busy to look at these reports” and “I have an accountant who does my financials.” Well, that’s great, but how do you know if you are making money or not? Cash flow is not the way to determine whether you are making money because most likely the cash flow will dry up in August and you will be asking what happened.

I have created a tool that is available to you at no charge, called the Business Health Report. This tool is targeted  at your business and the things that you need and want to be doing in your business to be successful. This tool will ask you simple questions about you business operation, financials, insurance and other business related topics. When you answer the questions, be honest with yourself, then you will see how you compare to successful businesses in the landscape industry. The tool will point to areas where you may be weak and where you need to spend more time in the coming months. I can help you determine the areas that you need to work on and help you get to the results that you planned for. This is not a quick fix, but it will assist you in focusing on the items you need to do to get your business back on track.

download business health report tool

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Categories : Business, planning
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Advantages of the Small Landscape Contractor

By Sitesource · Comments (0)
Monday, July 2nd, 2012

Being small is not a bad thing, it can be used to your advantage at times. In many bid situations customers often compare numbers to select the contractor for their project.  However, customer service, the ability to respond quickly, the idea that you are local and the fact that this customer will be your most important customer, makes you a better choice than the big national contractors.  Selling the customer on the fact that you are a better selection is not always easy, but it is an advantage that you need to highlight for your customers. Let’s face it, would you rather have fewer customesr and make more profit or have more customers and less profit?

Small contractors have true advantages over the large national contractors. Being part of the community that you serve is a huge advantage,  you are the most recognized service provider in your community. You get involved in community projects and support community organization such as Rotary, Boys and Girls Clubs and other charitable groups. Most national contractor don’t take the time to get involved in the community and don’t understand the benefits of that community involvement. But you need to sell this to your market place, explaining what makes you a better selection that a national company. You also are keeping the money earned in the community, not sending your profits back to a national company headquarters thousands of miles away.

Sales is not always about the cheapest price, but about solving a problem for a customer, while providing a value to the customer. This market concept may seem foreign, but think about what you offer that the national company’can’t. Networking in your community and becoming a go-to company when your customers need help, this will build a reputation of customer service. In my community we have a small plumbing contractor who started small and by keeping his name in front of the community and responsing to customers needs he has begun to grow the business to a 3 truck service company. Being small is an advantage learn to use it.

I often hear from small contractors that they can’t compete with the national contractor because their pricing is so much lower. Well, my response is, let’s look at the facts.  Is your overhead head not less than theirs?  Do you not have less equipment to purchase and maintain than the national contractors?  The national contractors tend to drive pricing lower to be come more competitive with each other, but as they drive the pricing down the quality will decline as well, offering you the opportunity to sell your superior customer service. Larger volume does not mean more profit or better service, in many case it means the opposite.

As a small contractor you have the benefit of being known in the community for recruiting as well, while the larger contractors may recruit nationally, your local university and college offers the opportunity to get to know you and your company. The labor issue is so unsettled in the country right now that hometown recruiting is the way many small contractor will find their labor.

In so many ways, the small contractor has the upper hand, as urban communities become the new rage, you as part of the community can take advantage of the social change. Gas prices continue to increase in your location, the closer to your customer the less travel and fuel expense to your customers. Turn the negative into a positive for your company. The large companies are facing a back lash from the middle class, take advantage of this in your marketing.

Small contractors have a distinct advantage, use in your marketing.

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Categories : Marketing Strategy
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Banking Relationships Are Important to Landscape Contractors

By Sitesource · Comments (0)
Monday, June 18th, 2012

A banking relationship is important to a Landscape Contractor for several reasons. Landscape Contracting is a seasonal business whether you are in a warm climate our not, cash flow is always important and it can be difficult to get it on a regular basis. Putting your own money into  the business is great but the business should stand on it’s own.  Being prepared when you visit a banker is helpful and makes the you look more professional as a business owner. Preparing yourself for the visit can make it go much smoother. Most bankers want 2 years of tax returns from the business and from you personally, 2 years of annual profit and loss statements, balance statement, list of current contracts and future work, and an executive summary of your business. Most importantly, visit the banker before you need funding for what ever projects or needs. Establish this relationship when things are looking their best.

The landscape business is seasonal no matter where you are located.  Most people look at landscaping as a summer activity, just look at you cash flow and revenue numbers to see how they increase from March thought November. Therefore, make sure that you develop your planning and financial needs around the seasonality of the business. When you visit the banker explain your business’s seasonality and how it affects your need for a line of credit for example. Educate the banker on your business, don’t assume that he or she knows your business. Think about asking the bank you select to sit on your board of directors, this will help create confidence in you and your business.

For most contractors cash flow can be a tough subject. You know that your customers are going to pay, but when? For this reason it is helpful to seek a line of credit to help tide you over during the slow times. A line of credit is money that you can access when you need funds and repay this line down to zero once per year. Interest rates may vary, but certainly you can negotiate the rate with your banker. This is why it is important to establish the relationship before you need it, don’t go the the bank when your business is in crisis.  As the owner it is possible at times that you will need to use your own funds to support the business, but it is not the best way to fund the short term needs. The business needs to support it’s self, not using your money.

Finding a bank that you and your business can depend on when you have financial needs is key to your business success. That relationship takes time to establish and can be the best time you spend working on your business. Don’t wait to visit your banker with a well prepared package to represent your business. Make sure, just like your customers do with their landscape projects, check the competition for the best relationship for you. Selecting a banker is more than who gives you the best checking acount rates or has the best hours of service, it is about a relationship like you have with your CPA or lawyer. Make it work for you.

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Categories : Landscape Contracting, planning
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Hiring to Strengthen the Bench for Your Landscape Firm

By Sitesource · Comments (0)
Wednesday, May 9th, 2012

As business owners, we all have strengths and weaknesses, but how we deal with these issues can be the difference between success and failure of our businesses. Not every business owner is good at every aspect of their business.  To deal with this we need to consider what  our strengths are and hire to offset the weaknesses. First, however you need to do an honest assessment of your skills and your likes and dislikes in the business. It is not only what you like or dislike but also what  you enjoy doing in the business.  Is sales or operations your love, then hire someone to do  other jobs in your company.  But ignoring the issue will not make it go away but only create more frustration in your life.

I once worked for a owner who was great at sales, but claimed that it was awkward for him to sell because customers always want preferred scheduling and treatment.  He never hired anyone else to perform the sales aspect and was frustrated because sells were not improving.  This is a classic example of the point, hire for your weaknesses, build a team.  As we know having all quarterbacks won’t make a good team.  Sometimes it’s not easy to see what the deficiencies are in your company, but look at what talents you have and start building the team from there.  Sometimes it takes an outsider to see the deficiencies in your company, don’t be afraid to hire a Consultant or a Business Coach to work with you on this issue.

As part of your management team assessment have them list what their strong points and weak points are in their own eyes. With this information you can develop a clear view of what positions you need to fill. I believe that too many times in smaller to medium size companies we fail to see the problems or just ignore the problem because we think that it will cost too much to add a position, when in reality the position can pay for its self with increased efficiencies. You may want to consider this for your entire team.  Have the managers rank your crews and your office manager rank the office staff to determine what short comings may be impacting your company’s performance. The team is only as strong as it’s weakest link.

While I can hear you saying, “I don’t have time for this now”, I would respond by saying that you can’t afford not to identify the weaknesses that may be impacting performance in your company.  Whether you decide to address these weaknesses now is another decision that you can make based on the nature of the weakness.  But by identifying these issues now will allow you to start thinking about the fix, it may also be more easily done than you think. When the economy is down is when these issues tend to surface, being ahead of the game is in the best interest of the company and may offer the chance to make an improvement now while the season is young.

This is a classic example of work on your business, not in it. Identifying issues like this will help your company becomes more resilient to economic conditions. It will also improve the overall profit of the business if you make the right hiring decisions. Waiting is not an option, it is important to your success that you identify the issues as soon as possible.

Business can seem like a puzzle at times and finding the right pieces to the puzzle can strengthen your company’s position in the marketplace. Hire the right players for the right position, don’t wait.

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Categories : Leadership
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Manage Your Landscape Firm Through Vision and Culture

By Sitesource · Comments (0)
Tuesday, May 8th, 2012

I recently wrote a blog on the current changes to the economy and how they are harming most Landscape Contractors (May 7, 2012 blog, titled “Facing a Down Economy as a Landscape Contractor”).  In the blog I suggest that you must stick to your plan and make whatever adjustment you need to make to insure a profit for your company.  As part of any plan is your vision and mission statements for your company, which should be the creed of your company. These two statements should set the tone for your employees and your customers and the way you intend for your company to conduct business, no matter what the economy conditions are.

I recently ran across an article by Howard Schultz, CEO of Starbucks, discussing the turn around at Starbucks and the reason for that recovery.  Mr. Schultz outlines three things that have contributed to the turn around. Create a value proposition for your customers, customer choice is based on authenticity and the transition to social media is a way to market and communicate with customer.  These same concepts apply to the landscape contracting business and what we face as the economic conditions continue to slow, with little or no recovery insight.

Creating a value proposition for your company is a defining statement to your customers, defining what your company believes in and why. As consumers continue to struggle they are looking for value in what they purchase. Consumers are forced to make buying decisions based on their ability to afford the product or service.  We as contractors, need to give them the reason to buy from our company and not the competition.  We need to explain why we are the better value in these tough times, giving them a reason to buy from us.

Customer choice based on authenticity; what does that mean?  It means that the customer is looking for a trust worthy company.  They can trust your company to provide what you promised.  Secondly, the consumer must see the value in your service to continue buying the service in the tough economic times we face today.  This is a culture that you must create in your company giving employees the understanding that they own the consumers confidence in them and through their actions the consumer will recognize the value of the service and continue to buy that service no matter how tough times get.

The way in which we communicate with our customers has changed from just five years ago, today the social media is more widely accepted form of communication. The personal touch through personal visits is no longer the only way to communicate.  You may have customers that will only communicate through the use of social media. You need to accept this and encourage your employee to learn and use this method of communication. We must learn as company leaders that we must remain abreast of the changing methods of communication, as part of your culture you need to promote the newest methods of communication. Today the contact with a customer is more immediate, we are on a job site and we are able to send a text message to our customer letting them know the latest update on the project. For good or bad, we as owners are putting more and more communications in the hands of our employees and we better be confident that our employees are communicating the correct information to the customer.

It is so important today to instill in your employees the power of communication and the value that  communication creates for the company and the customers. Insuring that your employees understand the company values and culture, so that each employees speaking to a customer is saying what you would say if you were on the job site.

 

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Categories : Leadership
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Facing a Down Economy as a Landscape Contractor

By Sitesource · Comments (0)
Monday, May 7th, 2012

What are the most difficult challenges facing Landscape Contractors today?  In the past I have written about the “5 Issues Facing Landscape  Contractors in 2012″ (see 2/3/12 blog).  But I think there is an additional challenge that did not exist 12 months ago.  The economic conditions have not improved for may families and this lack of improvment has created a new challenge for contractors. This challenge is the lack of decision making ability.  People are worried that they will not have a job tomorrow or that they are paying too much for the goods and services that they purchase.  They are stuck in the middle.

The lack of decision making ability has caused many to sit tight on the items that would appear as a luxury item to them, Landscaping and Landscape Maintenance are part of these luxury items that people are not spending money on.  This is difficult to combat, as these people are in a real life struggles and are not going to change their minds until they have improved their  living conditions.  This issue extends to businesses  as they reduce workforces and cut back on the items that are not revenue producing,  They too are not sure what is going to happen with the economic conditions.

It is important that you continue on the course that you planned, but insure  to cut back if you needed to make your budgets work.  Watch the key indicators such as labor, materials, and fuel cost.  These categories can easily to get out of hand, pay close attention to these areas making appropriate cuts when necessary.  This is where the percentages can help in a quick review of the P&L.  Labor should be the same percentage of revenue no matter what your revenue numbers are, if you are budgeting correctly.  It is important that you pay close attention to you budgets and react as necessary. Many contractors are having trouble meeting the budget goals and in an uncertain economy,  it is expected.  But that does not mean that you can’t make a profit. Controlling expenses can help you achieve the profit goal you had planned, but you must pay close attention.

Business is a difficult game, but if you plan and pay attention you can survive and thrive in a down economy.

 

 

 

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Categories : Landscape Contracting
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Landscape Contractors are Demanding More From Their Employees and Getting It

By Sitesource · Comments (0)
Tuesday, April 24th, 2012

Landscape Contractors are demanding  more from their employees and getting it.  Why?  Because the market has changed and the contractors cannot afford to hire the middle management that they did prior to 2008.  This change is forcing the contractors to look at other ways to get employees to buy in to the new culture and learn how to take care of customers.  The Foreman or Crew Chief position is providing the necessary leadership to get things done and take an active role in managing customers.

This is partially due to the recession and partially due to the lean process that many companies have embraced in the past few years.  Everyone is looking for ways to improve their business, be more competitive and profitable.  In the landscape business there are not many ways to accomplish this, we are about people and materials.  There are not a great many new labor saving devices that have been developed for the landscape industry.  So developing ways to engage your employees is now paying dividends.  The recession has taught us how to get more done with less, and this includes labor.  Many companies are not hiring to the same levels as in 2008 and before.  This changes your company’s culture, requiring more of your existing employees.

This new development of the crew level personnel is allowing the Foreman or the Crew Chief to play a more active role with the crew, but also the customer. Teaching that level employee the importance of customer care will pay huge profits in the end.  First, the crew is there on site and able to address the needs and wants of the customer right now. Second, the time and money saved in having an Account Manager or a Sales person to address the customer’s need takes time and money.  The lean process allows for less involvement from outside the crew and brings satisfaction to the customer right away.  This is about time savings and execution in the field.

The changes in staffing and increased responsibility of the Foreman or Crew Chief level person gives them a greater sense of accomplishment and buy-in to the company goals. It also shows the field staff  trust and recognition of the Foreman or Crew Chief that was not there before.  This can and will go a long way to gaining respect and buy-in to the new culture.  The Foreman or Crew Chief have long looked for this respect and now that they have gained that respect, they are not going to let go.

The growth in the landscape contracting business will come from businesses that recognize the power of their people.  Allowing them to go as far as their talent will take them.  It will require a new method of management to get these employees to continue producing at this level.  It will force management to look for new ways to compensate this new group.  Keeping them engaged is a real challenge.  The companies that solve this issue are the ones destine to become great companies.

Economic conditions have forced many landscape contractors to change how they do business and the concept of asking for more from field employees has long been a goal of our industry.  We may have just learned that from difficult times comes great solutions.  Time will tell whether or not we have found the long term solution to improved customer service and efficiency, but we are on the right track.

 

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Categories : Leadership
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Negative Comments on the Web About Your Landscape Company

By Sitesource · Comments (0)
Monday, April 23rd, 2012

What do you do when a customer posts a negative comment on the web about your landscape company? We all know that in today’s world, the fast pace of the electronic media, things are said that can create issues for us as business owners.  The number of chat rooms is increasing every day, with people chatting about things they don’t even have  knowledge about.  So, what do you do about negative comments?

My advise is to not comment or try to defend your company against negative  attacks or comments.  Keep a positive attitude, continue to do what you believe is the high road.  I would respond only with positive commenst about your company and never address anyone’s negative comments.  We all know that you can not please everyone. Anyone in business knows, that at sometime, you will find a customer who you can’t please.  It happens to all of us. Starting a war of words on the Internet is not going to serve your company, or you well.  Time is too important to spend on negative comments.

It is important to keep your company in the lime light but not by defending negative comments.  I would however, review the comment to determine if there is any truth to the it.  But this becomes an internal issue, not to be published on the web.  This becomes a learning opportunity for your staff and you, make it into a positive all the way around.  Use this as a forum to write about the good things your company is doing in the community, highlight community service projects that you have recently completed.

Work with your staff to let them know that this happens and what they might do differently the next time this situation comes up.  Support your staff and explain how you may have handled it differently and that we all make mistakes and we learn from them.  ”The customer is always right”, does not mean that they are correct in what they want, but only that they get what they want because they are the customer.

Negative feedback is an opportunity to learn and improve your customer service, not to start a war of words on the world wide web!

 

 

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Categories : customer Service
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Creating Strategic Relationships in the Landscape Industry.

By Sitesource · Comments (0)
Thursday, April 19th, 2012

Creating strategic relationships in the Green Industry is as much a part of managing a successful business as building sales and revenue in the company.  These relationships can assist in building a network of peers, suppliers and vendors, advisors and mentors to be your “go to” folks in time of need.  In any business there are times when you need help and don’t know where to turn, these strategic relationships can prove beneficial in seeking advise and assistance.

It is important that all businesses develop a group of people whom you trust and ask for advise on a regular basis.  These professionals are people like your accountant, banker and lawyer who you have used for years, but may never have thought of them as advisers to your business.  This is one type of strategic relationship that many business have, but never recognized them as such.  But there are other strategic relationships that you need to build. Businesses that may offer services different than yours, but to similar clients. These companies are available when you need their services for help with one of your clients.  No matter how hard we try, we can not be all things to all people.

It is sometimes important to find people in your own industry that services a different niche market than you.  Agai,n you may services a commercial clientele and not work in the residential market, but you have a property manager who needs work  performed at their residence.  By providing a reference to your customer you are providing a valuable service and that customer will remember you down the road.  Again , knowing your capabilities is so important when serving your clients.

Developing this same type of relationship with vendors and suppliers is also an important addition to your list of strategic relationships.  There are times when you will need a part or something special ordered and the only place to go is your supplier or vendor.  It is all part of building   contingency plans for the time when you need something special.  Business is about relationships and if you treat them with respect and build that relationship before you need their help you are much more likely to get help in return when you need it.

Don’t stop there, think about other relationship that you can build that can help your company.  The home builder or the architect or engineer that you always think about but never pay them a visit. You have similar clients, so how can you help each other by creating a business relationship.  We all sent our sales people to leads group to generate more leads for our company, but how many owners spend the time networking in our own groups?  We call these folks “Channel Partners”, people who had similar clients but different interactions with them than we did.  Interior designers are a great resource for leads that, again, serve a population very similar to ours.  These strategic relationship come in many forms, don’t discount any of them.  Some day they may lead you to the largest project you ever found.

Strategic relationships are a very important part of your sales strategy and should be identified by your team and pursued.  These indirect relationships are a great resource for all kinds of issues.  Make sure you are not missing out on a resource that can help you grow your business.

 

 

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Categories : sales
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