By now, you’re probably aware of the growth potential your landscaping business has. The increasing demand for such services in both developed and budding areas means that you have an opportunity to build a thriving company.
But, knowing that you’re part of a healthy market won’t be enough to ensure the success of your small business. Regardless of the type of landscaping you do, whether lawn care, architecture service or interior landscaping, there are three things you need to master if you want to become profitable.
1. Give Accurate Job Estimates
Whether you’re providing the simplest of services, such as lawn care or complex landscaping designs for front and backyards, your customer will want to know upfront how much it will cost them to hire your services.
Not only will giving accurate job estimates save both of you and your customer time and resources, but you will also avoid unpleasant situations, such as your client finding out that he or she needs to pay more than he can afford. More than that, this practice can be proof of your expertise and professionalism.
The idea is to determine the costs of materials, labor, equipment, and your general business overhead. Then, you need to add in a profit margin. The final cost is your estimate.
Once the client agrees to it, put it in writing and have them sign the contract. That way, you’ll be able to charge any additional services and have a legal leg to stand on if they refuse to pay.
2. Set Fair Prices
When it comes to your pricing strategy, you want to be low enough to be competitive, yet high enough to be profitable.
Before diving into jotting down numbers, look at your monthly obligations – both your business bills and personal expenses (health insurance, mortgage, household bills). That is your break-even point. Your aim is to make enough money to cover these costs and still have something left.
Before you can give your prospects an estimate, you need to understand first how much it costs you to run your small business. A common practice in the industry is to charge by the hour for both yourself and your employees. Don’t share these rates with your customers—keep them to yourself and use them to set your fees.
But, how can you ensure your rates are fair but lucrative?
One way to do it is to look at your local competition and see how much they’re charging for their services. Take these numbers with a grain of salt, though. More often than not, landscaping businesses oversell themselves, hence the high rate of failure in the industry.
Another common practice is to see how much a specific service will cost you, then divide it by the number of hours required to complete it. Add the profit margin, and you’ll have your rate.
An excellent way to determine your rate is to start with how much you want to make in a given year. Divide that by 12 to figure out how much you need to earn in a month, then by the number of hours you want to work in a month and add the profit margin. This price version doesn’t include operational costs, though, so you’ll have to add them separately.
3. Hire the Right Persons for the Right Tasks
In the beginning, when you don’t have too many clients, it’s easy to be a one-person show. But, as the demand for your services increases, you’ll find yourself overwhelmed and prone to making mistakes, like missing or mixing appointments.
Not keeping your promises to your customers can dramatically affect your small business’s success.
You can avoid that by putting a good tracking system in place, be it a very organized agenda or software system designed for landscapers. Enter your data into this system, print out your schedule, and have it by your side throughout the day so that you can consult it and make changes as needed.
When the work becomes too much for you to handle on your own, you might want to hire some help. If you don’t want to go through the hassle of hiring full-time employees, you can work with contractors. Just remember to add 15-25% to the bill you send to your clients to cover their fees.
Regardless of whom you choose to work with, make sure to check their certification and reputation before hiring them. Remember, your business’s success is at stake here.
Growing a business, especially in a competitive market like landscaping and lawn maintenance, requires a well-thought plan. Keep these tips in mind, and you’ll be well on your way to success.