You (like most of us) are probably wondering whether we’re about to enter a recession. Or maybe, you’re asking if it’s already begun. While the jury’s still out on whether the U.S. is officially in a recession or not, the facts remain: inflation persists, interest rates are going up, and people are watching their spending.
As lawn care business owners, these facts can seem especially daunting–because, unlike a mortgage or car note, landscaping projects can be seen as a non-essential expense. However, we’ve come up with several ways for you to “recession-proof” your landscape company despite the rocky economic backdrop.
Tip #1: Create a new budget
When’s the last time you did a thorough review of your operating costs? This includes assessing labor, rent, payroll, and other overhead costs. With or without a looming recession, it’s a good idea to periodically review your company’s budget and see where you can optimize work and reduce costs.
Plus, this exercise helps you see any trends in profitability that you haven’t realized or capitalized on. For example, you may notice you make more on lawn care (fertilizers, herbicides, etc) versus lawn maintenance (mowing, hedging, etc) month over month. If that’s the case, reallocate time and resources to build out your lawn care services.
Tip #2: Prioritize multiple revenue streams
Now that you’ve optimized your cash flow, it’s time to evaluate your services. The best business people will tell you time and time again to diversify as it’s a way of protecting yourself against unnecessary risk. And in the event of a recession, we’re looking to eliminate any extra risk.
So how do you diversify your landscape business? You create multiple revenue streams. Meaning, if you’ve exclusively been creating outdoor kitchens for the past 10 years, it’s time to expand that offering to pools, concrete work and fencing. If you want to start offering 3D renderings to your landscape clients, see if any of your employees have experience with CAD. It’s possible you haven’t tapped into the full potential of your team’s skill set. Now’s your time.
Tip #3: Consider pricing trends
As you’ve noticed, the price of almost everything has gone up. From fluctuating gas prices to supply chain issues, it may cost more to run your business now than ever before. Luckily, you can adjust your bids accordingly so long that you’re diligent about price watching.
Do your research on gas price trends, material shortages, and wholesale options in your area to determine how you price your services. By factoring in any relevant price increases, you’ll save yourself from undercharging and inevitably losing money.
Tip #4: Update packages & cross-sell reliable clients
If a recession is on the horizon, it’s a great time to reach out to your best customers. The people who love their lawn and do everything they can to maintain it. The clients who envision a backyard oasis are the people you’ll want to revisit when a business has slowed. (Pro tip: Knowing what projects are in the pipeline for each customer is a good business practice with or without a recession looming.)
Now’s a good time to see which projects they’ve been putting off–and offer them a custom maintenance plan to begin once the installation is complete. Maybe they’re ready for a pool and patio, so you suggest a paved pathway connecting the two spaces with extra trees for shade. By cross-selling a customized package, you’re increasing your revenue and establishing more rapport with your best clients.
Tip #5: Focus on essential services for new customers
But that last tip said to update your services and cross-sell…so what changed? The difference between the two tips is the previous tip is for your clients who always have a new landscape project in the works, whereas this tip is exclusively for new (or existing) customers that just need help with the basics.
In a recession, it’s not worth upselling landscape offerings if it means the customer may pass on the bare minimum. Instead, focus on the essential services that you do best and really show these new clients what you’re all about. Mowing, weeding, pest control–whatever it may be, continue to offer exceptional service, strong communication, reliable customer relations, and competitive prices. These new customers will remember that long after the recession ends.
We’re Here for You
Ongoing success is a result of sustainable business practices. And whether a recession hits or not, your landscape business could benefit from annually reviewing the tips above. For more ways to grow your business, check out our other articles or reach out about joining a peer group.