The landscaping industry reached a market size of over $105 billion in 2021. With over 600,000 landscaping companies in the industry, there's still room for immense growth as these services are still quite popular.
However, if you're not seeing growth in your company, it's time to consider why.
The industry is booming, and there is a high demand for your services. So, where can you find ways to optimize your business operations and maximize your landscaping company's profits?
Read on as we walk you through nine top ways to improve your working efficiency and increase your business profit.
How to Improve Your Landscaping Company's Profits
If you're sitting there thinking, "We're good where we're at with profit, " you might need to take a step back. There's always room for improvement and growth in business.
Optimizing business procedures can have a significant impact on profitability. You can improve your bottom line by streamlining processes and eliminating wasted time and resources.
In addition, well-designed business procedures can help to improve customer satisfaction by providing a more efficient and practical experience. Here are a few tips on how to accomplish both.
Know Your Costs
In any business, knowing all your costs is key to being profitable. This knowledge is especially true for landscaping businesses, where there are a variety of variable expenses that can impact your bottom line.
From the cost of plants and mulch to the fuel for your equipment, knowing your costs is essential for ensuring that your business is running efficiently and positively impacting your bottom line.
Of course, costs can fluctuate monthly and from job to job, so staying on top of numbers is essential. Not sure where to start?
Track how much you spend on materials and supplies. Tracking material expenses include mulch, soil, plants, and tools. Be sure to keep receipts and invoices to calculate your costs accurately.
Likewise, track how much you spend on labor. Tracking labor costs includes wages for yourself, any employees, and any subcontractors you hire. Again, be sure to keep accurate records so that you can correctly calculate your costs.
Then, factor in how much you spend on fuel and other transportation costs. Fuel can be expensive for landscaping companies, so it is crucial to track it carefully.
And finally, keep track of how much you spend on advertising and marketing. Marketing is essential to running any business, but it is crucial for landscaping companies that need to generate leads and draw in new customers.
By tracking these expenses carefully, you will better understand how much it costs to run your business. This financial awareness turns to financial savvy over time, allowing you to price your services more accurately and make better financial decisions for your company.
Diversify Your Client Base
Now, it's time to diversify your client base and offer more services. You can go about diversifying your client base in a few different ways.
First, think about the type of work that you do. Are you mostly residential or commercial? If you're primarily residential, consider reaching out to businesses in your area.
Many businesses need landscaping services and are often willing to pay more than individuals. You can also reach out to schools, churches, and other organizations.
Another way to diversify your client base is to offer different services. In addition to traditional landscaping services, you could offer snow removal, Christmas light installation, or landscape design. By providing various services, you'll be able to appeal to a broader range of clients.
However, that doesn't mean you should keep offering any service that comes to mind. Instead, focus on the next step.
Because you analyzed costs already and know where you're losing money, it's time to shed the services that don't work for your business.
For example, let's say you offer water feature installation. If that has made you a lot of money in the past, but you've seen a decline in the market, then you can make a change and stop wasting time offering the service.
Focus on offering services that bring in the most profit and have the highest demand.
Replace Your Equipment
Any business owner knows that you must carefully manage your expenses to make a profit.
Landscaping businesses have a wide range of overhead costs, from gasoline for the lawnmowers to the cost of maintaining a fleet of vehicles.
One way to reduce these costs is to upgrade your equipment regularly. Investing in new, more efficient machines can save money on fuel and other operating expenses.
In addition, newer equipment is often easier to maintain, which can further lower maintenance costs. Consider switching to green equipment to save money and time and meet changing compliance regulations.
Use Asset GPS Trackers
Regarding managing and upgrading your equipment, it's also a good idea to use asset GPS trackers. If you're losing money on lost or damaged equipment, it might be time to invest in equipment tracking.
With a great GPS tracker, never lose equipment, materials, or any business asset again. Not only that, but with GPS tracking, you can optimize your drive time and improve business efficiency.
Imagine if you're able to place a GPS tracker in all of your landscaping company's vans. You can track the equipment in each truck or van as it goes to every client location.
You can look deeper if one van works at 25% lower efficiency than the others. Are the workers not as productive, is the equipment more run down, or is it something else?
If you want to take things a step further, consider using a great fleet management system next.
Think About Fleet Management
What is fleet management when it comes to landscaping companies? Fleet management is the process of organizing and coordinating a company's vehicles and drivers. In the landscaping industry, fleet management is essential to ensure that crews have the right equipment and resources to do the job.
This can involve everything from scheduling maintenance and repairs to tracking fuel usage and vehicle location. By using a fleet management system, landscaping companies can improve their efficiency and better meet the needs of their customers.
Likewise, fleet management has numerous benefits for businesses offering landscaping services.
Perhaps the most obvious benefit is that it can help improve the business's efficiency. By tracking the location and status of each vehicle in the fleet, companies can ensure that they are always dispatched to the most appropriate job.
In addition, fleet management can also help businesses to reduce their environmental impact. For example, by monitoring fuel consumption, companies can identify ways to cut unnecessary journeys and improve fuel economy. As a result, fleet management can deliver tangible benefits for your landscaping company's bottom line.
Expand Your Service Area
Expanding your service area as a landscaping company can help you increase profit in numerous ways. First, it will allow you to serve more customers. By simply casting a wider net, you'll be able to cater to more customers looking for what you offer.
Additionally, expanding your service area can help reduce costs by allowing you to pool resources and share equipment between jobs in different parts of town. This economy of scale could lower overall operating costs, boosting your profit margin.
How do you expand your service area without incurring more costs? We suggest conducting market research. This research is vital to any business decision, whether adding more services to your existing ones or expanding your geographical area.
Landscaping companies use market research to learn about the needs and wants of their potential customers. This information helps them develop products and services that meet the needs of their target market. Additionally, market research can help a landscaping company identify new business growth opportunities.
For example, if a landscaping company discovers a growing demand for organic gardening products, it may develop a new line of products to meet this demand.
Either way, it's a great idea to rely on data to figure out where to expand your business geographically and what kinds of services those new clients want.
As a landscaping company, one of the benefits of bundling services is that they can help you save time and money. You can offer your customers a comprehensive package that includes each service's benefits by bundling services.
For example, if you bundle lawn care and tree trimming services, your customers will be happy to save time and money by not hiring separate companies for each service. You can attract customers and retain them for extended periods by offering a wide range of services.
Furthermore, when you can bundle services together, you can avoid gaps in your schedule and better utilize your staff's time. As a result, you will improve your overall efficiency and profitability.
Are you investing in marketing? By bundling services together, you can also save on marketing costs. You can reach a wider audience with a single ad campaign when you market a bundled package of services. Therefore, bundling services is an effective way to reduce costs while still getting potential customers.
Invest in Customer Retention
The nature of a landscaping company means that customers are likely to need your services on an ongoing basis. If you can retain their business, you'll generate a significant amount of repeat income. In addition, happy customers are more likely to refer new business your way.
Therefore, it's essential to make customer retention a priority. There are several ways to support customers, such as providing exceptional service, offering discounts for loyalty, and staying in touch even when you're not working on their property.
Ultimately, it pays to also invest in your online reputation. Consider setting up a Google My Business account and encouraging existing customers to leave reviews. When people search for your local services online, they'll not only be able to view your professional profile, but they'll be able to automatically build trust with your brand through other customers' reviews.
An excellent online reputation helps increase a customer's trust and confidence in you as a service-based company. Other ways to improve customer retention include following up with customers when you know they're due for lawn maintenance or updating some landscaping features.
Reach out to them before they reach out to you. This proactive task will let customers know that you remember them and their home and are keeping track of how you can best help them with your services.
Get Started With Fleet Management
While the above tips are great for improving your landscaping company's profit, we think fleet management is one of the most effective solutions.
Tracking and managing your vehicles can help your landscaping company reduce fuel costs, improve route efficiency, and ensure that your vehicles are always properly maintained. In addition, fleet management can help you monitor your company's environmental impact and make necessary adjustments to reduce its carbon footprint.
Fleet management is a significant opportunity to improve your landscaping operations and expand your business. Are you interested in seeing what this might mean for your company? Learn all about how it works.