The landscaping industry reached a market size of over $105 billion in 2021. Even though there are more than 600,000 landscaping companies vying for customers nationwide, there's still room for strong growth.
The industry is booming, and there is a high demand for landscaping 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 ways to improve operations, reduce costs, and increase revenue/profits.
How to Improve Your Landscaping Company's Profits
The first question to ask is, "Are we missing out on profits?" The good news is that there is always room for improvement and growth in business.
Making your business procedures more straightforward can have a significant impact on profitability. You can improve your bottom line by making processes simpler and eliminating wasted time and resources.
In addition, efficient business procedures can help to improve customer satisfaction by providing a better experience. Here are a few tips on how to accomplish both.
1. 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 fuel for your vehicles and equipment, to labor, 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 on a regular and frequent basis.
In addition to tracking expenses on materials, supplies, labor, fuel, other transportation costs, and marketing/advertising, it's also important to track gap time in your schedule and idle time at job sites (vehicle, equipment, and labor) as this is time that can be put to further reducing costs or increasing the number of jobs per day.
By tracking these expenses regularly, 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.
2. Diversify Your Client Base
Now, it's time to diversify your client base and offer more services. You can diversify your client base in several 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 to add commercial clients. 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 expand the services you offer. In addition to traditional landscaping services, you could offer snow removal, holiday lighting installation, or landscape/hardscape design. By providing various services, you'll be able to appeal to a broader range of clients.
3. Shed Unprofitable Services
Once you've analyzed your service costs against revenue, it's time to eliminate the services that don't generate a profit for your business going forward.
For example, let's say you offer water feature design and installation. It costs you a little more, but in the past, there have been good sales and profits. Recently, though, you've seen a decline. Run a quick promotion to see if business picks back up. If it doesn't, it may be time to stop offering the service. Focus on offering services that bring in the most profit and have the highest demand.
4. Maintain and Replace Your Equipment
Landscaping businesses have a wide range of overhead costs, from gasoline for the lawnmowers to the cost of maintaining a fleet of vehicles. It's often tempting to delay and/or defer maintenance.
One way to keep equipment operation costs to a minimum is to keep up with your DTC codes, maintenance schedule and upgrade your equipment when it's time. Investing in new, more efficient machines can save money on fuel, maintenance costs, and other operating expenses.
You might also consider switching to green equipment to meet changing compliance regulations.
5. Consider GPS Asset Trackers and a Fleet Management Solution
GPS Asset Trackers can add significant value to your business in the form of real time location mapping so you always know where things are, theft prevention, and theft recovery.
The top GPS Asset Tracking solutions, especially the ones tailored for landscaping businesses, also provide additional benefits such as customer proof of service, geofencing, unauthorized use, DTC code notification, and maintenance schedule alerts.
Imagine if you're able to place a GPS tracker in all of your landscaping company's equipment. You can track the equipment as it goes to each client location.
You can also identify issues more quickly. For example, if one vehicle works at 25% lower efficiency than the others, you can learn if workers are not as productive, is the equipment in need of maintenance, repair, or replacing, or is it something else?
If you want to take things a step further, consider using a fleet management system tailored for landscaping businesses.
Even if you have a smaller number of vehicles to schedule and coordinate, the right fleet management solution can actually pay for itself, and more, on a monthly basis. Stronger solutions can deliver anywhere from 4x to 13x return depending on the number of vehicles.
Fleet Management ROI is done primarily by improving business efficiency. By tracking the real time location and status of each of your vehicles, you can ensure they are always dispatched to the most appropriate job.
In addition, the right fleet management solution can also help businesses to reduce their environmental impact. For example, by monitoring fuel consumption, landscaping businesses can identify ways to cut unnecessary journeys and improve fuel economy.
6. Expand Your Service Area
In addition to expanding landscaping services (such as adding commercial to your residential business) expanding your service area allows you to get more mileage out of customer ratings and referrals in your marketing efforts.
Start with some basic market research. You can evaluate areas that are adjacent to your current service footprint, or look for potential customers in other parts of town who have similar needs to your existing landscaping customers. For example, if you provide design/hardscape services and it is becoming popular in another part of town, consider expanding to that area.
7. Bundle Services
One of biggest benefits of bundling landscaping services is increased business from customers. This can come in the form of seasonal packages or special annual offers. For example, bundling lawn care and tree trimming services (if you offer both), steers customers away from working with a different provider. There will be price shoppers, so it's important to make sure your bundling is competitive.
In addition to increased business, service bundling can help avoid gaps in your schedule and better utilize your staff's time. Service bundling also helps to make your marketing more effective. You can reach a wider audience when you market a bundled package of services.
8. Invest in Customer Retention
In any business, customer retention is key. It's especially important in highly competitive industries like landscaping. It's no secret that keeping existing customers happy (and referring new customers to you) is essential to your business health.
It's also hard work. In addition to providing attentive service, loyalty discounts, and simple check-ins between services to gauge satisfaction and probe for additional business opportunities, landscaping companies also invest in their 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. It also gives you an opportunity to quickly respond to reviews (both good and not so good). This shows potential customers that you are service-oriented.
A major key is staying in touch. 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.
9. Add Fleet Management And Asset Tracking
For a landscaping company, a fleet management and asset tracking solution that is tailored to the landscaping industry can both save costs and increase revenue.
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.