Adapt to Economic Changes

Diversify Your Services
When the economy isn’t hot, it might be wise for your landscaping business to start offering more services. “The concept is: ‘If I’m doing a service for a homeowner now, then what if I can offer more?’” says Ted Corvey, director of paving operations at Pine Hall Brick in Winston-Salem, N.C. “We’re seeing a lot of contractors broadening their scope.”

If you offer more services, you can raise the average amount of sales per customer, he says.

“When things are hard economically, that’s when the creativity comes in,” says Joe Densieski, president of NuGreen Landscaping Inc. in Riverhead, N.Y. When Densieski first formed his company, he specialized in landscape construction and maintenance, as well as offering snowplowing, which added revenue during the offseason. He ended up selling his maintenance division, but says he is considering going back into landscape maintenance to rediversify his business and increase sales.

The possibilities for expansion are practically endless, Densieski says. Landscapers can grow into landscape lighting, tree removal, small excavation, masonry, segmental paving, hardscaping, sport court construction, snowplowing, salting, pond and waterfall construction.

If you decide to widen your services, make sure you’re educated about the service and know what you’re getting into. “Don’t assume that just because you saw someone else do it, then you can do it,” Corvey says. “Go and get properly educated about the service you want to do.”

He recommends an apprenticeship or other hands-on training, which a trade association might offer. For example, the Interlocking Concrete Pavement Institute (ICPI) provides educational, technical, installation, business and marketing resources for its contractor members. Trade shows and manufacturers can be great resources, as well.

Another strategy is to offer higher-end landscaping services that target the wealthier segment of the population. “When the market is down, customers focus on improving existing dwellings instead of moving or building new ones,” Corvey says. “There’s always going to be a certain segment of people that will have the money to do it.”

Jumping in too fast, however, can lead to failure. “The road has been littered with contractors who weren’t ready,” Corvey warns. “They expanded too quickly and got into cash flow problems, or they didn’t yet have the skills to be able to perform up to the customers’ expectations.”

Work Strategically
Knowing your business inside and out will help you increase your profit margins, which will help you weather an economic downturn. “As a general rule, you want to work smarter, not harder,” Corvey says. “You need to understand your costs better, and then control them without cutting quality. That’s the best planning.”

Working smartly might mean turning down a customer who has been problematic in the past. “A homeowner can keep giving verbal change orders, and if you don’t get compensated for the extra time that you put in, then it might not be worth it,” Corvey says. “You need to understand the difference between the jobs you make money on and the jobs you lose money on.”

Get the Word Out
Targeted marketing is a smart way to survive an economic downturn, Densieski says. This might mean opting for a direct mailing instead of a newspaper ad, but if you know your customer, you can spend your money smartly, he says.

As many landscapers know, word-of-mouth is the best marketing tool. That means the best thing you can do for yourself—in good times and in bad—is to create a trusting relationship with your clients. “Don’t burn your bridges because, when things are tight, that’s when people remember,” Densieski says. “If they weren’t treated right by you, then they’ll go somewhere else.”