No one wants to experience them, but bad quarters will happen as you operate your lawn care or landscape business. Sometimes a bad quarter is due to external factors utterly out of your control, like Mother Nature not delivering the snow you expected for the winter season.
Other times, internal factors like poor marketing strategies or failing to differentiate your business could have you suddenly struggling to retain your customers as other competitors offer lower prices or better service.
No matter what is causing your bad quarter, the last thing you want to do is wait around until it’s too late to change anything.
Monitor Your Numbers
Duane Cashin, owner of Cashin Sales, says that companies that are caught off guard by a bad quarter aren’t studying their metrics. He says even companies with $5 to $10 million in revenue need to build a dashboard that they can go over monthly or weekly.
“They can look and see how things are progressing and how they’re doing because that’ll give them a heads up of what’s going on, and therefore, they can use that information to make changes,” Cashin says. “Because the worst thing that we can do in life and business, as we all know, as Einstein said, is just keep doing something the same way, expecting it to be different. The other thing that’s a killer for small businesses is they guess a lot.”
Cashin says landscape companies can move away from gut feelings and guesswork by identifying the key metrics that are important to their profitability and efficient operations. These metrics include everything from monitoring expenses and costs to seeing if you are overworking or underutilizing certain employees.
He notes not to overlook aspects like how much is being spent on marketing and what is the ROI for those marketing efforts. For instance, if you’re a lawn care company that spends a lot of pay-per-click to drive inbound calls, how much is it costing to make your phone ring? You can figure this out by dividing the number of inbound calls against the marketing dollars set aside for pay-per-click.
Another metric Cashin suggests paying attention to is the cost of sales. What are your quotas for your sales reps? How much are they discounting services, if at all, and are those discounts eroding your profitability? Is your sales team bringing in quality customers, or will they have zero loyalty beyond pricing and be a pain to work with?
How much are you paying your commercial sales reps in salary and commission? Maybe your commission rates are too high, or they’re too low and not motivating your sales team. Cashin says you must determine what motivates your sales team, as it’s not always money for some people.
Many employees want to work at a company where they’re respected and treated as a professional, where their voice matters and where they can grow.
“If you keep throwing money at them, it’s not going to get any higher level of performance out of a sales rep that feels that way,” Cashin says.
Responding to Internal and External Factors
If the lights on your dashboard do start indicating a problem, how your company responds will depend on whether the root cause is internal, external or a mixture of both.
The good news about internal factors being the issue is that these are elements within your control. If your promotion or discount for a certain service isn’t resonating with clients, you can dig into whether you’re targeting the right demographics, using the right channels, and more. Cashin says landscape companies also need to work on differentiation because it is a crowded market and often customers can get focused on price alone.
“One of the challenges is that buyers often don’t really think that landscaping and lawn care companies are that different from the other,” Cashin says.
Another possible internal issue could be equipment going down constantly, causing the team to miss their production deadlines. Having the necessary parts on hand for these breakdowns or having another machine on standby can help remedy that kind of problem.
If it is external issues, like poor weather or an economic slowdown, Cashin says businesses may have to lay off some people or cut back on their operations.
“They have to look at how can they streamline the operation and reduce costs,” he says.
He says another way to become more efficient is to involve technicians in your sales process by having them observe and identify opportunities at the properties they visit.
“In many cases, if they’ve been on that route for six months or so, they know the owners,” Cashin says. “The owners trust them. The technician identifies the problem, brings them over, shows them or takes a picture and shows them they can handle it right now. That’s efficient.”
If it is a mixture of both kinds of factors, Cashin says that companies need to try to address all the issues they can at the same time. This is why it’s important to have these tracking mechanisms in place so that if something starts going off the right path, it’s identified quickly, not one to three months down the road.
Turning Things Around
Even if your landscape company responds immediately, Cashin notes things won’t get better at the switch of a button.
“It’s like if we’ve got a bad sinus infection,” Cashin says. “We’ve got to take antibiotics probably for seven to 10 days, right? You don’t just say, ‘Oh, I got a sinus infection. I know what it is. I’m going to take one pill; bam, it’s done.’ You could be suffering for 10 days.”
He says being proactive is key. While each situation will call for a case-by-case solution, having leaders in your departments and holding them accountable can allow your business to adjust before things get dire.
“You need to have systems and processes in place,” Cashin says. “Just as a pilot who’s flying and all of a sudden the weather gets whacko, the plane’s bouncing all over the place, they’ve prepared for that. They trained for that. They have a process for that. They don’t whip out the manual at that point and go what are we going to do?”
