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View Full Version : Can you diversify too much?


doug1980
06-30-2009, 05:41 PM
So I have just restarted my business, going in a different direction, but plan to grow. I hope. For now I plan to mow and do small cleanups etc.... After we move to our final location I want to take it full time and offer more services. I would like to keep the mowing and add chemical applications (fert, indoor & outdoor pest) also in my 5-10 year plan I would like to add landscaping and possibly a small nursery/greenhouse for my wife to run. It all sounds good, but it is all very costly and will have lots of overhead. So my question is....Is it better to stick with just a few services or go all out? I have heard stories on here about that fine line, as in you can get so big then hit a point where you either have to stay where you are or must go way big. And others that got to a point where they were forced to downsize or went under.

mdlwn1
06-30-2009, 05:48 PM
At the very beginning..if you have to..take whatever you can get obv. As you grow.... slowly you might want to consider specializing to control overhead and general costs. The chem apps is a great thig as well as pruning, weeding, etc...Anything you can do to keep billing while on the same property. Performing too many different services can and often leads to inefficiancies that lower your profit margins. There is a rare breed of person that can make money with good margins off many types of work.

shovelracer
06-30-2009, 06:29 PM
Agreed. Too much diversification early just leads to increase costs without the return needed to be healthy. And yes there is a line. Single crew or 50 your choice. Problem is you cant manage 3 crews, collect bills, run estimates, etc very efficiently unless you have real good people. Problem is people come and go and the middle sized guys cant afford to hire managers and office staff full time. So as a result you the owner get spread so thin that quality suffers because you are always fighting to keep costs down and collect the next dollar. It happens all the time. Look around at companies that have been around 20+ years. Not too many running 2-4 crews.

bohiaa
07-01-2009, 06:06 PM
My friend, going all out is one thing, however it's NOT done in one day.

go talk to people, people in the shape you wish to be in. they will tell you it took YEARS.

some may even tell you it took generations....