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Old 01-03-2008, 06:53 PM
Dynamic Dynamic is offline
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Join Date: Dec 2007
Location: Belleville, Ontario, Canada
Posts: 147
Advice on add-ons

At what point do you stop trying do do more add ons for your business. I am currently a complete lawn care business in my third year and I have never done any real landscaping jobs. I would like to increase business this year that starts in April (Canada Eh!) and I have been thinking strongly about lighting but wondering if that only works with interlocking stone applicators. Is there any other advice as far as what should be taken on instead or just good advice? Thank you.
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  #2  
Old 01-06-2008, 11:36 AM
koster_irrigation koster_irrigation is offline
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Join Date: Aug 2003
Location: Wilson, NC
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Irrigation
Lighting
Drainage
Hardscaping. Patios & Outdoor Fireplaces
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  #3  
Old 01-06-2008, 12:57 PM
AGLA AGLA is offline
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Join Date: Mar 2002
Location: Cape Cod
Posts: 1,680
The first two reasons to add on services is to fill your schedule and sell products. Most people are eventually limited in how much schedule they have to fill based on their ability to manage help. That means that you can't expect that you will just hire more guys every time you have more work. You'll find that it is darn hard for most people to find employees and much harder to keep their productivity high enough to both pay them well enough to keep them and remain competitive to sell jobs.

Adding on services that sell product is good because it is pretty simple to order, receive, and mark up products. It is more dependable than hiring and managing help. If you can not manage a lot of guys (most of us can't) and deal with it in a realistic manner, it is better to avoid adding on any more services than you need to to keep your schedule full. It is better to concentrate on services that move a lot of product that has a healthy profit.

Some guys who started out mowing lawns keep finding more services to sell. The used to mow with two other guys, a pickup, trailer, and mowing equiment. Fifteen years down the line, they have a pickup, trailer, mowing equiment, two dump trucks, chainsaws, plate compactors, cutoff saws, hydroseeder, bark blower, skidstear, mini-x, dingo, dethatchers, sod stripper, rototiller, gas powered pole saws, a lease on a thousand square foot contractor's bay, and still only two guys working for them. Those guys spend three days mowing each week, all spring and all fall doing cleanups, and scrambling around trying to do all the other odd jobs that the company picks up to try to "get to the next level". All that has happened is that the overhead is high, the schedule is reactive, and the help does not know whether they are coming or going.

I've seen other guys who started that way, realized that they could only hire and manage a few guys efficiently and learned to cut out less profitabe services and concentrate on selling products and the services necessary to sell them. In most cases that has been landscape construction. The products are plants, hardscapes, and pools in some cases. They sub out things like fences, bark blowing, hydroseeding, and even larger sod installs. These companies keep their help focused on their areas of expertise keeping them efficient. The result is that using the same amount of help, the overhead is much lower, the jobs are done much faster, and the quality of workmanship is high all across the project. That means the company makes a lot more money and gets better jobs because they are done faster and the work is top knotch. They moved from selling services (labor hours) to selling product (custom product installed on site).

Think about adding services that will set you up to have steady work moving lots of product in your market. Maybe that is lighting, but not if it is going to be something you can sell two or three times a year. It would be better to hire that out to someone who does it every day if you can be more productive in another way.

You typically need specialized equipment for most add on services.That means overhead. The more billable hours you spread the cost of that equipment purchase over, the more money you are making per hour of its use. If you fill your barn with a lot of part time equipment, you are throwing money away. The best services to offer are the ones that you can dedicate a crew to and have them work on a full time basis. The worst are ones with expensive equipment that sits still most of the time.
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