Expansion Problems

Discussion in 'Lawn Mowing' started by PRECISION LC, Jan 18, 2003.

  1. PRECISION LC

    PRECISION LC LawnSite Member
    Posts: 145

    I have been thinking of expanding, just like most other companies, but i can't decide what would be better to taret. This is my fourth year and have been fortunate in picking up some awsome residential customers, but no commercial. As many threads I've read i beleive that having more commercial properties is were more money is. So what would be better to expand with, commercial or more residential?
    Thanks,
    Kyle
     
  2. grshppr

    grshppr LawnSite Senior Member
    Posts: 301

    I purchased my company 4 years ago, and have pushed to increase my residentials. I think you can make more on commercial properties, but they are easier to be "undercut" on. I find residentials you can count on year after year. You get to know them well and even if someone comes along with a cheaper price, I knw they won't cancel on me. Since I bought the company our list of residentials has doubled.:D
     
  3. PR0 TURF

    PR0 TURF LawnSite Bronze Member
    Posts: 1,089

    I agree with Grasshopper

    We're very happy with our residential clientele. They tend to rely on you year after year, & in come cases you build somewhat of a relationship with some of them. Of course there are the exceptions to everything. Commercial vs. residential...each has there pros & cons. I think commercial is more cut-throat than residential...but also more profitable in most cases. You've just gotta find your niche.

    We are content with our residentials & don't find ourselves going after commercial properties...however when we get calls for commercial bids we never shy away.
     
  4. matitude

    matitude LawnSite Member
    Posts: 49

    I would say continue to build up your residential base, they are much easier to retain year to year. It also will allow you to purchase the larger equipment that will be necessary to compete in the commercial market.
     
  5. fblandscape

    fblandscape Banned
    Posts: 776

    High end residential is the place to be. Those lead to the commercial places... because when working at the high end residentials... you usually are working for executives of those companies you want to work for. That is a far better way to go in my book than to just service commercials.
     
  6. Shuter

    Shuter LawnSite Bronze Member
    Posts: 1,171

    I also agree that commercials are more money. I only have a few because in the long run, you will make more money with residential properties, especially if you offer many services. Once you take good care of homeowners and they realize how they need you, they usually stay. I have one neighborhood that I have 12 accounts in, most from word of mouth. Try gaining more accounts in neighborhoods where your exsisting accounts are.
     
  7. Equipguy

    Equipguy LawnSite Senior Member
    Posts: 370

    I like a mix of both Res and Comm. I have one Home Owners Assn for 8 years and one Condo Assoc for 5 years. Both have generated other comm and res business. My goal was to get to the point where I picked them not the other way around. It's worth the effort in the long run.
     
  8. AL Inc

    AL Inc LawnSite Bronze Member
    Posts: 1,218

    I agree with ffshuter. I found that high end residential is more profitable than commercial. I try to be as full service as possible for my homeowners. We take care of the lawn, pruning and clean-ups, clean the gutters, do any new plantings and mulching, put up new fencing if necessary, etc. We also do the snow removal and odd jobs in the winter. These people depend on me and, for the most part, come back year after year. You don't get that loyalty with commercial. The gross sales numbers may be higher with commercial, but I don't think the net is as high as with residential. JMO , Mike
     
  9. Lawn277

    Lawn277 LawnSite Member
    from Iowa
    Posts: 74

    I have found out that Condos and apartment complexes are the best payers. If you deal with Condo people make sure you have one contact person, since they are all owners you sometimes seem to have 15 people that want 15 different things done.
    The residental customers are usually always faithful as long as you treat them good,whereas business are always looking to save a buck or two and you have to lower your price or rebid once in a while to keep the account. I send out letters every Febuary to all my customers asking if they want me again for the next season, I always include in the letter that some people will see a slight price increase due to rising cost of fuel, dump fees and supplier price increases. Then I can raise the ones that need to be. But only by about 10 to 15% They all have understood so far.

    Thanks Rick
     
  10. PRECISION LC

    PRECISION LC LawnSite Member
    Posts: 145

    Thanks for all the advice, I am starting to see what you all are saying, this really helps me. But a side question, would you offer a discount to gain a percentage of a high-end residential customers?
    Thanks Kyle
     

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