Saturated Market, how are you dealing with it?

Discussion in 'Lawn Mowing' started by kc2006, Nov 10, 2005.

  1. kc2006

    kc2006 LawnSite Silver Member
    Posts: 2,442

    So after reading all these posts lately about the saturated market we work in, and all the low ballers and how its ruining the market, I have a few questions. I just want to see what others think. And this is geared towards those of you that HAD/HAVE full intentions of being in this business for many years. Not the guys that are doing this to make it through college or just for a couple years.

    My area is saturated with new business, within the past 3 years I'd say there has been a huge boom of new business. I contribute it to the bad economy and the fact that our industry is easy to get in to with relatively low inital costs. The guy I used to work for was in the business for 20+ years, he was one of the original 5 lawncare companys in this area. Before I had intentions of going into this myself I used to ask him if he was worried about all the new companies and low ballers. He would always say "As long as we keep quality up we won't have a problem" I have found this to be true with my business. The lowballing is going nuts this year, but I would use it to my advantage. I had probably 10 potential clients call for estimates, I was higher on all of them. I could always "trick" the customer into realizing the situation and each customer would pause and say "you get what you pay for" and I would sign them on right then. They were happy to pay the extra. I've managed to average 50 dollars an hour (before expenses) mowing solo. So I personally think I've done pretty good this year.

    Now I see alot of people worried about this, some saying they're getting out of the business, some saying the market is just ruined, strangely I'm seeing alot of guys on the board with bigger companies that are getting worried to...they dont day it but I can just tell because of the posts they're making.

    So I wanted to honestly see who out there is worried about this, do you think there is a future with the green industry still? What are you doing to insure your going to still be with it making the same profit (Or better) then before?
  2. kc2006

    kc2006 LawnSite Silver Member
    Posts: 2,442

    I'm going to answer my own questions.

    I feel that I won't have a problem with the business. Theres always people that want good service and are willing to pay extra to get that service. I bank on these people. I also feel that it doesn't only take doing a good job cutting the grass to get more accounts. Anyone can cut grass good (if they try). I feel you have to go further. If you want professional profits you have to be a professional with every asspect. You have to have a good image, be business minded, and keep in touch with the customers.

    Like Runner said in one of his posts, the part timers (when i say part timers I mean people doing this all illegal, no taxes, no insurance, running fly by night companies. not those of you doing a good job running a legit business on the side of working full time) are only going to be in this business for 3-6 years probably, and then when they can't last anymore they'll be gone and there will be 2 for every one that left. I totally agree with that, but I don't see it hurting my business, we target 2 totally different clients and theres still enough people that want quality and can tell just from the companies image what quality is.
  3. roscioli

    roscioli LawnSite Senior Member
    Posts: 749

    I just came to the realization that the customer often wants someone who looks like they are just starting out, doing great quality work, but still cheap because they are trying to build their client base. How do you trick them into thinking you are almost as cheap as the lowballers? Dont drive a 2008 F-650. My truck was a 94 F-150, very simple, yet lettered up. People liked that, they saw I wasn't wasting their money on something flashy. They didn't like it when I bought my Lazer Z (getting too fancy, must be making too much money). Now, keep in mind, when I started mowing I already had the magic of lawnsite to keep my prices in line, so there was never a period where I was too cheap. When I started to market myself as an upscale company, the people didn't respond as much. They liked the idea of helping the kid just starting out. Make your customers think they are still helping you!
  4. 1MajorTom

    1MajorTom Senior Moderator
    Posts: 6,074

    I think to stay in this business for the long haul, you need to be diversified. (now I know there will be exceptions to this as there are some just mowing companies that do just fine, but they are not the rule). Being able to stay afloat when a drought sets in, or when a customer drops you for a lower mowing price is the key to being successful. Retaining walls, paver patios etc, if you have the know-how, are great ways to bring in more income, and the average fly by night more than likely will not be able to do these types of jobs.
    We will never rely just on mowing, cause just mowing in our area will not fully pay the bills.
  5. Nosmo

    Nosmo LawnSite Bronze Member
    Posts: 1,216

    For years across the country small operations run by Mom and Pop did pretty well as solos. They had fair prices and got along well with their customers.

    Along came a low baller and one by one the Mom and Pop operations fell by the wayside. As the low baller grew he invested a lot of his profits into expanding and became a giant . Sam Walton - Wal Mart

    Anybody know a friend or relative who had to close up because Wal Mart gobbled so much of the business a going out of business sale happened.

    Low ballers can be dangerous if they hang in there long enough.

  6. tiedeman

    tiedeman LawnSite Fanatic
    from earth
    Posts: 8,745

    I am jumping around to offer different services. As Jodi said, diversify. I still have high priced services, but just trying to offer current customers a little more attention
  7. bobbygedd

    bobbygedd LawnSite Fanatic
    from NJ
    Posts: 10,178

    adapt, adapt, adapt..........
  8. Scotts' Yard Care

    Scotts' Yard Care LawnSite Senior Member
    Posts: 343

    are lawnmowers or lawn maintenance if you will. We are not landscapers or applicators or any of the other branches of this industry. We are very proud of our business, the work we do and the reliability people can count on from us. This is our full time business and we treat it as such by paying taxes and being accountable to people in our area for better than twenty years. We advertise very little and depend on word of mouth and reputation to get us clients. This has worked well for us and is still doing so and the last thing I want to see is ANY interference or regulation other than the free market. We see the quick buck guys come and go and it will always be like this,hopefully.
    If they are not business minded then the market will sort them out and very quickly at that. The part timers bother us not at all because, by their nature, they can only do so many lawns and that leaves a lot for the rest of us. When they find out this is hard work and very competitive it suddenly loses much of its attraction and those who do stay become responsible members
    of the profession. Free America the way it should be.
  9. kc2006

    kc2006 LawnSite Silver Member
    Posts: 2,442

    Jodi, I agree about being diverse. I intend to move more into a "specialty" area of the industry as I call it. Landscaping, fert, tree trimming, hardscapes, pond installs. Basicly the more specialized areas that require more initial start up cost and not just anyone can do. I do like ponds and hardscapes so thats most likely where I'll head, but for now I want the business to grow and when its running smoothly then I intend on moving into a diverse field also.

    Bobby, please explain what you mean when you say adapt?
  10. Jpocket

    Jpocket LawnSite Silver Member
    Posts: 2,278

    Im not worried much because an established business doesn't just go under overnight. I will continue to advertise and grow, if things take a turn for the worst I should be able to see it coming, thus cutting back little by little. If things go good my business will thrive, if it goes back I'll be ready to BAIL.

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