Big decision....could pay off.

Discussion in 'Business Operations' started by Chilehead, May 12, 2014.

  1. Chilehead

    Chilehead LawnSite Bronze Member
    Male, from Stockbridge, GA
    Messages: 1,968

    I have been pondering the idea of removing landscaping, hardscaping, and irrigation installs from my service menu and specializing in grounds management only. I have noticed my margins declining in the design/build sector due to a number of factors, but grounds care has actually gotten better for me despite rising materials costs (and I have learned to enjoy it more).
    Anyone who has read Jim Collins' book, Good to Great knows about what is referred to as the "hedgehog principle": find what you're best at, and focus on nothing but that. Companies who have done this (in the book) went from good to great, where those who were jacks of all trades to everyone ultimately had challenges (some failed completely).
    For me, I feel that positioning my company as a full service grounds management firm that specializes in nothing but grounds management could be a great move--I certainly have the education, experience, and drive to make it happen. What I don't have is the insight from others--you, my trusted colleagues here on Lawnsite. If any of you have ever made a jump like this, please post about it here.
  2. TPendagast

    TPendagast LawnSite Fanatic
    Messages: 11,080

    For over a decade I have continually counseled "do what you do best, sub or refer the rest".

    However there is some mileage to the "Full service" landscape company, but they are sully owned by a businessman (who IS doing what he does best) and has department heads who run specific service (who DO what they do best)

    I began my 'career' in maintenance.
    To avoid a long/story post, I got bored with something I was really good at.
    sold out and wanted to try installs (GOSH I couldn't seem to sell installs , much, in new england.)

    so I did just that.

    In the process I learned that I wasn't a very good mason (I don't consider block work masonry)
    and Im a dismal carpenter.
    However, Im really good and design and sales and expediting (knowing what crews and craftsmen need and getting it to them in a productive manner.)

    I am also very good at design/install/troubleshooting irrigation.

    As a result, I like to focus on subbing out Irrigation and Management to other companies on a project by project basis, as well as Design/Sell my own stuff, in which I frequently (but not always) bring contracts to other companies for joint ventures…. to fill the crack, I moonlight a little as a operations consultant (mainly focusing on maintenance).

    The downside to this is also the upside: Not having my own full time employees around in large numbers.
    When I need a crew I usually hand pick them and put them together on a case to case basis, sometimes projects last a few weeks, sometimes a few months.

    I also help companies find good fits with employees I have worked with in the past as result, Kind like an employment broker, but it's not actually something I'm getting paid for (I should find a way to collect a finders fee, huh?)

    I often find myself picking up maintenance routes for a while (old bad habits die hard) , mostly to stay sharp on things and try different operations/approaches and then hock them off on other companies capable or wanting to handle the route. (Is kinda an ADD thing with the maintenance, really…like trying to kick a smoking habit, unsuccessfully…GAWD I love mowers)

    But freelance Design/Sales has worked really really good for me. Sometimes Ill even take a job with another company for a temporary fit, deliberately to hire/train a replacement (If/when sales are down)

    When my kids get older… Ill probably restart a full maintenance division, with them doing the work.

    But until then, Im pretty happy focused on Design and Irrigation (I did get interested in out door lighting but DANG if I can upsell that more than 2 times per season)

    for YOU , doing JUST maintenance can really pay off, especially if you team up with a Design/build only company or two. You can refer inquiries from your customers to them, and they can hook you up with lead ins for maintenance (what they are installing will need maintenance once it's installed)

    Ive seen some maintenance companies pick up some really nice big commercial work, doing just that.

    My Ideal Job would be working for a company that let me run a special project division, where I did warranties on installs, Patios, Outdoor Kitchens, Irrigation , Water Features and Lighting, and left me alone when it came to lawn mowing, lawn installs and anything resemble plants (although I'm very good at diagnosing plants, and running lawn crew ops… I find it distracting from things Im really passionate about….which is really WATER, LIGHT and ROCKS)
    Unfortunately, I have pitched this division a few times, but never found a good fit with a company willing to do it (well I did once, but the company owner was a megalomanic and I knew it wasn't going to work out…but his company did have the slot for growth in specifically that)
  3. Chilehead

    Chilehead LawnSite Bronze Member
    Male, from Stockbridge, GA
    Messages: 1,968

    I like that, T. One of my main challenges is acquiring qualified labor. I define qualified as anyone who is teachable, and able to execute what is taught.......quite hard to find these days. I am tired of spreading myself too thin with all the design/build work that comes my way, and then try to get it completed in a timely manner amid all the maintenance. I'd rather just do maintenance. Not to brag, but nearly all my clients who purchased maintenance services have raved about them. I receive thank you letters every month. Landscaping is enjoyable, but grounds care is my God-given talent and passion, which is one of the reason's why I need to make the jump. I've subbed in the past, and was very disappointed with the results. If I go grounds care only, there will be NO restarting design/build in the future with the exception of a possible hardscape in the winter when it's slow as cold molasses.
  4. ryde307

    ryde307 LawnSite Senior Member
    Messages: 540

    We made a similar decision this season. We dropped landscaping in house. We still sell it and sub it but the prices went up and if we don't get the job we are not out anything. If we do we make 15% or so and the sub gets paid well also. We do grounds maint, irrigation and snow is our main focus. At the end of the day the money invested into the landscape side of things, along with the managing of it was not worth the return. We had a choice to go bigger with it or get out. At this time we got out.
  5. Chilehead

    Chilehead LawnSite Bronze Member
    Male, from Stockbridge, GA
    Messages: 1,968

    This is where I am at, but don't want to sub anything out. I'd rather be done with it altogether and focus on what I do--not have to manage what gets subbed out. Thanks for the input.
  6. Efficiency

    Efficiency LawnSite Bronze Member
    from zone 6
    Messages: 1,851

    whats your unique selling proposition? Personally, I wouldnt go into a comoditized business like that IMO.
  7. snomaha

    snomaha LawnSite Bronze Member
    from midwest
    Messages: 1,269

    I think Buffet was once quoted as saying "good business owners say no to alot of things, great business owners say no to almost everything".

    I know when I first started out I said yes to any request. As a business evolves and you have past history with financials, I think it is common to start to question whether some things are worth doing.

    I walked away from 200k of HOA work last year after reviewing numbers - the opprotunity cost of servicing that particular low margin work was killing us. With labor tough to find and retain in a seasonal market, focusing our efforts on what drives the most to the bottom line really moves the needle.

    Sounds like you have thought it through - congrats on the direction of your business.
  8. Chilehead

    Chilehead LawnSite Bronze Member
    Male, from Stockbridge, GA
    Messages: 1,968

    I've got many solid connections that lead to quotes all the time. Acquiring new work is cheesecake, but my niche is ultra high-end residential accounts. I've got some I reel mow twice a week along with full service shrub maintenance, bed maintenance, chemical programs, mulch, and annual color twice a year. I tend to stay away from commmercial work....doesn't let me showcase my talent like I want to.
    Posted via Mobile Device
  9. GMLC

    GMLC LawnSite Platinum Member
    Messages: 4,345

    We made the switch to "grounds maintenance" a few years ago. We specialize in high end residential and commercial properties. Our commercial properties are doctor's offices, dentist's, vet's, independent resturants, etc. Businesses that care about quality. All my irrigation, chem and hardscape gets subed out which gives us around 10-15%, all profit. We are essentially full service as I bill out everything and my clients go through me, not my subs. We get to concentrate on what we do best which is grounds maintenance.
    Posted via Mobile Device
  10. grassmasterswilson

    grassmasterswilson LawnSite Platinum Member
    from nc
    Messages: 4,988

    I only do mowing and applications and the work that comes with them(mulch, prune, etc.).

    I've often considered going apps only but in a way I need the mowing to support the family. I do to think I could do apps solo and generate enough income. The mowing brings the aggravation and call backs, but also allows me a steady income that keeps things mowing. I just need a few very good guys to out in that division and set them loose.

    Mowing work comes easy once your in the area and I often get a few new ones from app customers without even trying. Especially this season, I've added another guy and have tried to figure out how if it's possible to run 2 crews if I could get out and pick up a few more.

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