How to Operate a Landscaping Business During a Recession
Operating a landscaping business during a recession can be difficult considering it’s not just your business that is being affected, but also your customer’s ability to spend on your business.
Economic recessions were one of the major concerns of landscapers in 2021, and in 2022 they now find themselves dealing with inflation of prices, including fuel costs that are up by 50%, and wages are on the rise as well. Add in the shortage in supplies such as many kinds of plants across the country, it’s looking like it could be some difficult times ahead for the landscaping industry.
With a recession looming, or by many accounts, already starting, landscapers need to adjust their business to react. However, it’s important to not react in a way that is going to hurt your long-term business goals but mitigate any impact a recession might have. It’s entirely possible to come out of a recession as if nothing happened, and have a thriving business. And during this time, you may find things about your business that you need to improve on, regardless of the economic situation.
Lean into your relationships with everyone
One of the biggest mistakes landscapers can make is cutting down on communication. And that doesn’t mean with just customers, that means everyone your business needs to thrive. Homebuilders, contractors, managers of properties, suppliers, and customers are all relationships you need to continue to lean on heavily during these times.
It’s important to maintain these relationships so you minimize the surprises that could come your way, such as a homebuilder slowing down new builds, a contractor looking to move out of the business or raising prices, and customers that might cancel their service.
The more you speak with those involved in your business, the better of an idea you’ll have about where things are going in the future, and
Don’t start axing necessary expenses to save money
You will often here during a recession that many businesses need to tighten their belts and trim some of the fat. While it’s important to understand all your expenses and where your money is going, it’s not a time to panic and start cutting necessary expenses your business has.
For example, decreasing your marketing spend might like a good idea to cut down on expenses, but it’s a short-term decision that could have long-term effects on your business. How will you get new clients if you aren’t marketing your business? While it may be time to evaluate your marketing efforts and see exactly where your leads and customers are coming from, cutting the spend on marketing may actually harm your business more in the long run than the dollars you are spending on it.
If you have a deep understanding of where your leads are coming from, such as social media efforts, trade shows, and advertising, you can then adjust and put money into the marketing efforts that translate into leads and customers.
Focus on making the people you have more efficient
During a recession, layoffs generally happen and hiring stops. With a labor shortage already, and landscapers struggling to find workers, many landscaping companies aren’t in the position to start laying off their people.
Rather than letting people go, focus on making them better. That may mean spending time on extra training to make them more versatile, such as using larger machines they haven’t used before, or managing their own crew.
It’s also a great time to utilize technology for job management to improve how they work in the field, such as better routing for your crews to get them to and from job sites, and giving them mobile applications to quickly complete work orders and timesheets so they can move onto the next job. Analytics will help you dig into your workforce and fix the issues that are costing you money without having to let go of good working hands.
Start to analyze your business
With companies that have lawn maintenance and construction design and build projects as part of their service offerings, it’s a great time to dig into the analytics behind those services and make sure none of them are losing you money. If you are going to cut things from your business, make it be loss leader services that aren’t either getting you new clients or are generating a profit you find acceptable.
If you are spending too much money renting equipment for one-off style jobs that are not part of your normal service offerings, cut them from your business. Don’t take a loss just because you offered the service before unless that service brings in higher paying customers.
It may also be time to look at the area in which you operate and reduce the distance you will be willing to travel to clients in order to reduce gas expenses and the time your crew isn’t working by driving out to those locations. If you know exactly how much each of your services is making through reports and analytics, you can keep the services that keep you in the green, and cut the ones costing you money in the long run.
Continue to invest in your own business
Along with continuing your marketing and training efforts, it’s important that landscapers keep investing in their business. It’s important to make smart decisions in the investment opportunities, but you don’t want to just stop working on scaling your business.
Look for things that are going to give you an advantage over your competition and an advantage over the recession. Landscaping software will give you the tools to dive deep into your business and see where you can improve, and where leads are coming from, help you manage your landscaping sales pipeline, and offer efficient ways to improve your crews’ performance.
As you look to try to make you business as recession proof as possible, the truth is, you can definitely come out on the other side looking better than when you went in. Those who continue to focus on strengthening their business and adding resources and tools to be more competitive and efficient, will not only weather the recession storm the best, but also put themselves in a great position to scale faster on the other side.
Contact DynaScape today and see how our Manage360 software can help you get through tough economic times and strengthen your landscaping business