Inflation is causing massive problems for small businesses, which includes landscapers. Costs are rising and interest rates haven’t stopped growing. It has created a difficult environment not only for landscapers to work in, but also for their customers to afford the landscaping services they were once purchasing.
Workers are looking for higher wages to help combat inflation in their home, which is driving up expenses for landscaping businesses that are already struggling to find workers. Even the most entry-level jobs are seeing increases in wages. When you couple that with the rising costs of doing business from suppliers, owners have to find ways to cope with inflation in order to keep their business turning a profit.
There are a number of ways landscaping businesses can fight inflation and maintain profits. With pros and cons to all options, it’s a difficult decision, so owners will need to choose wisely.
Upsell Services by Offering Bundled Packages
It may seem obvious to try and sell more services to increase revenue. However, upselling a package of services does two specific things; increases revenue for each client who purchases them and decreases some of your operating expenses, such as the cost of driving.
If a customer has already hired you to cut their lawn, then adding on pressure washing, weeding, or pool maintenance is a way to keep your crews at one location longer. In turn, the revenue per customer increases while driving expenses may decrease. In fact, bundled services can be completed in less time because the crew is already on-site with easy access to equipment. It’s one set-up time to complete multiple jobs, as opposed to having to reload equipment and move to another location.
With more options, customers may also stay with you because of the value they get from your service. Diverse needs make you a one-stop shop and if they need to cut back on a service, you have multiple services with them to fall back on.
Find Areas to Start Cutting Expenses
Reducing expenses may just be a necessary issue. The problem is that the first thing people think about when thinking of cutting costs is – reducing wages or firing staff.
Cutting expenses doesn’t have to be that. It may just mean you need to look at your business and make changes in how you operate. For example, examine how your business would run with your staff working remotely. Do you need in-office staff or can certain people work from home? A reduced staff in the office may allow you to reduce the size of your office space, which reduces rent, utilities, and office supplies. It also has the additional effect of making staff happy that they get to work remotely.
It’s also a great time to look at subscriptions to services your company may use or be paying for. Dig into your management software and get a better idea of your expenses. Perhaps the dump runs you are doing every day or week is costing too much and it would just be cheaper to buy your own dumpster.
Raise Your Prices Slowly and With Full Transparency
Customers never want to hear that their landscaping service is going to cost more. But the reality is that you may need to raise your prices to cope with inflation. How much you raise your prices may mean you need to do it slowly over time and not all at once so as to shock your customers.
If you have cut all unnecessary costs, increasing prices may be all you have left. Try to impact your customers as little as possible and be open with them through correspondence that their rates will increase at a certain time. Convey to them that the quality of the service won’t suffer. However, be sure the quality doesn’t decrease because a customer will leave quickly if they notice their rates went up but the services they are paying for are not at the same level they had once before.
Analyze the Services You Offer
One of the main Key Performance Indicators to be looking at while coping with inflation is profitability by service type. Many landscaping businesses offer a large variety of services and some even offer specialty services. It may be time to branch out or reduce the number of services (or service areas) you offer.
During this time of inflation, you want to focus on the services that are generating you the most revenue. If design/build projects are earning you more revenue than your maintenance program, it may be time to move off that service temporarily if it’s not driving enough revenue. That way, you can reallocate your crews as needed to focus on the services that generate more revenue.
On the other hand, there may be services you don’t offer that could be easy to start with that have little start-up costs and large margins. It’s time to dive into your business KPIs and see what’s really going on.
It’s Time to Boost the Efficiency of your Business and Automate
Coping with inflation can be challenging, but it’s also a time to really dive into your business and see where you can make adjustments. Are you spending hours on manual tasks that could be easily solved with landscaping management software? By finding more efficient means of either delivering service or reducing manual tasks for your office, you can find more time to take on other jobs.
More efficient companies are automating their workspace in order to focus more on the services they deliver. With a cloud-based landscaping management software like DynaScape’s Manage360, you can let your office work remotely, while having the management tools to run your business completely.
See how DynaScape can help your business become more efficient and cope with inflation creeping into your business. Schedule a demo today to learn more about Manage360 and our assortment of landscape design software solutions.