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A Successful Business Workshop
On Friday, November 9, 2012, the NOFA Organic Land Care Program hosted its fourth advanced workshop, titled Business Essentials: Pricing and Marketing your Landscaping Services for Success. The half-day workshop was held at the Connecticut Forest and Park Association in Rockfall, CT. Frank Crandall of Frank Crandall Horticultural Solutions in Wakefield, Rhode Island began the first presentation about pricing and estimating organic versus conventional lawn care services.
Frank started out by reviewing the fundamentals of profitable estimates, and then went on to compare the pricing of organic, transitional, and conventional lawn care programs over a three year period. Frank was able to show from the three year comparison that:
- a transition program can convert to fully organic after the second year
- an organic program can approach traditional lawn care in cost in the third year and
- all phases of the organic plan can be profitable with comprehensive estimating
One of the biggest concerns many land care professionals and clients have about organic land care is the idea that it more costly and less profitable than traditional land care. Frank's presentation argued that this isn't always the case, as long as land care professionals provide accurate estimating, and make sure to sell organic as a comprehensive program rather than the organic version of a 4-step program. Frank emphasized discussing expectations with clients before signing an agreement, to ensure that clients understand the differences in methodology between organic and conventional management. He also noted that it's easier to finalize contracts with clients that request organic services rather than trying to convert traditional customers.
One of the areas of Frank's presentation that garnered the most questions was the difference between markup and margin. In a nutshell, markup is the selling or retail price, or the true cost with a percentage of markup added to produce a retail price. Margin, however, is the difference between the true cost and the selling price divided by the selling price. It's important to know the definition of true cost and that the wholesale price of a particular item isn't the true cost to the landscaper. There are additional costs, like shipping and unloading fees, that should be considered as part of the total initial cost, or direct cost. There are also overhead costs that should be added to the direct cost to give the true cost. True cost can then be multiplied by a markup to give a retail selling price, and then divided by the selling price to produce the profit margin.
After Frank gave his presentation, attendees were split into pairs and invited to complete a sample estimate based on a scaled plan that included site preparation, lawn installation, and an aftercare maintenance program. Each group received a large sheet of paper with a scaled landscape plan and used provided formulas to calculate missing square footages and an estimate to spread loam on the lawn and beds, mulch the beds, and seed the lawn area. Groups then answered questions about additional services that the client might ask for, using sample pricing and sample landscape materials costs. Frank then went over the estimate exercise with the large group, and the workshop took a short break.
Anne DiFrancesco of A&M Studios in Westport, Connecticut started off the second half of the workshop with her presentation titled "Marketing Tactics for Land Care Professionals: A Practical Marketing Overview to Help Grow Your Business". Anne began her presentation by defining a marketing plan as "a detailed plan to help utilize precious resources like time and money to help prevent missing profit opportunities." She then went on to explain that having a marketing plan is essential to any business because marketing drives sales and sales drives revenue, so having a solid marketing plan indirectly drives income.
Anne explained that defining a business' target market is one of the first steps that needs to be taken when developing a marketing plan. Target market can be determined demographically through quantitative data like age, gender, or income; or psychographically through behaviors, hobbies, and lifestyles. Research to figure out this information can be performed internally by analyzing personal experiences, or externally through the internet, government and industry reports, trade publications, competitors, and colleagues.
Defining the competition is another important step toward developing a business plan. Anne described both direct (companies whose main focus is selling competing products and services) and indirect (companies that offer competing products and services as part of their total offering) competition, and posed some questions that landscapers can ask about their competition to help establish their relative strengths and weaknesses. She also introduced the idea of positioning - how a target market defines a business in relation to its competitors - and branding - a name, term, sign, symbol, design, that identifies and differentiates the goods and services of a seller from those of another seller. Effective branding helps to enhance a company's positioning because it puts a face on the business and makes it easier for customers to relate to it. For a small landscaping business, cost effective branding might include creating a logo that includes the business name and making sure to put it on all marketing materials, including any company vehicles. If the business has a storefront, making sure to maintain attractive landscaping around the building and including highly visible signage (with the company logo) is important.
Discussing branding served as a segue into the final portion of Anne's presentation about advertising. Once a business has developed a cohesive brand, that brand can be advertised online, in print, at tabling events, through sponsorships to events, and by getting published in magazine articles. The last form of advertising, called public relations, is the most credible of all marketing tools and is very valuable to utilize since it's free and gives businesses a third party endorsement. Anne explained that magazine and newsletter editors are often looking for material to write articles about, so it's worth the effort to contact them with pre-written press releases about a company's new products and services, new staff additions, awards and recognitions, or timely announcements. Anne's presentation finished with a brief introduction to tracking sales using client questionnaires called tracking sheets, conducting sales analysis, and through email and telemarketing customer surveys.
Once Anne finished her presentation, she, Frank, and Laurence Coronis of Coronis Consulting conducted a business panel where attendees were invited to ask questions of the panel and comment on their own business experiences. Discussion was lively at the panel, and served to flesh out topics discussed during the presentations as well as initiate new dialogues. Overall, attendees came away from the workshop with a greater understanding of the business planning and marketing strategies applicable to them, and reported that the information provided was very useful.