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iadams
03-19-2010, 12:03 PM
Hey Everyone,
I just joined the site and have already found it very helpful. I am in my second year of lawn care, after having bought an existing company. I run a two man team, and use Walker mowers. I love the business, and am always looking to expand. I look forward to getting/sharing new ideas here. Thanks Steve for having a great site.
Ian

Steve
03-19-2010, 07:54 PM
Hi Ian,

Welcome to our forum!

What is your reflections on purchasing an already functioning lawn care business? Why did you choose that route and how do you feel it helped? Looking back so far, would you have done anything differently handling all that?

iadams
03-26-2010, 10:39 AM
Actually, the biggest advantage to having purchased an existing business, was the contracts. Instead of having a few years of struggling to acquire customers, they were already there. My challenge was to take over mid season, and take care of them so that they would return. I lowered the labor rate immediately and up-sold services within the existing customers. Looking back, I don't think I would have changed anything. It worked out pretty well.

Steve
03-26-2010, 09:05 PM
For those looking to do something similar that you have, should they lower their labor rates when they take over a contract?

What is the up and down side to doing that?

Also what kinds of things should they be looking into upselling?

iadams
03-27-2010, 10:05 AM
Well, when I took over, the labor rate was very high. Mostly I think because the former owner was burnt out. I also found that because of that, current customers were having other people do other work ( aeration, power raking, clean-ups), because they were cheaper. So I had to cut the labor rate in order to be competitive, and then try to get them to have me do the work again. There were also some that just didn't bother doing some of the extra services, because of the huge amount of money the former owner had quoted them. I think someone who is thinking about doing something similar, should really look at what the former owner was charging, and decide if that is fair market pricing for your area. Maybe adjust it if you think you can do it, but don't starve yourself out either. The down side could be that if you go too low and can't cover your costs, the customer will expect that price. Then it will be hard to turn around so quickly and raise it back up. They like price cuts, not increases. For me it's building a relationship with the customers, and thinking about the long term sales with them, not gouging them for one big sale. You have to find a profitable balance.

As far as up-selling goes... I decided to offer extra services at a cheaper rate for contracted customers. Something like aeration is $15.00 cheaper for contracted customers, if I'm already going there I save on an extra trip, so why not pass that on, and almost guarantee extra repeat services from them (maybe that's a standard thing, I don't know). So far this has worked really well, and yielded new clients. I have not had to do any advertising yet, it's all been word of mouth. As long as you do good work, at a fair price, and take care of your customers, you will retain them (and get some new referrals).

Steve
03-27-2010, 06:49 PM
Those are very good points. It seems a lot of times, newer lawn care business owners have a difficult time finding an the local average price for lawn care. How did you go about find what the average is? Since investigating that do you feel you found an even better way to get the local average price?

How should other new lawn care business owners do this?

iadams
03-28-2010, 01:39 AM
Well Steve, I have found the best thing you can do is talk with, and more importantly LISTEN to your customers. Often times they have done the work for you. The consumer most times is the most educated about what the average price is because, 1. They obviously don't want to do it themselves, 2. They don't want to pay more than they have to, and 3. They want to be able to trust you with their property as often times they wont be there. Trust functions both ways. I am of the opinion that if I am completely honest with them, they will be honest with me. That works for the most part. You will always have the exception to the rule, but that goes for anything in any business. That is the risk. I get calls like " My guy isn't doing it this year, and I want to see about what you would charge". Well, I go and have an estimate in mind of what I would like to do it for and one of what I can do it for (not starving). I usually ask what the last person did it for, and I explain that I don't want to shock them with an increase they can't handle. The fact is that, right now our business is the "fat" that gets cut quickly because of the economy, so you really have to weigh, "what can you really do the work for" and still make it through. I then try to match that price as closely as possible. You have to keep in mind that some of these people are on a fixed income, and they may have to say no, even if they are sold on you. Sometimes they tell me a price that's higher than I was thinking, so over all, I think it evens out.

I would love to hear some of your (and other members) opinions about what I'm doing. Keep in mind, I will have owned this business for only a year in July. I could also use suggestions. The person that is not open to suggestion is doomed to fail.

Steve
03-28-2010, 10:34 AM
I then try to match that price as closely as possible. You have to keep in mind that some of these people are on a fixed income, and they may have to say no, even if they are sold on you.

Do you feel this would include things like offering to cut the lawn every two weeks instead of every week? Can the price be made to match like that ?

iadams
03-28-2010, 10:49 AM
No, I prefer to offer only weekly mowings. Every two weeks is hard on the schedule, harder on equipment, and doesn't look as good. So I try to match a weekly mowing as closely as possible, but sometimes you may not be able to come to an agreement.

Steve
03-28-2010, 08:49 PM
There is a balance that has to be reached if the job is to be accepted by both parties.

It does make you wonder, can you forgo certain services, to lower a price and yet still have the yard look good enough for you and your standards. For instance, can you not include edging or trimming or blowing if you are trying to hit a customer's target price.

Or at a certain point if the quality suffers, you just don't want to do it because the job will reflect poorly on you?