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CHEESE2009
11-10-2010, 07:24 PM
The idea of having complete control over my city with services I provide, is a fantasy.

A simple question comes to mind;

What is the best way to gain more business?

Owning two (2) or more companies which provide the same services in the same area

or

Growing your existing company



Think about it;

Owning two (2) or more companies which provide the same services in the same area, may guarantee a higher chance of landing a potential customer.

E.g;

A homeowner decides not to hire X service, but still has to hire someone! This person will most likely hire Y service - why not be "Y" service? ;)


Sure, if customers found out these two companies are charging differently yet are owned by the same individual - this could stir up some negativity. Though, I believe by altering how service is performed between the two, you can fix this issue from arising.

It can be as simple as offering different payment methods;

Company X charges monthly
Company Y charges up front, etc
Which could very well explain why their prices are altered, give or take.


Who's following me with this idea? Imagine each company has a different theme, you cannot do this with one company.

Company X specializes in more of 'lawn striping design'
Company Y specializes in more of 'custom packages'



What are your thoughts?

http://www.pandasthumb.org/Dr.%20Evil%20copy.JPG

Steve
11-11-2010, 12:22 AM
I think there are plenty of companies that utilize this strategy.

For instance.

CNN was the first 24 hour news channel. Then at the time, Ted Turner, who owned CNN, got word a competitor was going to come into the mix as well.

So what he did was, he created another channel to make the competition even tougher on his competitor. He created Headline News.

What got you thinking about this? And which strategy would you prefer doing?

CHEESE2009
11-11-2010, 04:48 AM
Last year I posted about a businessman who did this same thing, running two snow removal companies in the same area. It was talk of the town.

In a way, he failed at providing a good image - but the public didn't learn even after an awful year (they had to give complete refunds to several customers), this man still gained tons of business and even MORE this year.

His first company was fair priced and very well known - everyone in the city knows this company even if they've never hired the provided service. His second company was inexpensive, really making other companies nervous and confused on how he'd pull it off.

I guess with funds from company A, this man was able to back up company B long enough to show people what it's capable of.

Client thoughts; "New company, probably has no experience. With this price, he'll be out of business the first snowfall" - wrong. He went in and proved his company worthy enough to have a second chance.


So, even if I thought it'd turn out bad for him, he got lucky. He lost a lot of customers 'so we all hear' - and people only talk negative about him. I'm 'friends' with 5-6 other business owners in this field and they all have the same negative opinion about him. Personally, I thought it was a brilliant move.

Everyone thought it was a scam, as their contracts were so identical, "something must be wrong here". People are so quick to jump the gun.

I believe in maybe 2 more years, I'll be interested in starting my second company. You never know, I might even call it 'CHEESE' - hahahaha!

Nah, I'd have a really interesting name like, .. oh no spoilers ;) lol

picframer
11-11-2010, 05:27 AM
Both work, which route you go depends on how involved you want to be, two companies is double the headache's and you have a full plate it seems from your posts, growing or acquiring other companies in this industry is the fastest way to go as you have total control over one company.

When I look around our city at the big lawn care guys, they are either a franchise and people know the brand name and simply call them without doing any research (generally), they have pretty amazing booth's at the home shows which sends the we are big message and they pick up a lot of clients this way (I have done this in other business's and it works well) or some of the others bought out smaller companies and in many cases retained the staff.

Personally I am an acquire guy and strategic marketing always looking to a niche and trying to find business the small guys can't do and the big guys don't want as their equipment is too large, also offering a host of services as not every offering will be busy all the time, depends on the season within the season. This has worked well for me for the most part, we have a business model that is working and I plan to stick to it.....well for now anyhow:)

Steve
11-12-2010, 01:40 AM
I believe in maybe 2 more years, I'll be interested in starting my second company. You never know, I might even call it 'CHEESE'

If you started a second one, would you follow a similar strategy where you had a high priced business and then a low priced one? Or what would the strategy be?

So, even if I thought it'd turn out bad for him, he got lucky.

What was the back story to this again? From what I remember last year he was going out of business or am I wrong? Was he able to pull through that time? How do you feel he did it?

Also why do you feel he went with two business? It seems like a real crazy path to take.

CHEESE2009
11-12-2010, 05:09 PM
If you started a second one, would you follow a similar strategy where you had a high priced business and then a low priced one? Or what would the strategy be?

It would be more or less the same. Down here, we actually only have two types of customers.

1) Customers who want quality, and like to show off their luxurious lawn

2) Customers who just want the work done, make it half decent if they could pay less

So, basically I would probably run a 'quick fix' business and a 'luxury' business.

For the second (2nd) type of customer, I would obviously just be mowing without the trimming or 'extra' work per maintenance job. Leaving this business more time to focus on up sells. The price would be low, though they are paying for what they get. If they want me to trim and do a perfect job, they can hire the original company.

I will have 'Breeze' and 'Poor mans Breeze'.

To jump start it, they'd obviously have opposite perks and promotions.

What was the back story to this again? From what I remember last year he was going out of business or am I wrong? Was he able to pull through that time? How do you feel he did it?

Well, every news article stated a different reason for him having two companies - which made people feel indifferent about him. The latest excuse was, "I helped build this company for a friend of mine to run" - which makes absolutely no sense considering he built himself a competitor.

People will debate whether or not he's out to scam people, regardless - A low price is highly addictive to everyone!

Also why do you feel he went with two business? It seems like a real crazy path to take.

Because he has a dark side like me, and wants to rule the world... lol

Steve
11-14-2010, 01:39 AM
Very interesting!

Now when you look at your plan for your current business, do you find you are trying to drive it more to service one specific type of customer over another or do you find that right now its more of, 'i will take any customer i can get.' Until such time as you feel more comfortable focusing on a specific group?