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Combating the High Cost of Energy
by Joel LaRusic - Author 'Start & Run a Landscaping Business'
Lawn care operators and professional gardeners get a little nervous as the gas prices creep up because it means their bottom line is creeping down.
No one is immune to the rising cost of energy but our industry is affected to a greater extent because we provide on-site service which entails driving trucks around. How can the average LCO reclaim lost profit due to dramatically increasing prices at the pump? What can you do to reduce the energy costs in your business? This article will look at several ways we can do this.
1. *Raise prices - The obvious answer is to increase your prices to recover profit lost to the increased cost of fuel. In fact, according to the Lawn & Landscape 2005 State of the Industry Report, 69% of contractors did just that last summer by building their fuel costs into their service pricing or adding a fuel surcharge onto certain jobs. If you are not already considering the cost of fuel in your 2006 pricing, you should be. Having said that if you are a new company trying to break ground or if for some other reason you feel you cannot raise your prices for some of your customers you may have to absorb the extra costs. If you do this it should be part of a calculated business plan and not done haphazardly.
2. * Efficient Routing - ‘Windshield time’ is always a killer of healthy profits but now more than ever is it important to ensure your job routes are efficient. Take a hard look at all of your routes to make sure that there is as little backtracking as possible. As well, have a look at a city map to avoid taking ‘scenic routes’ to your jobs. Can you juggle your routes so that you are avoiding high congestion areas at peak periods? Can you leave earlier in the morning to avoid rush hour traffic? Make sure your staff understand the importance of always taking the most sensible route. Consider using route analysis software to help with the task of routing.
3. * Focused Marketing - Along the same lines as #2 try to build tighter routes where the properties are close together. A great way to achieve this is through focused marketing. Pick some neighborhoods that you are interested in growing into and hammer them with your fine marketing. Not just once but again and again. Be consistent with your message and this will build confidence in your company. If you have a property in the neighborhood see if you can get permission to put a tactful sign somewhere in the yard for a limited time. Eventually you will build super-efficient routes that require very little fuel.
4. * Driving Habits - Studies show that driving at 55 mph is about 20% more efficient that driving 70 mph. Avoid rapid and/or jerky acceleration and use cruise control whenever possible. Don’t use the air conditioner unless it’s really necessary. Shop around for the best gas prices and take advantage of gas station loyalty programs that can save you money. Maintain your vehicles so as to improve gas mileage – this means regular tune-ups. As well, check tire pressure and alignment which can also affect mileage.
Don’t drag a truck full of equipment (and perhaps even a trailer) around when you do your quotes – you’re flushing money down the drain. Of course, there are times when you’ll need to do quotes during the work day and you must use the truck, but try to avoid it. Consider getting a more fuel efficient car or even a motorcycle/scooter to do your quotes. If you thoroughly analyze your driving habits you may surprise yourself at where you can cut a few corners that can make a difference to your bottom line.
5. * Equipment Tips - Tune-up your equipment. Smooth running equipment will not use as much fuel so keep your engines under a tight maintenance schedule. Consider 4-cycle engines where it is practical, they burn less fuel (and are more environmentally sound too).
6. * Offer Great Customer Service! - We are not the only ones effected by the higher costs of energy. Our customers drive too and they have to heat and light their homes. An ABC News Poll reported that 45% of Americans are cutting back on purchases in order for them to recoup from higher fuel costs. If you are making your customer feel important then you will not be on the top of the list of things to cut from their budget.
Do you have any fuel saving tips or other thoughts on the rising cost of energy these days? Post to the forum by clicking the link below and let us know.
Do you have any fuel saving tips or other thoughts on the rising cost of energy these days? Reply to this forum post and let us know!
Combating the High Cost of Energy
by Joel LaRusic - Author 'Start & Run a Landscaping Business'
Lawn care operators and professional gardeners get a little nervous as the gas prices creep up because it means their bottom line is creeping down.
No one is immune to the rising cost of energy but our industry is affected to a greater extent because we provide on-site service which entails driving trucks around. How can the average LCO reclaim lost profit due to dramatically increasing prices at the pump? What can you do to reduce the energy costs in your business? This article will look at several ways we can do this.
1. *Raise prices - The obvious answer is to increase your prices to recover profit lost to the increased cost of fuel. In fact, according to the Lawn & Landscape 2005 State of the Industry Report, 69% of contractors did just that last summer by building their fuel costs into their service pricing or adding a fuel surcharge onto certain jobs. If you are not already considering the cost of fuel in your 2006 pricing, you should be. Having said that if you are a new company trying to break ground or if for some other reason you feel you cannot raise your prices for some of your customers you may have to absorb the extra costs. If you do this it should be part of a calculated business plan and not done haphazardly.
2. * Efficient Routing - ‘Windshield time’ is always a killer of healthy profits but now more than ever is it important to ensure your job routes are efficient. Take a hard look at all of your routes to make sure that there is as little backtracking as possible. As well, have a look at a city map to avoid taking ‘scenic routes’ to your jobs. Can you juggle your routes so that you are avoiding high congestion areas at peak periods? Can you leave earlier in the morning to avoid rush hour traffic? Make sure your staff understand the importance of always taking the most sensible route. Consider using route analysis software to help with the task of routing.
3. * Focused Marketing - Along the same lines as #2 try to build tighter routes where the properties are close together. A great way to achieve this is through focused marketing. Pick some neighborhoods that you are interested in growing into and hammer them with your fine marketing. Not just once but again and again. Be consistent with your message and this will build confidence in your company. If you have a property in the neighborhood see if you can get permission to put a tactful sign somewhere in the yard for a limited time. Eventually you will build super-efficient routes that require very little fuel.
4. * Driving Habits - Studies show that driving at 55 mph is about 20% more efficient that driving 70 mph. Avoid rapid and/or jerky acceleration and use cruise control whenever possible. Don’t use the air conditioner unless it’s really necessary. Shop around for the best gas prices and take advantage of gas station loyalty programs that can save you money. Maintain your vehicles so as to improve gas mileage – this means regular tune-ups. As well, check tire pressure and alignment which can also affect mileage.
Don’t drag a truck full of equipment (and perhaps even a trailer) around when you do your quotes – you’re flushing money down the drain. Of course, there are times when you’ll need to do quotes during the work day and you must use the truck, but try to avoid it. Consider getting a more fuel efficient car or even a motorcycle/scooter to do your quotes. If you thoroughly analyze your driving habits you may surprise yourself at where you can cut a few corners that can make a difference to your bottom line.
5. * Equipment Tips - Tune-up your equipment. Smooth running equipment will not use as much fuel so keep your engines under a tight maintenance schedule. Consider 4-cycle engines where it is practical, they burn less fuel (and are more environmentally sound too).
6. * Offer Great Customer Service! - We are not the only ones effected by the higher costs of energy. Our customers drive too and they have to heat and light their homes. An ABC News Poll reported that 45% of Americans are cutting back on purchases in order for them to recoup from higher fuel costs. If you are making your customer feel important then you will not be on the top of the list of things to cut from their budget.
Do you have any fuel saving tips or other thoughts on the rising cost of energy these days? Post to the forum by clicking the link below and let us know.
Do you have any fuel saving tips or other thoughts on the rising cost of energy these days? Reply to this forum post and let us know!
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