Apr 25, 2012 Lawn Care Business
If you have a healthy lawn care business, it will grow. Growth should be an integral part of your business plan, but growing is not always a pleasurable experience. There will be starts, stops, plateaus and spurts of growth during the life of your company. You need to realize this and plan for each stage. There is not necessarily a set sequence for the growth of your company. There is also not an exact formula. Nevertheless, you need to formulate a plan for growth. You need to include it in your business plan and be aware of the various facets you need to address along the way.
One thing to be aware of is the speed and size of growth. It cannot and should not occur over night. If you grow too quickly, you will not be able to fine-tune the resulting problems and requirements of a growth spurt. This can result in you and your company crashing and burning as fast as you rose to prominence. Slow and steady is the optimal approach to increasing the size and extent of your company. Grow correctly and you will be able to sell your lawn care business for an impressive profit.
This leads to the question, “What kind of growth should I consider?” While growth is a given and even a necessity, you need to look at what kind of growth you wish to undertake. There are two basic types to consider. You can increase your company’s goods and services. This means you expand internally. You retain, essentially, the same customer base, but you offer these clients enhanced or increased services and products.
An alternative form of growth is to expand your customer base. This involves deliberating seeking out and acquiring more customers. It will involve greater effort on your part to identify the target area. This type of expansion can take one of two forms. You expand within your range keeping it within the parameters of your initial area. In a sense, you are simply intensifying your customer base. You can also take a bigger and opt for extending your company and its services outside your current area or region of operation. This can be a higher risk operation. It also can prove to be more expensive since it requires increased advertising, more energy and higher expenditure.
Before you select one or the other forms of growth, you need to examine the way that produces the greatest profits. Theoretically, expanding your services and increasing your products is the easiest and most profitable. Increasing your customer base is riskier. It involves the cost of fuel for your equipment increasing. You will have to pay more for the gas and oil driving your trucks, vans and assorted lawn care equipment.
In addition to the increased fuel expense is the higher rate of insurance and the cost of your employees. More employees mean a larger payroll. If you are working further afield you have to place more employees on the road traveling longer distances. This may result in you paying for time when they are not working.
Yet, you should not rule out expansion of territory on potential capital outlay. If you expand your company base, you will also increase your profits. If the margin of your profits exceeds what you have made previously, you are on the right path. You need to monitor carefully such things as service charges, costs, daily expenses, specific one-time outlays or capital expenses and compare it to your income. This will help to ensure the path you have taken is the correct one.
There are several things to concern yourself with when you address issues of growth. Each of these factors can and will affect how your company faces the future. Be honest in your assessment of each modification or characteristic. Compile a list of possible aspects, their dynamics and solutions. Look at the economic and legal aspects but do not neglect the personal and interpersonal facets. Carefully consider the factors and characteristics listed below.
Always keep in mind your own personal limitations when planning growth. Are you capable of handling expansion? Do you know what expansion will create and how it will affect you personally, in terms of time spent with the business? Do you know how to delegate? Can you work with a larger crew? Can you handle the increased paper work and demands? Are you capable of addressing the increased needs and changes within the company?
You need to take stock of your personal position
You are no longer the employee-boss. You have just become “Management.” This entails increased responsibilities. It also may mean taking a course or crash study on management policies and styles. Above all, you need to establish order and organization. If your techniques of management are poor or very disorganized in time, human resources, money, customers, vendors and growth, it will mean a loss of profits, customers and, eventually, your lawn care business.
You need to evaluate yourself as an employer and work on such skills as communication
Can you convey instructions clearly? Are you precise in your directions to your work crews and your clientele? You can be a boss who simply orders and rules through some form of coercion – usually financial. You could also decide to be a manager. A manager leads, provides incentives, and earns and offers respect.
A growing company will move away from a one-man-show. It will require the hiring and training of personnel. You will need to establish guidelines and set boundaries. Time will be required for training new personnel and retraining old personnel in new equipment and procedures.
As your company grows, you will have to establish a specific hiring process. You will need to consider the source of your employees. Where are you going to obtain them? Will use an ad in the newspaper? Will you post it at governmental or private employment services? Can you utilize any government programs to defray the costs? e.g. training under unemployment insurance benefits, or young person’s programs.
Once you hire the employees, you have to set up a training program. You cannot afford financially, legally or morally to send an untrained or semi-trained person unsupervised on a job. You also have to decide on what basis you are hiring them. Initially, it is a good idea to hire someone provisionally or part-time. This gives you time to access their performance on the job site. If the employee shows promise, you can then promote him or her to permanent status.
A growing company acquires increased expenses. You will need to augment such things as insurance, health care and worker’s compensation. These include more paperwork, including the filling in of various government forms. Bureaucracy and its involvement does increase with the growth of your lawn care business.
You will also face further capital layout in addition to the increased spending on day-to-day matters. With more employees, you need to face such issues as higher transportation costs. With the volume of business up, you will also need to worry about such things as implementing a payroll system. This also leads to a change in how you handle your taxes. You will have to fine-tune your current system. This may mean abandoning a paper system for that of a computer. You may have to consider hiring someone to do your taxes or even an accountant. These positions do not need to be full-time. Part-time is sufficient.
Equipment and space
The need for more vehicles and equipment is part of any expansion process. It can be expensive in more-ways-than-one. While you may have babied and taken exemplar care of your tools, this may not be the case of your workers. They do not have a vested interest. As a result, your maintenance and even replacement costs may increase.
You may need an office separate from the space you currently have in your home. If you purchase more equipment, it will also need a larger storage shed. In some instances, it is possible to build on your own property a combination shed and office. You may also be able to tack-on an addition. On the other hand, you may have to completely severe your residence from your workplace. Factors such as available space and local by-laws will help direct you in your decision. However, either way, it will cost you money. You need to look at the viability and feasibility of all these options.
Growing Pains: the Results
You cannot grow indefinitely. Growth is finite in any business. You can, however, take a small one-person lawn care business and create of it a company with a strong customer base and many employees. When you have reached a peak or no longer have an interest you can always retrench or sell.