Contributed by Landscape Leadership
Landing a large commercial account is at the top of many landscapers’ wish lists. But transitioning into the commercial landscaping market requires more than buying larger mowers and trucks. You have to change the way you and your team manage projects to truly be successful.
Before jumping into commercial landscape work, do your homework. Compared to residential work, “it’s a totally different animal,” says Gib Durden, vice president of business development at HighGrove Partners in Austell, GA. “It’s still cutting grass, pruning, and planting flowers, but commercial landscaping is a totally different mindset.”
Switching between commercial and residential work can be difficult. “Don’t try intermingling the same guys doing commercial and residential work,” says Jim Schill, vice president of Schill Grounds Management in North Ridgeville, OH.
One major variant is that you rarely deal with the owner in commercial work. The point of contact is probably not the decision-maker and could be replaced at any time, says Terry Delany, president of ServFM in Fayetteville, AK.
Profit margins are typically lower with commercial, but these are counter-weighted by higher contract dollar amounts. It’s a low-margin, high-quantity set-up, Delany says.
Finding New Accounts
Find out if existing residential clients have any connections to commercial accounts. “A lot of the time, if you’re new to the business, it might take time to gain traction,” Durden says. “Start small, and start working on that.”
When trying to identify prospective accounts, look for locally owned places. “These are the best because you often have a chance to deal directly with the owner,” Delany says. You can also try to find properties that have the highest up-sale potential. Once you decide on the type of business you’d like to approach, gather information on all of these in your service area, Delany says. Create a pamphlet aimed at that market, and start visiting the properties. “We offer to bring lunch by for the office staff,” Delany adds. “That nearly always gets us in the door.”
A big part of finding accounts is connecting with the right people. “Cold calls and emails don’t work that well,” Durden says. Instead, he says attending community events or meetings allows you to talk directly with property managers. “Then, if you follow up with a call, it’s a warm call.”
There are also organizations that can put you in contact with the decision makers. Durden suggests getting involved with real estate groups, such as Commercial Real Estate Women (CREW). Another organization he recommends is Building Owners and Managers Association (BOMA) International.
Chamber of Commerce meetings, CEO forums, and other networking events are also good places to meet potential clients. “Build your sphere of influence, and the world gets much smaller,” Delany says.
After you’ve laid the groundwork, turn your attention to the bidding process. “If you’re bidding commercial maintenance and landscaping jobs like you bid residential, you won’t get the work,” Schill says. “Most commercial accounts are chasing the bottom dollar.” It’s very important to have a good grasp on every aspect and expense of your business.
“You’re better off trying to take the scientific approach,” Durden says. That includes taking good field measurements and knowing the number of man-hours the task will require.
“It costs time and money to put a bid in on a property, so make sure you truly understand the specs and the client’s expectations,” Schill says.
When working on a contract, Delany says to add a clause giving you the right to pause work until you get paid. “If you don’t have that in your contract and you stop working, you’ve breached it first,” he explains.
One of the main numbers to look at when bidding commercial lawn maintenance and landscaping jobs is your profit. “Since all landscape contractors are paying approximately the same amount for trucks, mowers, labor, overhead, and fuel, the deciding factor is often how much profit do you want/need to make on this job,” Delany says.
Here are questions he suggests asking yourself when deciding how much profit to add to your bid: How many competitors are submitting proposals? Which competitors are they, and how do they usually price work? Was this a cold call or warm referral? What is your financial position as a company right now? Do you need to buy new equipment or hire more employees to add this maintenance contract to your book of work? What are the up-sale potentials? Who will be your contact if you land the account? How long has this potential account been in business? Does the individual or committee have any landscape knowledge? How often does the account switch landscape contractors?
Avoid These Pitfalls
When you’re first starting out, it may be tempting to “buy” a job to get a foothold with an account. But, that’s a lose-lose situation. Stick to your set profit margins. You also have to educate your employees. Just because your sales team is good at landing residential accounts doesn’t mean they’ll be as successful in the commercial sector.
Commercial lawn accounts and landscaping contracts can bring in large checks, but make sure your business isn’t too dependent on one account, or property type. “You don’t want to have all of your eggs in one basket,” Schill says.
With the right preparation, you can make commercial accounts a profitable part of your landscaping company. “If you have the patience and are willing to deal with slow payments and losing/replacing large accounts,” Delany says, “go commercial.”
Landscape Leadership is a sales and marketing agency specializing exclusively in lawn, landscaping, and tree service companies.
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