Running a typical small to medium sized residential landscaping business is not easy. Running a bad one is harder, but running a profitable one is fun. One way to make your landscape business more profitable is to do a marketing plan. Sure it may take a little work, but to be successful it is essential. Next time you have a rainy day, or simply no work, make this a priority. In this issue I have constructed the framework of a basic marketing plan, designed for a small to medium sized landscape business, which specializes in residential landscaping. This plan is full of examples, which are random and do not relate to any particular business. Hopefully the examples will help you formulate your own plan. I have tried to simplify the planning process a much as possible, so the task should not be too hard. So sit down with a pad and paper, or a computer and get to it. At least make it your next rainy day project; that is if we ever get so lucky and it rains.
Executive summary (Read this quickly and come back to it at the end)
The executive summary provides a quick run-down, or synopsis, of the overall marketing plan. This helps your group as well as others quickly identify the main points. This summary should be written after you finish the rest of the marketing plan, (done last) but placed at the beginning of the first page.
A table of contents should follow the summary so readers can easily find more details about each point. Off course if this is only for you, and no one else, you can dispense with some of these formalities, although if you are going to do the exercise, then the extra work may help the bank, or your employees better understand your business.
Research Phase (I find this the fun bit)
Here is where you gather information about landscaping market forces, your business, and what economic, customer, and other trends are occurring. Just put on your landscaping, and common sense thinking cap. A little reading, internet searching, and peer discussion can be helpful. This is a good excuse for a few research beers with some landscape mates.
- How many people are currently having landscaping done by any firm competing in the residential market in your area of operation, or even in a wider market ? Don’t get too worried if you cannot find this information.
- How many prospects have potential use for residential landscaping?
- What is the geographic market you need to look at, and then find information about it? Make the size a little bigger for the research phase. EG: You may live and work in the Eastern Suburbs, but you should investigate the inner North, West and South.
- Is the market growing, flattening, or shrinking? For the nursery industry, the landscape market segment has continued to grow its market share of the garden segment. In 2002 it increased its share by 20.1%. Landscaping has become one of the major growth markets in the nursery & garden industry, with landscapers holding 25% of total garden product distribution for the year ending 30 June 2002. While other sectors grow or remain stable, the retail nursery sector continues to lose market share at 18.2%, down 2.8% from 2003. Basically landscapers are supplying more plants to the public than they used to. (If you mainly do paving, try to find similar information about that part of the industry). Growth segments make for good opportunities.
Reasons why the Residential Landscape market maybe growing. (I am sure you will find more)
- A general decrease in people’s gardening skills
- The media’s high profile garden and makeover shows
- People are becoming more time poor
- A more stylish outdoor living area is replacing the traditional backyard
How large is the potential market? It is hard to define, but in your market area, how many people per year would undertake to hire a landscaper?
- What are your performance indicators? Check you profit statements. Are you having cash flow problems at certain times of the year?
- Are you gaining, or slipping back? Are you growing?
- Where are you gaining?
- If you’re slipping back, is it something you can fix with better marketing?
- Is everybody in your area of interest in the same situation, or just you?
- Which types of jobs are the most profitable? Planting gardens; you can often make 100% profit when you sell plants. You buy at wholesale and sell at retail. Some turf varieties have a higher profit margin for the Landscaper. EG: A landscaper can make $1.60 per square metre on Empire Turf, whilst they only make $0.30 cents on Kikuyu. (When comparing wholesale prices to retail prices)
- Which clients provide the most business for you? This maybe by suburb, or age etc. You may do more landscaping for families where both of the married partners work.
- What times of the year are quiet, and which require prospecting? You may need to advertise more at certain times of the year.
Macro/Micro Environmental Factors
- Look at outside influences like the economy, demographics, social or societal factors and what effects they are having on your business. Eg: People are ageing. (Can no longer do the heavy landscaping work). More Baby boomers with money. Sea change. (People moving near the ocean).
- What trends or changes are occurring? For example water usage is a concern now for many gardeners. This will effect which plants a landscaper must consider buying. Trends are towards No Irrigation gardening plants and more drought tolerant turf. EG; Empire turf. Smaller area landscaping, as houses grow and block sizes shrink. (More paving?)
- Could any changes or trends affect your business?
- Is there a greater awareness of an issue your business is involved in?
- If so, can you take advantage of that to gain more clients?
- Does the government, local, state or federal, have any effect on your business?
- If so what, and will this change in the near future?
- Are any new rules/regulations/taxes on the horizon?
- If so how are they going to affect your work? EG: Drip irrigation is allowable in some areas, whilst other types are not. Is this an opportunity?
- Are any new technologies on the horizon in your sector?
- If so how are they going to affect your work? EG: New smaller efficient machinery can save labour. So many new small fantastic machines in the market place. Besides how much fun are they to play with?
A SWOT (Strengths, Weaknesses, Opportunities, and Threats) analysis builds on the information you gathered in the first part of the research phase and identifies the major strengths, weaknesses, opportunities and threats with which your business is faced. Strengths and weaknesses are internal, referring to your business, whilst opportunities and threats come from external forces.
This is an example of a SWOT analysis for a residential landscaper. Not all these points will be relevant for you, so you really should do one of these. It is simple and easy.
Strengths – Examples
- We have experience and knowledge with plants.
- One of our employees was a horticulturist so we have extensive knowledge on plant applications and solutions for gardens.
- Due to small size we can focus on meeting clients needs more closely than competitors and create customised solutions due to our creative focus
- We own a small skid steer loader
- We have paving experience
- We have good experience at building retaining walls
- We are well known to residential Landscape Architects and Designers
- We have well signed vehicles
Weaknesses – Examples
- Because we are small our purchasing power currently from suppliers is low which reduces our profit margins
- We have little experience with sandstone rock
- We have little advertising in local directories
- We have less machinery than many of our competitors
- We work mainly in a small region
Opportunities – Examples
- The city is expanding west with new housing developments that require landscaping
- These new houses can be targeted with direct mail
- Many of the houses in Western Sydney consist of families with both parents working. These busy households require gardening services that save time and money. As a result of this there is an opportunity in providing gardening solutions that require low maintenance.
- There are many suppliers of plants and turf in Western Sydney due to the large amount of land. This will reduce the cost of sourcing supplies for projects.
- The new No Irrigation Gardening plants that are now available, and the extra drought tolerant turf varieties such as Empire Turf, provide an opportunity to install No irrigation landscapes. A brochure saying the following could be letterbox dropped, or adverts in the local paper. (Change your garden from water hungry plants and turf, to ones that live on natural rainfall. Don’t be scared of water restrictions.)
- Retail nurseries, landscape yards, paving supplies, and turf companies often need Landscapers to recommend for landscaping. Few landscapers send company profiles to these groups. There is an opportunity to work with the suppliers, ensuring them that if they recommend you, you will use their products.
- Landscape architects and designers need landscapers to recommend. Few landscapers send company profiles to these groups.
- Customers are looking for specialists. Some are looking for specialists in each of the following areas; turf installers, garden installers, pavers, retaining wall specialists, water features, court yards etc.
- Garden shows require landscapers. Landscapers are required to do work and help in garden shows like ABC Gardening, the Melbourne International Flower and Garden Show, Perth Garden Week, Sydney in Bloom etc. These may take work, but the networking can be invaluable.
- Networking with colleagues, and others in allied industries can lead to opportunities. EG; having a stand, or even just attending a landscape architect conference can provide contacts that may recommend you in the future.
- Winning landscape awards can lead to credibility, and new customers.
- People in general, hate physical work. Manual labour is something people are becoming more willing to pay for.
- Increased advertising, and other marketing, can lead to more work than we can cope with, which can simply be fixed by increase our prices, which brings the level of work back down to manageable levels. Higher prices can be an opportunity.
- Machinery can save labour costs.
- Landscapes need maintaining. There is an opportunity to start a maintenance business.
Threats – Examples
- A major threat to gardening in general are watering restrictions which make people feel uneasy about maintaining their gardens.
- Increased competition from these landscapers in the area. (List them)
- Increased costs of labour, and work cover laws becoming tougher, can all increase business costs.
- Extra government red tape can slow landscaping down.
Marketing Objectives and Issues (Now we get serious)
Having completed your SWOT analysis you can then work out the issues you need to focus your plan around.
You should list broad goals of your business;
- Eg; To specialize in garden and turf installation, or to specialize in paving, or to chase a broad range of landscapes, or whatever your goal is.
- To broaden the geographic area in which we landscape.
- To network better with allied businesses.
- To get bigger.
Next, target objectives should be stated as quantitative or specific goals, for example:
- We want to strengthen our relationship with wholesale nurseries that provide drought tolerant plants.
- We want to increase promotion of our business 200%.
- Increase the amount of quotes that are successful by 25%
- We need to landscape an extra 20 homes this year compared to last year.
- We need to increase our labour charge by 5%.
- Our aim is to increase turnover by 15% this year.
- To buy extra labour saving devices, and to hire out and increase our machinery hire charges by 40% compared to last year.
Strategy to Achieve Objectives
You can now outline your methods for achieving those objectives.
Possible Strategy (Plan of Attack)
Some possible examples. You need to decide for your business what the methods of achieving your strategy will be.
Market Segmentation (Specialization Strategy)
Almost all markets have some major and distinctive segments. Even if a market isn’t currently segmented, it probably can be. By focusing on a segment of the market it allows small businesses to specialise and meet the needs of these clients more effectively than larger competitors, whilst larger companies can offer an array of services at a cheaper cost.
Example: We will specialize in hard landscaping, such as; water features, courtyards and paving works.
Or we will specialize in soft landscaping, such as turf, gardens, and some basic hard landscaping such as retaining walls.
Or we will provide a complete landscape service, but in our advertising we will list all of the landscape types. (Both hard and soft)
The positioning of your company is important as it determines how you will compete on service. You may only want to do large scale projects or focus on a small profitable niche in the market, or you may chase the high priced work in affluent areas, which requires the correct image, or you may chase the large market of the growth areas.
Promotion is concerned with how you can grow your business and spend your money on advertising. It is one of the most important decisions for increasing the amount of work and finding potential customers. There are many simple but overlooked factors which are essential in promoting a small business. Remember the more sensible advertising you do the more work you can quote on. The extra quotes you are asked to do, may allow you to increase your price by 5% or more.
For Landscapers this could include the following simple points:
- When working on client’s landscapes, having brochures in the car to drop into neighbouring properties and recently built houses. If things are slow, get in the car and head to areas where people are building new homes, and do letter box drops. It is not hard to hand out five hundred brochures in a new subdivision in a day. Make sure the flyer has a special offer.
- Offering free quotes in advertising
- Making sure that you and your vehicle are presentable
- Make sure sign writing on trucks is up to date and clearly visible
- Have plenty of business cards on hand, and company profiles on hand.
Give the customer a brochure or fridge magnet or some other form which will stay visible inside the house. This will increase the chance that they will recommend your business to friends and family
- When working on a project, erect as large a signs as possible, shouting to the world that you are landscaping that house
- Ask your current clients if they know of anyone who needs work done
The types of advertising different landscapers normally use includes the following; direct marketing with letters and postcards, TV, radio, and print ads.
Direct marketing is a great way to promote your business as it allows you to monitor sales resulting from this media, whether it’s over the internet or by pamphlets to peoples homes. Direct mail has been on the increase in recent years so it is important to make sure it grabs the readers’ attention or provides information that they may find interesting. So if you letterbox drop, include a catch phrase like; ‘Save your garden, let us replant it with No Irrigation almost No Maintenance plants. You will quickly save the cost of the garden in water savings and maintenance costs.’ You could even attach a pretend cheque, made out to the home owner, offering $50 of any landscaping done.
Call up suppliers and ask for free brochures which you can use and place stickers on top for your business and push these products. Push the products which earn you the greatest margin. Products with the biggest difference between retail and wholesale will make you more money. EG; Some turf varieties such as Empire have a higher margin for the landscaper, or some pavers also provide you with a better margin. Plants can have a 100% mark up.
A great idea would be to hand out flyers which promote the reasons why using a landscaper will save you time and money. For example if a consumer was to purchase plants from a retail nursery they would be better of purchasing from a landscaper. A landscaper can normally buy the plants at a better rate and plant them at the same cost. Retail nurseries buy plants for say $4 and sell them for $8. So this may allow you to not only supply the plants for the customer, but plant them for free. (You could offer free planting of plants). Often large jobs that people try to do at home they would be better of getting a landscaper to do as it will save them time and money because of special machines and procedures the landscapers have.
Marketing to Allied Industries
Produce a good company profile document. This could be a letter of introduction, or a full colour brochure. State on it what kind of work you are after, and make it clear that you would like to work in the future with the company you send it to. Send these to turf companies, landscape supply yards, soil companies, retail nurseries, garden centres, landscape architects and designers. If it is quiet, go and visit these types of places, or phone them up and let them know you exist.
Ask retail nurseries etc if you can put a sign up, or at least put business cards at there premises. Put signs where you are allowed. If you can put some small real estate type signs outside friends’ places or wherever, give it ago. Make sure its legal to do so.
Types of Advertising
Web sites – These are low cost. Have a good clear web site, which quickly shows what your business does. Yellow pages online, and Google are worth looking at for advertising. Google’s adwords are relatively cheap.
Print Advertisements – All the above information could also go into print adverts.When designing a print advertisement, choose one, two or at the most three points, and make them stand out. Don’t clutter. Make sure your message is correct and strong, and then get it across so people will notice it.
Local paper advertising – This can be quite effective, as can yellow page advertising. Choose your specialty wisely in these. EG; You may have in big print. ‘South Side’ or ‘Paving’ or list more services, and your geographical area if required. You may want to have a wider area of service, which can be achieved by saying, ‘Sydney Wide’, or if you have the funds, you may have 2 adverts with one saying ‘East Perth’ and the other saying ‘South Perth.’
Radio and TV – In regional areas it can be quite cost effective to advertise on Radio or even TV. For example in the central coast area of NSW, television can cost as low as $50 per advert.
For ambitious landscapers – Form a marketing group with landscapers from each state of Australia. For example, what if a group of say 15 Landscapers got together from all states of Australia, and put in $2000 each. That would give them $30000 to advertise in magazines like BurkesBackyard, or Better Homes and Gardens etc. In a half or full page advertisement, all the landscapers’ phone numbers and areas could be listed, plus some nice creative, to bring clients to the group. Think outside the square.
In terms of pricing, landscapers must realise that often they can purchase products at lower cost trade prices, which they can then make higher margins on when compared to the retail segment. For example smaller quantities of turf can be purchased for $4.95 and sold to consumers for $8, rather than purchasing cheaper varieties of turf that have low profit margins. EG; Empire and Palmetto turf provide better margins than Couch and Kikuyu. Bettertiles informed me that landscapers can easily get $15 profit per square metre on European outdoor tiles, but only $5 profit on the cheaper Chinese outdoor tiles. Try to use products that provide better profit margins. Generally, the commodity type cheaper products allow for little or no margin, whilst the better quality type products allow for a better margin. Let the customers choose the better products, as your competitor may try to sell them cheaper type products to get the job. It may be necessary to offer the cheaper products in a quote, and then explain the benefits of the better products, allowing you customer to choose them.
Competing on price is not recommended as this will simply lead to reducing profit margins in the landscape industry. You will soon realize what the correct price is. If you are too low you will win every quote, if you are too high you will win none. Try to get a good balance.
Contingency Plans (Action Plan)
Each marketing strategy can now be broken down into specific action plans. This the part where you make sure things are actually done, and not just talked about.
Each action program should specify:
- When it will be done (started, reviewed and completed)?
- Who is responsible for doing it?
- How much it will cost?
- What will be done (for example, a direct mail-out to attract new members to your group)?
- What will the measurable projected outcome be (for example, 50 new members from the mail-out)?
- Set dates. This is your check list for making sure things are done.
Operating an effective marketing plan requires resources in people, money, and technology.
This section of the plan details the resources needed. For example an advertising budget can be compiled.
The last section of the plan outlines controls that will be used to monitor progress.
Review the results for each period, maybe each month or quarter, and determine if the plan is meeting goals. Modify where necessary. Here is where all that money you pay accountants can finally pay off. Compare profit and loss information to see if the business is improving compared to the ones previous to the marketing plan.
Wasn’t that fun! The marketing plan for a commercial landscaper can be found here.