CHAPTER
Are you having fun yet?
Because it’s now time to dive into the third leg of the systems that take Mean Green from aone man army and turn it into a lawn care juggarnaut that can make you the biggest lawn care company in your market!
This part of the blueprint is going to focus on those auxiliary things that really keep your business moving, growing and profitable in a repeatable and orchestrated fashion. Those things that may not seem that important as compared with the actual performance of your job… yet they’re the glue that holds everything together.
There’s nothing in these two chapters that you aren’t already familiar with. Its stuff we’ve gone over in the previous guide and things that you’ve probably gotten to work pretty well for you.
What I’m talking about are things like customer care, bookkeeping, equipment maintenance, marketing and of course the management of your people… including yourself.
Okay that last one is new, but the others are old friends by now – or should be.
Just like with the other two main systems, we’re focusing on how to create systems that keep all of these components well-oiled and running smoothly.
It’s not about what to do to keep customers happy, exactly – it’s more about how to create a system that everybody follows that keep them happy.
You’ve probably heard somebody… cough, cough… say something about how there’s a difference between working in your business and working on your business. That’s really the difference between this guide and the first one.
This is an important distinction and one that means the difference between slogging it out every day to make a nice living and creating something that puts you at or above the income level of a lawyer or doctor.
Something that can litterally be used to generate millions of dollars each year and put dozens of people to work.
One of the most important features of turning your intuitive knowledge of how to run a landscaping company into a set of systems that do it for you is that you then have a hard set of rules and a set of checks and balances that you can compare things to.
If there’s a problem, you hold it up to the light of your systems and see where the trouble is and how to correct it. You’re taking a loose set of thoughts and creating a framework that guides everything everyone does.
And really, all of this stuff – from how you cut the lawn to how you send invoices to when you sharpen the mower blades all leads to the same thing…
It’s all about the next section, really, which is customers. I know this sounds weird, but you really aren’t in the business of cutting grass. Cutting grass is the method by which you deliver your true product, but not the product itself.
Sounds crazy, right? I mean you’re spending 40 or 50 hours a week mowing lawns. Yeah, by now you probably also do leaf removal, snow removal, weeding and maybe some other services in the cold months to keep you going. Yet you need to divorce yourself from the thought that you’re trying to sell a customer lawn care.
Why is that?
Well, it’s one of the most basic and yet most important things to know when you’re in sales – and you’re definitely in sales. And that is that people don’t buy a product or service. They certainly don’t buy it for your sake, either.
People buy benefits!
Think about yourself. When you go buy a pair of shoes, what are you actually buying? Could be that the shoes are comfortable. Maybe they look great and make you feel good. Maybe they’re a quality running shoe that lets you enjoy running. Maybe they’re a quality hiking shoe that lets you get outdoors in comfort and style.
People buy things that feed a need, a want or that reduces a pain.And that’s exactly why they’re paying you to take care of their lawn instead of doing it themselves.
Anybody can cut a lawn.
A guy can go out and spend $500 and get himself a mower, edger and weed whacker and cut his own grass for free.
It’s a lot more expensive to pay you $1,500 every single year than to do it himself, right?
But the reason he pays you is because you’re providing many things that that person might need, want or even that are a pain to him.
You give the customer freedom of time, you make their house look great, etc.
So why am I saying all of this?
Because if you understand that you’re in the business of delivering convenience, time and pleasure… then you’re always going to be ready to deliver it in whatever form your customers require. You’re going to create systems that guarantee their happiness with you and that they stay with you for a long, long time.
That’s critical when going from a 1 man operation to a big company with a lot of employees you’ve got to feed.
General George S. Patton once said, “If you’re not taking new ground, you’re losing it.”
I know that in the work system chapters, we kind of already talked about customers. Remember the find em’, get em’ and track em’ trilogy? You may also remember that I mentioned we’d talk about it again.
A lot of this stuff bleeds over. It has to – your systems aren’t mutually exclusive. Business systems are more like a spider’s web. They all go together – you pull on one thread and you affect each one.
Yet when it's all said and done, you can think of customer care as the very center of the web.
Think about it – how often you sharpen your mower blades affects how well you can cut the lawn, which effects how happy the customer is with you, which affects how long they stay with you, which affects word of mouth which affects your business's growth and expansion.
How you send bills, how you keep in contact and even how you advertise all leads to this one point – getting and keeping quality customers that continually pump money into your business.
Whatever you can do to make sure they don’t cancel their service the better. You’re always going to lose a small percentage of them… that’s just how it goes. Yet if you can keep that number low in comparison to the new ones you’re adding, you’ll not only guarantee a steady cash flow… you’ll also guarantee growth, too.
For instance, right now as you’re reading this guide, you’re still a one man show, most likely. If you’ve followed the first blueprint that means that Mean Green (or whatever you call yourself in real life) is making about $80 grand a year. That means you’re billing about 1,600 man hours or so – although you’re probably working 40 hours a week.
Maybe you’re ahead of that. Maybe you’ve already hit the $100K mark. But either way, you’re servicing anywhere between 70 and 120 customers right now.
Well, think about this – the goal at the end of this guide is to be running
2 crews comprised of 4 people, including yourself. If that means 2
helpers at $15 per hour, Kevin Clueless’ salary of $20 per hour and you
who should be somewhere between $65K and $100K – let’s split the difference and say $85K, you’ve got a considerable amount of overhead to cover just in payroll, right?
If you add it all up, you’re looking at about $195,000 in
payroll, including withholdings. If we keep to our previous
rule of thumb that this is around 75% of your gross earnings,
then we need to add another $65,000 to the gross income just to break even. How did I get that number? Like this:
($195,000 X (100 / 75) = $260,000.
So if you figure that it costs you $65,000 a year to run your business at this stage – that’s equipment, gas, marketing, etc. then this means you’re just breaking even.
What’s the point? Well, how many customers do you need to make $260K?
You can figure that out now on your own because you should know the average amount each customer brings you each year.
In the previous guide, we used a rough estimate based on cutting frequency and the average cost of a cut. We figured that each of your customers made you a total of $1,150 or thereabouts each year.
So using that figure…
$260,000 / $1,150 = 226.
A pretty big jump from 70, huh?
You can do it, though.
Remember that we’re saying that going from just you to you plus 3 is going to take a year. So right now, assuming you’ve got maybe 100 customers, you need to get another 3 per week over the next year or so in order to break even.
Of course, we can look at this another way. With you and 3 dudes working full time, you should be able to bang out 6,000 man hours every year. At $52 each, that means $312,000.
So a lot closer to 300 customers, really. Yet that also gives you an extra $50K to play with, doesn’t it? I mean that’s really what your two crews should be generating at a minimum. That’s extra money for bonuses, gear and of course a boost to your own pay.
So you can see why we need to keep our customers happy, right?
Even if we figure that you’re going to lose 5 to 10 percent of them every year that means that you really need to keep the ones you’ve got happy and make sure that for every customer that drops off,at least 10 take their place each year.
Can you close 3 customers a week, or to put it another way, 180 in a year – figuring you’ve also got to replace 20 or 30 of them?
Think about it, that depends on your marketing strategies. Even better, I think you can, especially as you grow larger. Aside from a customer being happy with you and continuing to pay his bill each month… satisfied customers tend to recommend you.
So from your current 100 customers, you really should be getting 5 or 10 new ones. If you triple that number that means that the referrals from happy customers should be at least enough to compensate for the lost ones.
I’m being conservative, too. Often, a happy customer can bring you many new customers. Either by telling their friends and family about you or simply by their neighbors seeing you caring for their lawn each week and wanting to get in on the action.
Yet this isn’t the marketing section, so I’m not going to talk about your advertising systems just yet. Let’s simply focus on getting the customers and keeping the customers.
I know I’m beating this idea into the dirt… but it’s just so important!
One of the biggest differences between you and your competition is that you and your systems should keep you proactive not reactive. That means acting before there’s an issue. Doing things ahead of time to both stop problems as well as generate goodwill and good profits.
For example, you should institute a policy of a 3 or 4 hour estimate turnaround. Think about it as your company’s prosperity lightspeed fast quoting system, that is followed each and every time a new client calls you.
We already talked in the previous guide about how simply answering the phone right away puts you far ahead of the other guys. Well if you take that a step further, if you can get to the property and do a good estimate and give it to the client first, you’re more likely than not going to get the job.
This is lawn care and the truth of the matter is that it’s usually the early bird who gets the worm.
Most folks don’t get 3 estimates for lawn care. If you show up with a good price and a professional manner… you’re 80% or more likely to get the gig… so you always want to be Johnny on the spot and what's more you’ve got a system in place to reliably deliver lightning fast quotes to your new clients .
Here’s another way your systems should be designed to be proactive. Troubleshooting.
There's a good rule of thumb that says that when something goes wrong.
Ask why 5 times to get to the true answer. Hmm… this sounds familiar too...
Seem like overkill? It’s not, because often that’s how many probes it takes to truly get to the bottom of the issue. Here’s a hypothetical example:
Suppose you’ve got a crew working on a particular customer’s lawn. Toward the end of the day, you get a call from the customer saying that the lawn was cut but grass clippings were left on their rear patio. So you go to the crew and ask what happened.
“We just forgot” is the response.
Obviously – but why did you forget? Again they respond that they forgot. Well, after asking WHY a few more times and getting a little more info each time, you discover that for some reason, the customer’s checklist didn’t have blowing the rear patio listed on it.
It turns out that the problem is in the system. For whatever reason – maybe you forgot to add that to the checklist, or maybe there was an error in the bid, etc. But with strong systems in place, you can go back and double check.
Or, you discover that the blowing item was on the list and the crew signed off but didn’t do the work. Then you have a personnel problem, which we’ll get to a bit later on.
Now, obviously, forgetting to blow the back patio will probably never happen, this is just an example.
The point is that with strong systems, you have strong checks and balances. You and your people have a set of rails to travel on and if anybody ever jumps the tracks, it’s way easier to figure out why.
So how can you create a good system like this? We’ve already touched on it earlier, but here are a couple of ideas, and one simple idea that may seem strange but still works very well.
I know that everything is done on the computer, tablet or phone now. That’s very handy, but believe it or not, sometimes the old and simple methods still work the best.
Consider a system to make sure the customers are being cared for and the work is tracked.
It could be that you simply print a set of pages every day for each crew.
On each page is the customer, their location, their specific checklist and a place to log time at the job and time leaving and a signature.
So what you’ve got is a simple page that goes with each customer.
It lists everything that needs to be done and lets the crew track their time.
With this simple bit of info, you eliminate guesswork, “did not know” and time issues.
Another way you could go is that you print a log for each crew every day. On the log is the customer, time in, time out and a set of numbers. Then this is matched with a master checklist that’s categorized.
So Mr. Smith has a 1, 3, 4 and 5 on their line of the log. This tells the crew to mow, edge, weed eat and blow. Simple and effective, repeatable, color coded with no real ambiguities.
It’s up to you how you do this, but putting these types of simple systems into play will really create that set of rails that you want everybody to run on. And remember – you’re the end all. So follow your own systems to the letter and don't tolerate anybody who doesn't!
Now here’s where you really need to create a good working system.
This is the valve that you open and keep open to make sure that money continually flows into your business. Not just that, but you want to continually expand the capacity of this valve as you go along.
Interestingly, as you grow larger, this should become a bit easier.
It’s like the old saying about taking money to make money. When you first start out, your marketing budget is pretty small… but the more customers you get and the more money you make, the more you can divert into this critical part of your Mean Green machine.
In the beginning, you started out with door hangers, flyers, Craigslist ads, posting in Facebook groups, other social media and hopefully by now… GreenPal. All those things are still great and you should continue them.
At this point, though, you should have a pretty decent chunk of change you can dedicate to marketing. Maybe it’s $500 per month or maybe more. I hope, honestly, that if your business is currently bringing in $100K a year that you can set aside at least $500 to $750 each month. It’s really not that unusual to spend 10% or more of your gross revenue on your marketing.
After all – if the phone isn’t ringing, you’re probably losing business at worst and stagnating at best.
In order to create a good marketing system – one that gets the phone to ring and one that pumps plenty of new business your way, you really need to analyze what you've been doing so far.Go over the past year or so and see what's been working and what hasn't.
Remember that your marketing system has several critical components that you must account for:
Your get the word out system: The advertising itself – those things that get people to call. These include your online promotions, door hangers, signs, etc.
Your response system – how and when you respond to calls. The quicker the better and most importantly what you say when you get a call.
Bidding – how quickly, accurately and competitively you can bid on and close new business.
Follow up and Satisfaction– those things you do to keep customers happy and let them know they’re valuable to you.
These are all important parts and you can’t afford to neglect any of them.
The greatest ads in the world flop if nobody answers when a potential customer calls. A great answering rate is useless if you’re the 10th guy to show up and give the potential customer a bid. And all that’s worthless if you can’t keep a new customer for very long.
Now that you’ve got a few nickels to rub together for marketing, it may be a good idea for you to have a professional website made including search engine optimization.
A quality website designed by professionals that’s optimized to
perform well in searches in the local area can be a huge asset over time.
Another thought is to start advertising on Facebook and Yelp at the beginning of busy seasons. Do a few ad campaigns at the middle or end of spring right before the yards begin to grow and need weekly mowing. Again, sell benefits.
Both platforms are very user friendly and easy to navigate for setting up your ad campaigns. And from my experience is that they produce a better ROI (return on investment) per new customer gained as compared to old school traditional advertising like newspaper ads.
I won’t linger on this too long.
Your marketing system should not only be something you and anyone else follows, it should be trackable and adjustable. If there’s ever an area where you need to keep an eye on the trends and see what’s working and what isn’t, and make changes accordingly, it’s your marketing system.
It's a good idea to set aside 3-4 hours a week to go over your marketing. Say every Tuesday afternoon, or every Sunday night, you need to look over and measure the following
Compare that with how much you spent on marketing that week
And then you get your cost of customer acquisition
So let's say you spent $100 on Facebook ads last week
You got 10 calls and closed 2 new customers.
Well then your cost per new customer acquisition is $50 per client
Not bad when you consider their annual value is going to be over $1,150 – or whatever it actually is in your business.
And that my friends is an example of your basic marketing system.
For now, you’re really the chief salesman. It’s your job to respond to calls and give estimates. That’ll probably be the case for a while, or at least until you’re running 3 independent crews.
At that point, you may still be the main sales guy, and even more so because you’ll probably graduate from the day to day mowing. Yet even so, you want to create an adaptable, documented, repeatable, and proven marketing system that can be handed off to somebody at any time.
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