In this video, Jonathan gives the pros and cons of accepting lawn maintenance subcontractor jobs.
I’ve had a number of Service Autopilot clients and individuals that watch Lawn Care Millionaire email me and ask this question. It has to do with management companies that control a lot of work. Maybe not necessarily a property management company but you might imagine in this scenario a company that has foreclosed on properties and has to have or find a contractor to go out and mow the property, change the locks, wash the windows, or perform some level of service. There are a lot of these companies and basically they will give you work and they will pay you for that work. Basically they’ll give you a list of maybe 50 jobs they need you to service. You’ll do the 50 jobs and they’ll give you a check.
I’m not sure what you call those companies. I think of them as management companies and there are a lot of these. We have quite a number of Service Autopilot clients that will work with these companies. Over the years, we’ve had some Service Autopilot clients that exclusively built their entire business around getting a spreadsheet every week from a management company and doing as much of that work as they possibly could. They would then send in before and after pictures and get paid.
The question was, is this a good idea? Should I take this work? Should I accept the lawn maintenance subcontractor jobs? It comes with a contract that you have to sign. Is it a good thing for my business? My answer most recently, and I’ve given this answer before, is I don’t think that doing work with these management companies is a great long term strategy to build your business around.
Their jobs generally pay less. They don’t generate as much revenue for you as a job where you went out and sold it and found that client yourself. Also, these jobs tend to be harder on your equipment and they tend to be more difficult to perform. These are generalizations. That’s not always true but that’s been my finding and my understanding in talking with others.
The other concern that I have about jobs of this type is that if you get too much or too many of these jobs, you’re building your business around one customer. If they stopped giving you work, it could be really bad for your business. It could potentially end your business if they make up too much of your revenue. I would say that early on if you’re just getting started or you’re very small that accepting this type of work might make sense strategically. You might want to accept this type of work for some period of time while you’re learning how to sell and market and bring in your own work.
In other words, you would perform this work for a while. It would help you bring revenue to your business which would help you grow, hire employees, buy equipment, things of that sort while at the same time you’re working on marketing and getting your own clients where you eventually replace the work you’re getting from the management company with your own clients. You would slowly phase out of accepting that type of work.
My answer is, I think it makes sense strategically for a short while in your business. But, don’t let it get you distracted from doing your own marketing and getting your own clients. If you take so much work from the management company that you’re so busy and you’re doing most of the work yourself that you’re now too busy to go really build a business, all you’ve done is secured for yourself a job and you’re not building a real company. That job could all go away one day if the management company stops giving you work.
That’s my recommendation on how to think about taking lawn maintenance subcontractor jobs.
Set yourself apart from your competitors and win the sale…
I experienced really good selling recently, and I wanted to share the experience with you because I think it can be applied to your business and my business. It’s a really great lesson to remember. We’re putting together our 2nd annual Service Autopilot Conference. It will be in November. We’ve pretty much finalized everything at this point.
About a month ago we were finalizing the hotel that we were going to hold the event at, and it’s an expensive proposition. We’re signing a contract with the hotel for about $125,000 to put on this event. We went, 5 or 6 of us, and we toured the final 3 hotels that we had decided will work for us.
One of those hotels is pictured on my screen. You can see it in the back, it’s the Anatole Hilton in Dallas. We went and they did a first class job. As soon as we walked in the door they had several people waiting for us, and then they ushered us into the hotel and took us to one of the 6 restaurants. They had desserts and drinks and all kinds of things set out for us. The lady that was essentially running the show, and she had 5 or 6 people there with her to help answer questions, she was asking us all kinds of questions about what we cared about, what were our top concerns, what kind of problems did we have last year at our conference at a different hotel, on and on. She was fact seeking. She was looking for selling points, all while we enjoyed drinks and dessert. After that, they did a fantastic job showing us the property.
Somewhere in the course of that conversation, it was mentioned by John, my business partner … In one of the auditoriums that we looked at there were some candies sitting in a little bowl on one of the tables, and he made an offhanded remarkable about “Oh, this is a great hotel, this is my favorite candy.” That was it. We spent a couple hours with them. They gave us gifts on the way out, and that was it. We went on to the next hotel.
About 2 hours after we got back to our office, and our office is a good ways, it’s, I don’t know, 10 or 15 miles away from this Hilton, a courier came to our office with this big bag that you can see on my screen, and a thank you card. They filled this bag with tons of these candies that John loves, and they delivered it with a thank you note. You can see Ashley was running the show on this one, that’s why her name’s on it, but then you can look inside the card and you can see that she wrote a card to us, and was thoughtful enough to send these candies.
We were really happy with the hotel, but we also have 2 other really good contenders, and almost immediately it was like “We want to do business with them.” It completely re-framed how we were thinking about them and where they stacked up in the line-up of the final 3. Like, “If they do this trying to make the sale, what might they be like when we actually do business with them? Maybe they should get the contract.” It was dramatic how through the rest of the day the way we talked about them as compared to the 2 other hotels changed.
Why I wanted to share this with you is what is it that we as business owners and as salespeople can do to change the way our potential customer looks at us? What are these like things? This cost them 20, 30 bucks in courier fees, some candy and a few minutes. Nothing, something really small. That would even be worth it if your sale was only a 1000 bucks; in this case it’s 125,000 dollars. Even if it’s a small sale, that’s hardly any money to spend to really put yourself in a position where there’s a high probability that you’ll win that deal. It’s really smart business, and she did a really smart job of paying attention and probing for what our needs were so that she could answer objections and put herself in a position to win the business.
The other thing I’ll mention, I think I’ve said it before, is over the years at Service Autopilot we’ve received tons of cards. I’ve received a bunch of, and other people have received a bunch of gift cards to local restaurants. We’ve received catered-in lunch to our company from our clients. A lot of clients have sent us all kinds of gifts and said thank you. The clients that do that are known by our team and they’re remembered by our team. Our support team and our training team almost feel differently and see them differently because they become more human, it becomes more personal. Of our thousands of customers that we have here at Service Autopilot, those that actually do things like that, they suddenly stand out. Our whole team knows who they are. That’s a really great lesson. How can we as owners and salespeople do that so that we stand out among the pack?
I hope this helps and I hope you can find a way to apply it to your business.
In your lawn care business you’ll have two types of overhead. You’ll have fixed overhead and variable overhead. I have a separate video that explains variable overhead.
Fixed costs make up fixed overhead. An example of fixed cost would be rent, insurance, admin salaries, office expense, depreciation, utilities, and the cost of your estimators.
The characteristic of a fixed cost is, it’s one that doesn’t change very much and it’s not affected by activity. Whether you perform a lot of work this week or you perform very little work this week, your fixed costs, or fixed overhead does not fluctuate. It remains fairly constant and it is fairly easy to predict.
You want to be very slow to add these fixed overhead costs because, if there’s a decline in your business, it’s hard to get rid of these costs. If you go out and you sign a three year lease on an office space, it’s a fixed cost. You know every month your office is going to cost you $1,000 a month. If your business takes a significant decline, it’s very difficult to get out of that three year lease and eliminate that $1,000 a month expense.
Insurance on your office building is an example of a fixed cost because the insurance cannot be eliminated without eliminating the lease. Therefore, that insurance cost doesn’t go away until the lease itself goes away.
Admin salaries are fixed. Yes, you could let those individuals go but, generally to keep your business operating and running, you have to keep your admin team. Therefore your admin salaries are considered to be typically allocated in your fixed overhead numbers.
Watch the video about variable overhead and also watch the video about an elementary way to calculate fixed overhead within your business.
Stop Underpricing Work… It’s Critical to Your Reputation and the Future of Your Business.
If you are underpricing and undercharging for your lawn care work, you are doing your clients a huge disservice. Let me explain.
I get a lot of pricing questions. Companies aren’t sure how to price and new guys in the lawn care business have a tough time figuring out how to price. Estimating is also challenging. I get that.
This is a different take on it. It’s not the question I usually get asked, but I want to make a really important point. If you are undercharging your landscape clients, you are doing your clients a massive disservice.
The reason I have this opinion is because most of us, and I’ve said this before, started out as the “low-ballers,” which is a word we use in the industry. These guys are the ones underpricing and undercharging. They’re the low-cost provider that’s screwing up their whole business because every time they go out to compete for a bid, they’re giving the ridiculously low price that makes it impossible for them to make any money. That’s a “low-baller.”
If you’ve been in the business for any period of time, you’ve probably complained about this many times. You’re fed up with the guys that are underpricing work. They don’t know what they’re doing – blah, blah, blah. There’s a temptation to adjust your pricing to match their pricing. But, what happens if you do that? Then, you won’t make any money. This is the reason why it’s critical that you price right and do not undercharge your client. It’s a vicious cycle.
For example, if you do not price your services correctly, you cannot afford to hire the very best people. If you don’t hire the best people, then you don’t deliver excellent service to your clients. This is a huge disservice. If you don’t price your business correctly, then you can’t afford to train your people. Therefore, the work you give to your clients is sub par.
Worse, and an even a bigger sin, is the advice that you give your clients is wrong. If you tell your clients that they need something or you incorrectly diagnose a problem, you are wasting their money. If you are wrong, they could lose a plant, or a tree, or their turf could die. You have done them a huge disservice.
The way you give your clients great service is by charging them fairly and not trying to match your competitors that don’t know what they’re doing. It’s your job to price correctly so that you can hire the best people, train your people well, put them into safe trucks that are insured, and hire licensed drivers to insure everyone is safe on the road.
I am not preaching here. The point I am trying to make is that you need to have confidence in setting the right price. It’s absolutely the right thing to do…for your business, your employees, and your clients. Clients want great service. They want great quality.
Yes, you will lose some clients to the low cost provider. Eventually, they will get burned and they will be back willing to pay fair prices.
So many guys complain that they can’t get into their market because everyone is underpricing. Think about one of the biggest companies out there. It’s TruGreen. Their name and their marketing has supported higher prices than many companies actually charge. Oftentimes, TruGreen prices actually tend to be a little higher than the market.
There are plenty of examples of guys that are in the marketplace charging higher prices and succeeding in a massive way. Your client wants a great product. If you want your sales team to be highly effective, and you want your marketing to work, then invest in quality and service.
It’s kind of like a circle, it takes a little time for your sales and marketing to get going. It takes a little time to reap the rewards of investing in great customer service. But, as the business gets a little bit bigger and there’s more word of mouth, and you get a little more marketing out there, it will all start to pay off. If you combine great service and fantastic quality, more people will see it and it will all start to come together.
Sales, marketing, customer service, pricing, quality, employees, your trucks, your reputation, how you dress…it is all connected. The core of it all is pricing. Don’t be concerned with what everybody else is charging. You’re doing your clients a huge disservice if you can’t be the great service provider.
Low pricing in the short-term might give your business a boost, but in the long-term you will absolutely pay for it. Have confidence to price work correctly. Figure out how it needs to be priced. Go out there and do it. Improve your marketing, your sales, and your customer support so that you can get the higher prices.
How To Make Selling To Commercial Customers Much Easier…
Watch this video to learn the 1 simple trick…
This one concept will greatly simplify selling commercial work to large companies.
This tip will make marketing and selling to commercial clients so much easier. I am constantly asked questions about selling to commercial clients. There’s a huge intimidation factor. It almost feels, to many, like this giant unknown. How in the world do I do this? How in the world do I approach it? I’m going to give you one single concept in this video. It’s a mindset concept, but it’s critical to your success in selling and marketing.
The reason why I feel that I can actually answer this question is, for years, I was a partner in a commercial cleaning company. The only thing we did was sell to commercial clients. Not little commercial clients. Massive corporations. That was our focus. That was our niche. Some were public companies, some were privately owned, and some were owned by holding companies.
The point is that we had to get through all the layers of management to sell. That’s quite intimidating. Our clients all had properties all over the United States. Many had basically a footprint in almost every state within the United States. Again, huge companies.
Also, in the landscape business, I’ve had experience in selling to commercial properties. In this business, I’ve had to sell to smaller properties, property managers, HOAs, condominiums, bigger companies, and things of that sort.
Let me give you the key that makes it all so much easier. When you drive through your local market and you see the mall, and you see apartment complexes, and HOAs, and you see the big, multi-tenant buildings, and the multi-story buildings, and you look at that, at some point you decide that you want your lawn care company to land that property and all the maintenance needs surrounding it.
You’re picturing that outdoor building. Somewhere within that property is a guy that’s in charge. Let’s give him a name. Let’s say his name’s Larry. Or, the same could be true, you’re selling to Starbucks. Starbucks is this massive, somewhat faceless corporation that’s all over the world. There’s a Larry somewhere in Starbucks. There’s a Larry somewhere in this big six-story building.
Larry is not that different from you. Larry’s married. He’s got a wife. He’s been married for a number of years. He’s got two cars. He has a mortgage payment. He probably has a mortgage on at least one of his cars. He’s got a couple kids. One of his kids plays sports. Maybe one plays a musical instrument.
They really want to take a big vacation this year. They’ve got a mother-in-law that is ill that they’re helping to care for. He’s got some brothers and sisters that live in other states that they don’t see very often. He goes to church. He’s usually really busy on Sundays, and Saturdays are all about doing chores around the house, and doing the family thing, and going to all the kids’ sporting events. Then Monday through Friday, it’s back at the grind.
Then, Monday through Friday, when he’s at work, he’s got stresses. He’s got a boss. He’s got all these employees that cause him some headaches. He’s got things that are falling through the cracks. He’s feeling ridiculous pressure, because everybody’s giving him too much work. Everybody wants one more thing. He’s got to sit through one more Monday meeting. He’s got to answer one more stupid question from the boss that he halfway feels might be slightly incompetent.
You can just imagine what goes on in Larry’s life. It’s just like everybody else. There’s all this junk going on. He wants his life to be simpler, better, easier. He wants his work life to be better. He wants to get all kinds of nightmares out of his job. If he could get them out of his job, things would be better.
I’m painting a long, detailed picture, but you’ve got to think about your client this way. If you focus on dealing with Larry and not Starbucks, or the HOA, or the six story building, it’s so much easier to imagine selling to this person.
It’s so much easier to imagine putting together a 12-month marketing campaign where you’re mailing things to him and following up with phone calls to him. It’s so much easier to take a personal approach in both your conversation and in your marketing when you’re talking to Larry. Larry’s not that much different than you, or maybe not that much different than some of your friends that are very close friends. When you picture it that way, you can get in the door so much easier. You can make your marketing work.
For example, if you’re sending a marketing piece to Starbucks, how do you write that? A lot of people write it as, “Hey Starbucks, we’re great. We’re wonderful. We’ll guarantee your satisfaction. You’ll love us. Do business with us here at Total Landscape. We’ll solve all of your needs.” That’s boring. That’s corporation-to-corporation speak.
If your marketing is personal … and imagine that you find out who Larry is, and you find out that his son loves baseball, and Larry played baseball all the way through high school … what if you initially send Larry a FedEx letter? It’s something personal, something that you wrote directly to him. It has your name on it. It’s Jonathan, in my case, writing a letter to Larry about how we can make his life better. It’s written in a personal tone, not a corporate-speak, business-speak tone.
Then, you follow up with a phone call. Of course you get his voicemail, so you leave a nice message. Then next month, you follow up with a lumpy package, maybe a box. Inside that box, there’s a baseball, and it’s got a signature from somebody that is a popular baseball player, maybe in the local minor league market. Then later, you can send him a ticket or two to the local minor league game. I’m might be giving you a bigger example than what you’re willing to spend money on, but it’s that kind of a concept.
What are you doing here? You’re now marketing to Larry. I’m doing something personal. We’re connecting on a personal level. Corporations don’t matter. The corporate level doesn’t matter. We’re connecting as people with common interests. That’s how I get Larry’s attention, because the other 20 guys that are trying to get his attention are using all this business-corporate speak.
In our commercial cleaning company, we grew that company 100 percent with relationships. We took guys to baseball games. We gave them football tickets to games in their local market. We flew them out to trade shows. It was very common to have trade shows in Vegas, so we’d fly some of our clients out to Vegas. We’d buy them dinner. We’d take them to shows. We sponsored their kids’ baseball games. We did a million different things, because it was all relationship-based stuff. The conversations all started, and we worked all conversations to get in the door. We tried to turn those into personal relationships.
Sometimes they didn’t turn into personal relationships. Sometimes we got the business because we had a personal relationship with somebody else who highly recommended us to their coworker that managed another property. Maybe we never developed a great personal relationship with them, but the core personal relationships through these companies are what got us in the door. Your core relationships with your property management company, or the person at the property management company, are going to spread you through the property management company, or at least give you the opportunity to bid a lot of work.
The key to everything is to think in terms of a person. When you’re writing a marketing piece, you are imagining a person and what their life is like, and what their day looks like, and what their weekend looks like. You’re writing something from you to that person. You’re imagining them. Imagine your closest friend, if you were sitting down writing them a letter, and trying to get them to use your service. How would you talk to them? It’s totally different than how you would talk to Starbucks. This completely and dramatically changes your marketing.
Then, the same is true with the person selling. When you walk in the door and you’re trying to meet with someone, it’s far less intimidating when you’re thinking about that one person and not the company. Yes, Larry works at this big, giant company, Starbucks, but honestly, Larry’s life isn’t exactly as exciting as it may seem. Larry goes home and has all the exact same problems that everybody else has. Yes, he works at this giant company, and maybe he’s the big purchasing manager or the facilities manager, or maybe he’s got a C-level title. Who knows what the case is. But, at the end of the day, he’s a guy. He just happens to have done the work to be running the business. He’s still a guy with all the same stresses and concerns.
When you think about it that way, dealing with him is so much less intimidating. The idea of asking for the opportunity to talk to them, the idea of mailing something to them, the idea of following up with them is much less intimidating. You’re just following up with some guy. He’s not super special. He’s just some guy.
Think about everything from that direction. I think in your mind, it will simplify this task of breaking into the commercial market. It will simplify getting commercial accounts. Then, it will guide the way you speak, and talk, and present, and act. The relationship of it all is how you grow this business. That’s why it’s an investment. You don’t suddenly start a commercial business, and tomorrow have 10 million dollars in commercial work. You make an investment in people, an investment in relationships. It starts out slow, and if you work those and invest, in time, the whole thing blows up into this big company.
The very, very, very best sales guys have a network of relationships that they have spent an incredible amount of time developing that they can go back to. That’s why, in the commercial business, when you’re hiring commercial sales guys, you have to get the guy that has the relationships. You go get him. He’ll cost you a lot of money, but he will grow you far faster than the guy that’s just starting out, that’s never done it, that doesn’t know anybody, because he has no network. He has no relationships. You have to build that. This is how you build it. Good luck.