Hey, how’s it going? I’ve got a question, and the gist of it is, how do you market a brand new lawn care business? I’m going to read you the question, and I’m going to answer the question.
I’m going to start a lawn care business in Southern California this coming summer, how would you suggest marketing a brand new business that is in its infancy with little experience? My father-in-law is very well connected in commercial real estate, and as such, I have developed personal relationships with the owner of a large real estate office as well as with the office’s property management company.
Should I begin by seeking out residential accounts? Should I pursue commercial accounts? Or commercial properties such as apartments, condo’s et cetera? That’s the gist of the question.
I have answered plenty of questions about how to get started, so if you want marketing advice or that type of advice, go search some of the more … well, they don’t have to be the more recent, but I remember not long ago doing a video where I gave you like the seven steps to start the business from a marketing and sales perspective.
I’m going to answer this question, but give you a little bit angle. First and foremost, set your expectations correctly. They are, it will be hard this first year. It’ll be hard for many, many, many years, but it’ll be especially hard this first year. Knowing that, approach this first year as the year where you’re learning the business, you’re learning what services you like to provide, what types of clients you like to serve, whether you like commercial or you like residential, you’re going to have to figure out the marketing.
My point here is, and I’ve said it before, it’s going to be a little slower going than you might expect. That’s okay, that’s the first year. I’m not saying, don’t be aggressive, I’m just saying have accurate expectations as you enter the business.
Number two, you’re asking about commercial or residential. They’re very different businesses. I actually don’t think it makes for a very good company to do both. I either want to be in commercial or I want to be in residential, so I’m going to give you some pro’s and con’s of each.
the great thing about commercial is that if you have a point of entry into that market, you have some contacts, you have a way to build that business, then you can go fast, because the account value, the size of the property, the dollar of the contract is much higher and therefore you might need a whole lot of residential properties to equal one commercial. If you have these ends, then you have the means to build your business much quicker.
The dilemma on commercial, and I’ll go back and forth here, one of the dilemmas is if you don’t know what you’re doing and you don’t know how to price it, you go in some of these bigger contracts, you could very well lock yourself into a deal where you’re losing money and it puts you in a very bad position.
It kind of goes back to my first year. There’s a lot of things you want to learn and one of those things is how to bid work. The pro of commercial is you could go big fast, the negative is you could go big fast and lose money. Another negative on commercial is it pays slow. There’s no way to get around it with most contracts. They dictate the terms. They’re going to pay in 30 days, 60 days, whatever the case may be, whereas in residential you can be creative. You can get paid as soon as the work’s done, or you can get paid every week by credit card, and that is a huge stress relief to get paid fast and speed up your cash flow.
Another difference is commercial is going to come with a lot fewer phone calls to the office, residential comes with a lot of phone calls. You need a bigger team to work the office, you’re going to have a lot more phone calls, you’re going to have a lot more bids and estimates you have to give, a lot more calls, “Hey, can you do this,” or “I’m having that problem,” it’s much easier from that stand point with commercial. You can usually run a bigger dollar revenue business with a smaller office team.
One of the negatives of commercial is you’re generally going to re-bid a lot of your deals every year, whereas in residential, if you don’t have contracts, every year you just keep showing up. I could go back and forth through the pro’s and con’s. I would say that commercial’s a very interesting business to build fast.
I personally believe there’s more profit in residential if you build residential to scale, beginning with a lot of clients, a lot of accounts and a tight density, a small area. I also like residential because you can immediately cash flow your business much easier than you can with commercial. I also think residential’s easier to get into, that’s why you do see most companies start residential, because you can learn how to bid and work properties.
Those are some of the differences, there’s a lot more. You need to pick what’s right for you, that’s part of what this first year is. I started in commercial because my experience was in commercial, so initially our business was all commercial, and I felt the real money in the long term with a bigger residential business, there was more profit in big residential than there was in big commercial, and that’s the reason why I transitioned.
Finally, as I kind of said at the beginning, everything’s going to be harder. Everything’s going to take longer than you think, so when you have an end, you have a competitive advantage, a slight edge, it pays to take that edge. You gave the example of having an edge, meaning you have this opportunity to get into commercial real estate, or you have a relative that’s in commercial real estate that can get you accounts or open doors for you.
Given that edge, I would be tempted to play that out and see if you can build a business around it. Be very careful with your pricing, don’t be afraid to ask for help, don’t be afraid to pay a consultant for advice, don’t be afraid to make sure that you are pricing your work correctly from the beginning so you don’t get trapped in a bad deal.
Then, after that, once you build this business and you take that slight edge, and hopefully it allows you to go fast, much faster than if you were starting from scratch with no contacts, if later you find you’re serving a property type, a client type, or you’re in commercial and you’d like to be in residential, don’t let that become a trap. Always think about your business from the standpoint of knowing what I know now, what is the very best next move? What should I be doing? And forget about what you’ve done in the past.
There’s a risk that you get into commercial and it’s not yielding what you wanted, or it’s not the business you want and you just stay in it, and you never make the transition to residential, or you never make the transition to a different kind of commercial, so be careful. That’s why this first year is about figuring it out. Good luck.