Posted By Lauren Dowdle On Wed, Feb 11, 2015
Landing a large commercial account is at the top of many landscapers’ wish lists.
But transitioning into the commercial landscaping market requires more than just buying larger mowers and trucks. You have to change the way you and your team manage projects to truly be successful.
Here are the dos and don’ts of bringing in commercial lawn accounts and landscaping contracts.
Residential vs. commercial landscaping
Before jumping into commercial work, you need to do your homework.
“It’s a totally different animal,” says Gib Durden, vice president of business development at HighGrove Partners in Austell, Georgia. “It’s still cutting grass, pruning and planting flowers, but commercial landscaping is a totally different mindset.”
Switching between it 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, Ohio.
One major variant is that you rarely deal with the owner in commercial work. Your point of contact is probably not the decision maker, could be replaced at any time and has little say in what gets approved, says Terry Delany, president of ServFM in Fayetteville, Arkansas.
Profit margins are typically lower with commercial, but they are counter-weighted by higher contract dollar amounts. It’s a low-margin, high-quantity set-up, Delany says.
“For all of the things that are more difficult with commercial landscaping, it’s still easier,” he adds.
Where to find commercial lawn and landscaping accounts
Once you understand the difference between residential and commercial accounts, you can start looking for potential customers.
Use your network of existing residential clients to see if they 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.”
You can also drive around your service area looking for businesses with points of entry, such as a sign that needs replacing, windows that need cleaning or lawn needing repair. That can help get you in the door for maintenance work.
When trying to identify prospective commercial lawn and landscaping 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.
As for accounts to avoid, he says hotels, restaurants, low- to mid-income apartment complexes and nursing homes tend to be the worst.
Once you decide on a type of business you’d like to approach, go online and collect information on all of them in your service area, Delany says. Then, create a pamphlet aimed at that market, and start visiting the properties.
“We offer to bring lunch by for the office staff,” Delany says. “That nearly always gets us in the door.”
Building relationships when seeking new accounts
A big part of finding commercial lawn and landscaping accounts is connecting with the right people. You can’t just call companies out of the blue and expect them to give you the commercial landscaping contract.
“Cold calls and emails don’t work that well,” Durden says. Instead, he says attending community events or meetings will allow you to talk directly with the property managers. “Then, if you follow up with a call, it’s a warm call.”
There are also several 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. Its members are building owners, managers, developers, corporate facility managers, leasing professionals and asset managers.
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.
Bidding on commercial lawn maintenance and landscaping jobs
After you’ve laid the groundwork, it’s time to 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.” That’s why it’s so 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.”
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 some questions Delany 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 additional 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 this 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?
“You may not be able to answer all of these, but the more you think about these, the better chance you have of winning the account,” he says.
What not to do when expanding into commercial lawn and landscaping work
Part of taking the right steps to be successful in the commercial landscaping market means avoiding some costly 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. “In fact, without the right training, they will probably fail miserably and quit,” Delany says.
Commercial lawn accounts and landscaping contracts can bring in large checks, but make sure your business isn’t too dependent on one account. You need to have a good mix of property types. “You don’t want to have all of your eggs in one basket,” Schill says.
With the right business tools and 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.”
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