Friday, February 26, 2010

What's a business plan and why do I need one?

A - A good business plan, one that outlines how you're going to market your business, the areas you're going to focus on, the type of work you're going to perform and the prices you expect to charge are all key components of a good business plan.

My suggestion is to look for a local chapter of SCORE (Service Chapter of Retired Executives) to help you put this together (http://www.score.org/index.html). They will walk you through the process and give you sound advice on how to operate, insure, market, and administer to your clients.

Here are some other things you need to consider (which I think you already have in mind) but these are make or break items.

1) Pricing - most new business owners make the mistake of pricing themselves way too low as a way of enticing new customers to try them out. While aggressive pricing is OK don't give your services away. Landscaping businesses are expensive to operate (especially if you have employees) and while you think you may be making money because you have clients that pay you don't confuse cash flow with profitability. They are two different things.

Keep your prices competitive but not super cheap. Really low prices also can carry a stigma of being done by a "fly-by-night" operation. As a homeowner I'd rather spend a few extra dollars to go with a reputable operation that is reliable and using good equipment.

2) Marketing - I'm not a big fan of fliers. Sure they're cheap and relatively easy to put together but they have limited reach and limited appeal. Think of it this way, do you read all your junk mail? I'm guessing not. And the reason you don't is because these items are sent to you unsolicited.

Direct marketers will grudgingly tell you that if they get a 1-2% response rate they are happy. Or, put another way if you gave out 1,000 fliers and got 15-20 people to call you for a quote you'd be doing something. The only way this type of marketing works is by blanketing an entire area with your ad. That's when things get expensive.

I'd much rather see you focus on getting up a web site, advertising with your local yellow pages (both online and book form), doing some print ads in local newspapers (a classified ad under services offered will get responses), and look for creative opportunities to get your name out.

A nice looking pick-up truck with well cared for equipment that has your company name and number prominently displayed will get attention. The other thing to consider is offering new customers some incentives for getting your name out to their neighbors and family. Do something like - Refer a customer and get a free week of services, free weeding.... You get the idea.

3) Do a FANTASTIC job ALL THE TIME! Don't just do a slam-bam-thank-you-mam job because your best tool in marketing is word-of-mouth. People talk. Period. Not to mention that your work is on display for all to see. If you hack up my lawn I'm going to fire you and not recommend you. Do a great job and I won't want to shut-up about you.

4) Spend your money slowly and wisely. Don't hire too fast. Don't buy a bunch of equipment too fast but make sure what you have is in good working order. 

No comments:

Post a Comment