As most landscape business owners do at some point in their careers, Jerry Grossi, the CEO of Spartan Irrigation, got frustrated that the industry did not offer him a full year of business. While Spartan had been highly successful in the irrigation business, that still left Grossi with a few dark months of no irrigation work. Luckily, Grossi thought of a solution: an add-on.
“The irrigation business for us in the North is a seven- to eight-month business,” Grossi discusses. “We put the add-on service of putting up holiday lights on to our irrigation staff to make it a year-round business. The recurring funds continue throughout the year.”
Add-on services such as holiday light installation are a smart way for landscape businesses to garner extra revenue, especially during the off-months, and stand out from the competition. Add-on services, however, are in no way guaranteed revenue. In fact, if you are not savvy about what add-on services you choose, you could sink your business.
Here, business owners from various regions who run extremely profitable add-on services explain the things they considered when first including add-ons in their service offerings.
Your region’s needs
Bobb Mann is director of training of Lawn Dawg. Operating 10 locations in six states, Mann found that his customers all started asking for the same service: mosquito control. “Five years ago, we weren’t doing mosquitoes,” Mann explains. “All of a sudden people started becoming concerned about mosquito-borne illnesses.”
Mann quickly realized that instating this service gave him the opportunity to not only address his clients’ problems and improve his customer service, but also open up another revenue stream for Lawn Dawg.
Before Mann decided to join the mosquito control market he made sure that Lawn Dawg had qualified experts to implement the service. While mosquitoes are a legitimate concern in many regions, you have to do your research before adding the service.
“There’s certainly the barrier that you have to have the right people before you enter the market,” Mann says. “Second is regulation, especially pest control. Going from state to state, the requirements are quite different.”
Other companies, like Spartan Irrigation in Lansing, Michigan, recognized that not offering one small, significant service could affect their whole client base. For example, years ago one of Grossi’s clients went to another company for an add-on that Spartan did not offer. That company eventually earned all of this client’s business, leaving Spartan to lose the client completely.
That, plus the added money in the dead months, gave Grossi more than enough drive to begin researching and implementing add-on services.
“It’s kind of a defensive move,” Grossi says. “Next thing you know they are going somewhere else, and that company is poaching their lawn care.
Your profit centers
Just as you should research your state’s regulations for services like mosquito control, you should also spend some time studying your financials before committing to an add-on.
Years ago, when Chris Joyce of Joyce Landscaping Inc. in Massachusetts, looked at his financials, he realized the services of his company were disjointed and inconsistent. He knew that recurring revenue streams would streamline his business, but he had to figure out which revenue streams would and wouldn’t work with his business model.
As Grossi did with holiday lights, Joyce chose an add-on that fit into the puzzle of his business. And sometimes successfully arranging that puzzle means not adding, but ridding your business of an add-on or service that simply does nothing for your company.
“You have to treat each of the add-ons as separate profit centers,” Joyce says. “Why go do an add-on service that is going to drain your successful business? You need to understand your cost. You could be more profitable by getting rid of a section of business.”
After research, Joyce found that going to strictly service-based irrigation work and choosing add-ons in the green industry envelope integrated best into his infrastructure, and quickly thereafter his business saw a growth in revenue.
Having too many add-ons may not be profitable if you are not ready to be an expert in the service, but you also need to have the bandwidth to run the service. Just because a couple of customers have asked if you offer pool services, that does not mean you should add that to your offerings. If you do not have an employee who understands that industry or you do not have enough employees to successfully run the service day-to-day, you have to learn when it’s in your and your client’s best interests to not offer something.
“You have to know when to say no and when to say yes, and saying no is hard,” Mann explains.
Add-ons can be a great way to add clients and increase revenue. But as with anything, if you fail to research and hastily make decisions as to which services to include, add-ons can have the opposite effect. So add on wisely.
“You need to vet it out and realize what you are getting into,” Joyce says. “We’re doing a lot of things, but we are profitable at them.”