Can a commercial maintenance co operate successfully compete and keep up in the domestic maintenance market?
My business is almost 4 years old and I started in the domestic market (dont we all) mainly maintenance and tidy ups etc. Knowing a few people and being in the right place at the right time gave me a massive head start in to the commercial game and within 2-3 years I was 80% commercial maintenance and one off shrub work etc. Now almost at 4 years im mainly full on commercial maintenance and work with only 2 days of domestic maintenance through the summer, 25/30 gardens a day charged minimum £20 to £40.
The money is good, I aim for a minimum of £450 to £500 per day so both the days well exceed the target but with it comes the hassle of dealing with so many people, not only that but I think my guys find it hard to go from using a Scag in a commercial environment in an industrial estate to planting Mrs Jones sweet pea's! (which was a complaint).
Im pulling my two maintenance runs in to question after I had 3 complaints in the one day;
Mrs jones sweet peas! they were not planted correctly and she had a point.
Not bringing support canes for a new hedge (which I never planted and expected to order and install as part of the package (£25 a visit!)
Spending 7 mins in someones garden and charging £20 - there are 4 of us using 2-3k worth of machinery, chemical etc.
My commercial work ranges from housing estates, industrial units, council work etc, Standard ranges from 'council standard' to cut and collect in my premier estate which makes up 25% of my annual turnover - standard exceeds some domestic gardens.
Has anyone else been in this position, the money is there to keep them on but I feel unless its a 'mow, blow and go' and the client is happy with this then I just cannot do it.
Any thoughts guys?
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I successfully toggled between commercial and domestic Matt.
The bottom line is.......the bottom line.
Go where the better profit is.
If domestic maintenance is lucrative then develop a team that is dedicated to domestic work.
If commercial work is more lucurative then dump domestic.
Also, go to where you can best deploy your assets (be it staff and/or machinery) which is hopefully the same as to where the best profit is...
That somewhat links into Phil's comment but sometimes you can fore-go a lttle bit of profit for an easier life.....
Look at minimum prices/profits/timeslots/travelling etc .... We work on timeslots which helps profits and reduces costs
What else can be used other than time slots?
I've been pondering this since I first read it and still can't see what you mean. Sorry if I'm being thick!
Have you considered putting a seperate team out to just do Domestic work? Plus one offs etc. to fill the time (if needed) If they're turning over about 1k for the run do you think you could employ 1/2 guys with a small van and 21 mowers to service it?
We run 'two and two' with me floating. Commercial and domestic fit in very nicely. It's all to easy to ditch a small domestic client, but money is money and a balanced portfolio spreads the load should you lose a big commercial contract. Relying solely on industrial type maintenance would become rather boring I would think.
Possibly me being more selective when taking on domestic Gardens and dropping the ones which cause me hassle or stress.
Thank you for your replies
The reason for being in business is to make a profit, hopefully a good one. This can only be done by marketing to the right people and getting the right price for your services, and running an operations system that is efficient.
Personally I find that private residential work is far more profitable than commercial work, and gross profit margins run to about 70%, which equates to a NPBT of around 30%.
Sorry Adrian, but I don't think that making a profit is the only reason to run a business. Agreed that making a profit is essential, but many(including myself) run a business for the freedom it can bring, the profit you make and because we just love doing what we do!
Hi Colin.
I know it's not the only reason (making a profit) but it certainly is the main reason, because without profit there is NO business.
For the past three years or so, I have studied how to concentrate our efforts on marketing for high profit, (which is hardly ever seen in this industry), by developing a strategy and marketing plan with proven figures from people that have developed big businesses in this industry.
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