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Profit Power: How to become “King of the Mountain” in your market

June 19, 2019 -  By
Photo: iStock.com/Toltek

Photo: iStock.com/Toltek

If you could wipe out all your competitors and have a monopoly, you would be able to charge whatever you wanted. You would quickly raise your profit to 20 percent, and probably much higher.

Even though you can’t build a monopoly in the green industry, there is a way to “replicate” having a monopoly … let me explain.

Many years ago I worked with a landscape design/build/maintenance company, whose owner came to me right after 2008. He was losing money for the first time and knew he needed professional help. After I worked with him, and gave him all my recommendations, he was hesitant to put my ideas into action. He told me that he “sat on my ideas” for a week scared to pull the trigger because I was suggesting some big changes to his business. Finally he decided, “Heck, I paid a lot of money for this advice, I had better put it to use.”

Within 2 years he was making 20 percent net to owner, and soon after he reached almost 25 percent net to owner.

What did we change that made such a terrific turnaround of his business?

Many things, and one of the most important: We helped him become “King of the Mountain.”

That is, we helped him identify the things he did in his business that were unique, that no other (or few other) competitors did. Of course there were many things he did that were commonplace, but there were also may things he did that were unique. And so we built on that uniqueness.

We also narrowed down the clients he served, the geography he worked in and the types of jobs he built. This bolstered this uniqueness.

General Electric under Jack Welch understood the value of being King of the Mountain. In fact, he made the decision to get out of any industry where his company wasn’t No. 1 or No. 2 in market share (i.e. where they were not King), and that is what helped GE become so dominant back in the day.

Since you will never be the biggest landscape provider in the industry, you must focus on developing a niche, where you can claim King of the Mountain.

And so with my client, once we defined his unique niche, we focused his marketing, and we used public relations to bolster his reputation in this niche.

This allowed us to develop a strong brand image.

We reformed the office and production staff so they could follow through with the clients in a way that reinforced the brand image we had created. This kept the clients happy even when they were not working with the owner.

His profit soared, and his revenue tripled. (To over $5 million in today’s dollars.)

A couple years later, when he decided to sell his business and retire (to Hawaii no less) one of his employees was so impressed with the company performance, that she and her husband bought the business from him, at a respectable multiple of just over 2.5, which is very nice for design/build.

Your Challenge: Identify a niche where you are (or can become) King of the Mountain, and fashion your operations, sales and marketing to support that niche. The saying goes that a niche will make you rich … and so this is how you get started.

The author is holding a Design-Build Growth Summit in Columbus, Ohio this August, where these ideas will be further explored.

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