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July 2013 Web Extra: Increase your profitability by specializing

July 9, 2013 -  By

When you first open your business, you’re just thankful customers come your way.  Once you’ve been in business for a while, you realize that not every customer is a good fit for you. As I’m sure you know, it’s actually more profitable to be selective in the type of customer you serve and the type of work you do for them.  Here are a few ideas to keep in mind when you are determining who your best customers are.

When you can narrow the market,

  • You will encounter fewer surprises on the job because your experience helps you anticipate situations.
  • You have it down to a better system, so the work can be done more efficiently.
  • You can market easier (and less expensively) because you’re not trying to reach everyone.
  • You can charge more because you specialize (just compare what you pay a specialist compared to your family doctor).

There are two key areas where you can specialize: 1). type of customer and 2). type of work. Here are some ideas to consider:

  • Residential versus commercial;
  • Home owner versus property management company;
  • Geography: certain county, certain subdivision, city, etc.;
  • Size of property;
  • Climate zone or map zone; or
  • Demographics: age (young, retiree ), ethnicity, kids, pets, lifestyle, etc.

Within the type of work, you may decide you want to focus on lawn maintenance or design/build or a garden center. (It’s funny, I have some lawn maintenance companies say that you can’t make money in design/build and then design/build companies who say you can’t make money in lawn maintenance. They have each found their main preferred service line!)

Within the service line you can specialize more. For instance a design/build firm might want to specialize in water gardens or hardscape or retaining walls, or shade landscaping.  And the list continues. A local landscaper near me has specialized in using unique conifers with the idea that the yard still looks pretty in the winter (we don’t get much snow here).

There are several ways you will arrive at how you specialize:

  • Projects or customers you love;
  • Projects or customers you don’t enjoy;
  • Jobs where you lost money;
  • Jobs where you made a great profit;
  • Location; or
  • Your accounting software.

Take a look at your current accounting system and see what changes in setup might help you target, track, and analyze your customers, product lines, and jobs. A good accounting software package is a powerful tool that will help you determine and refine your most profitable niche.


About the Author:

Monica Muir is a Green Industry accounting expert with Muir & Associates.

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