Landscape Management, October 2012
Design build backlog lengths n One to two months n Three to six months n Seven to nine months n Booked for the year Customer retention rates n 0 25 n 26 50 n 51 75 n 76 100 5 4 15 pulse profile Burt DeMarche President The LaurelRock Co Wilton Conn 76 2012 projected revenue 5 million Service mix 50 maintenance 50 design build Challenge Spring cash flow What are you doing about it For the last five years we spread out maintenance invoicing over 10 months This year when we did renewals we decided to make it a 12 month payment plan I really expected push back from people who didnt want to pay us in months we werent providing services but people were happy it lowered their monthly payment A few clients even prepaid their entire contracts S13 know what our margins need to be and we bill accordingly he says Maybe thats affecting some clients decisions because they find someone cheaper but I know what I need to make and Im here to make it When it comes to design build pricing smart contractors offer to scale back projects rather than reduce prices If we come in with a 5000 project and they only want to spend 4000 then well shrink it down or phase it in over this year and next year Swano says John Newman president of Classic Landscapes in Hampton Ga says the recession changed the way he sells design build projects Before I didnt ask for a budget he says Whatever it cost thats what theyd pay Now with the economy being tight I started asking for a budget and coming back with a proposal that meets it On the maintenance side he says his closing ratio has taken a hit because he doesnt want to get into a bidding war Instead of doing something for almost no profit wed rather let them experience what they will with the half price guy and then stand by and answer questions and be around for them when the phone call comes that says Hey these guys arent doing XY and Z On the lawn care side of the business Reindl says it doesnt make sense not to raise your prices every year Customers are not likely to complain about a 1 or 2 increase a year but if you wait a few years and try for 5 they are going to be shocked he says LM october 2012 LANDSCAPEMANAGEMENT NET 85 12 1 1 Asked only of companies that do design build Numbers dont equal 100 due to rounding At a glance rESiDENTiAL MArkET GOOD Consumer optimism is rising slightly BAD Discretionary dollars are still tight for many homeowners causing price shopping and negotiating UGLY National unemployment only has dipped below 8 percent two times since January 2009 April 2012 and May 2012 Asked only of companies that provide recurring services
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