Photo: Mazelis Landscape Contracting Corp.Stephen Mazelis lost some residential customers in 2009 – 35 out of a roster of 275, to be exact. He downsized to one construction crew rather than two, eliminating masonry. (The pool business is not what it used to be.) He’s running leaner, and stronger.
Now, net income is up, and gross sales are slightly down.
This translates to a better profit margin for Mazelis Landscape Contracting Corp., which serves Long Island, N.Y. “I’m a big believer that there were companies out there that did well not because they were good at what they did, but because the economy helped them,” Mazelis says, speaking of a 10-year streak of solid business prior to 2008, when he noticed hesitation in his market.
Because of a strong winter and snowplowing revenues that kick-started 2009, Mazelis could spend $20,000 on a direct mail campaign to target new commercial maintenance customers. This effort paid off after the first phone calls in spring 2009.
Mazelis attributes his higher profit margin this year to big maintenance customers that he targets for service upsells.
Mazelis will craft his 2010 budget in a way that allows him to carry out direct mail marketing efforts and continue attracting commercial maintenance business. Prior to 2009, about 7 to 10 percent of Mazelis’ maintenance work was commercial. This year, it’s 25 percent.
“As the 2009 season kicked off, because of the advertising we were getting new accounts every couple of days,” Mazelis says. “Once we got onto a street, the neighbors called us. We recouped (the accounts) we lost and then some.”
Mazelis plans to match his 2009 revenue next year – though a key factor in starting off next year with a bang is snow business.
The down side: Most of Mazelis’ snow contracts are pay-per-push. “We are trying to get it so our contracts are 50/50 (pay-per-push and set price for the season), which will make business easier to budget,” he notes.
Additionally, Mazelis will stoke spring cash flow with 5 percent prepay discounts. A few years ago after a light snow season, Mazelis began offering this perk for customers who paid for all maintenance services up front. “In a month, we raised $50,000 in funds,” he says.
Meanwhile, he saves on postage and avoids monthly bookkeeping for those accounts.
The greatest unknown for Mazelis going into 2010 is equipment expenditures. In particular, truck repairs are always an unknown. “This year we had some truck transmissions go because of snowplowing,” he says, noting that each repair cost a few thousand dollars.
Last year, he cut an administrative employee; his wife now manages the books full time. “When you’re shaving $50,000 off the payroll, that really helps the bottom line,” he says.
Mazelis reviews a QuickBooks report of income and expenditures weekly. He partnered with some new vendors this year so he reduced dumping fees for tree trimmings and debris by $5,000. He’ll continue to shop vendors and work to keep costs down.
Meanwhile, Mazelis is constantly looking where he can sell more in 2010. He looks toward deepening relationships with existing customers and winning new accounts that fall into his business plan: continuing to build up commercial maintenance and keeping existing customers happy.
The author is a freelance writer based in Bay Village, Ohio.
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