Pictured above: Outdoor Expressions PA Owner LaMont Hess, center, meets with The Harvest Group for their perspective on the Turnaround Tour.
Photo by Jon Arman
Challenge: Bad weather, bad startups.
Overall, it’s been a rocky start to spring for Mechanicsburg, Pennsylvania-based Outdoor Expressions PA. Bad weather has prevented a good startup on spring cleanups. As a result, this Turnaround Tour company is falling behind on startups. Owners LaMont Hess and Kimberly Rowe have found a source for temp workers, but there is a higher price to pay.
Harvester’s recommendations.
Have Outdoor Expressions use this temp workforce to get caught up, to make certain their customers are taken care of and to start spring off on the right foot when it eventually comes. The higher cost for a temp workforce costs a lot less than a lost customer. Remember: you can’t make money on a job you don’t have.
Challenge: New maintenance contract sales.
Outdoor Expressions PA got off to a late start this year going after new maintenance contracts. They went after some work and went to battle with several low ballers. The company went high ball on their prices with low ballers and got beat in this battle. That is not a war to be in.
Harvester’s recommendations.
Get solid selection criteria in place that better screens out the low-ball customers. Yes, overall we want to achieve a 45 percent gross margin but not necessarily on all jobs. Their pricing was set at a 55 percent or more gross margin, which probably is a bit too high to start with on maintenance when entering a market space.
We should get very accurate on our costs to perform the work in the areas of labor + burden + WC + materials, then markup the cost to perform the work from there. We will probably need to come in with our pricing initially on maintenance contracts to arrive at 40 percent gross margin. This can be arrived at by dividing our costs by the reciprocal of the desired gross margin or 0.60 to arrive at a price that will achieve 40 percent gross margin.
Establish existing customers as primary targets to get more work since the relationship has already been formed. Get real cozy with your top accounts, and remember, relationships rule! Also, seek out extra work opportunities with your existing accounts. Consider using the Harvester’s SLMP Sustainable Landscape Management Program to build a lasting funnel of extra work sales.
Next, we suggest building a funnel full of what we call the 2@200 program. Seek out the customers you want and begin a campaign to reach them, and we need to get a full funnel as of right now it is low.
