From Residential to Commercial


The career path into the mowing/lawn maintenance business is a familiar one for many of us. As a younger person we loved to be outdoors and we also liked money. It didn’t take us long to figure out that by mowing lawns we could combine our love for being outdoors with our desire to make money.

We also learned that if we’re dependable, personable and not shy about asking for the business, we can find ourselves (perhaps to our surprise) with more properties to maintain than we had anticipated. At that point perhaps we stop and say to ourselves: “If I can cut and trim more lawns I can make more money.”

Well, that’s the start of it all anyway.

More than twice as many respondents say they get the majority of their revenues from single-family properties rather than commercial.

Some of us eventually come to the realization that our ambitions are probably beyond our capabilities, at least at that very early time in our careers and given our level of horticultural and business knowledge. We wisely recognize that we need formal training and perhaps mentoring or professional guidance to progress to the next level and actually begin building a business rather than just having a job.

Also, about that point in our knowledge of the industry, we conclude that if we want it to grow beyond maintaining lawns in our neighborhood and perhaps adjacent neighborhoods, too, we will have to acquire some larger commercial properties, as well.

That’s when we encounter a new type of customer — the property manager.

The property manager is a different type of customer than the friendly retired schoolteacher down the street. We learn soon enough that selling to and building relationships with property managers is entering a whole new ball game in the landscape services market.

Immediately, we learn that property managers have different goals and different issues than our residential customers. While aesthetics are important to both sets of customers, property managers face some severe financial challenges. The most obvious challenge is their budgets. One of their goals is to get the most amount of service for the least amount of money. Sound familiar?

But the appearance of the properties under their watchful eye must also meet certain standards. Their careers are on the line. In most cases they’ve developed specifications for the care of their properties, specifications that must be met to maintain customer traffic to the sites or to maintain properties’ rental attractiveness and rates. Property managers generally seek bids from multiple service providers. More than a few companies are usually eager to do the work. The competition for these accounts can be intense.

So the question becomes: How do we parlay what we’ve learned from our residential service experiences to get into commercial maintenance?

1. Licenses, insurance and certifications: We can’t and shouldn’t even contemplate competing for commercial properties if we don’t have the proper business license and insurance. Yes, sometimes we overlook these requirements in the process building up our residential business, but we shouldn’t. It’s risky. It’s very risky. The process of acquiring industry certifications (and being able to proudly attach those designations behind our name) shows that we’re serious about what we do and that we’ve exhibited a certain level of industry knowledge. Will it help us land commercial accounts? Who knows? It certainly won’t hurt our chances.

2. Can we consistently deliver the service? We will have to convince the property manager that we have the knowledge, people and equipment to service the account. Both small and large companies have their plusses and minuses. Smaller companies are typically more responsive and personal because the property manager has more access to the owner. But, larger companies can be just as customer-focused with key personnel, such as account managers.

As a smaller company we may want to sweeten our offer by offering weekend and holiday service calls for landscape emergencies and, if needed, perform storm cleanup after hours. Of course, once we promise it, we must deliver on that promise. This may not be in the original contract. We won’t forget to negotiate this and possible costs upfront.

3. What are the details, all of them? We must know exactly what services are included in our bid. Most maintenance contracts usually include mowing, blowing, edging, trimming and cleanup. Enhancements are usually excluded from the contract and will be invoiced once sold and completed. Excluding these enhancements can be beneficial because we can offer a lower monthly maintenance price. Generally, items such as irrigation repairs and storm damage are not included in the contract. They may be out of our control as a service provider.

4. Know our costs and have a game plan. We won’t just calculate manhours, as important as they are to our job costing. We will also account for equipment usage costs and materials. We have to consider the whole picture.

If we earn the account with an unwisely low bid, we’ll likely discover that we can’t fulfill the terms of the contract to the satisfaction of the property manager. That could sink our move into commercial maintenance almost before it begins. Property managers in most markets are well connected. Also, competitors will make sure the word of our failure gets out into the market.

If we’re confident we can deliver the service at our lower bid, we may consider to bid a contract with an eye to breaking even the first year of service, assuming we’re reasonably confident that we make an acceptable profit in the second and third years, assuming we can get a three-year deal.

5. Become a better negotiator. Apart from the initial negotiations involved in landing a commercial account we have to aware that we may be asked by property managers to throw in some extra service. We should be prepared for that. Conversely, once we get into the contract, we’ll almost certainly see some conditions on the property that we aren’t addressed in the contract that we can improve. It’s time to talk to the property manager.

6. Keep the bigger goal in mind. We’re getting into the commercial maintenance segment of the market to build a business not just to get a job or two. That starts with growing long-term relationships with property owners and property managers. We’ll do that by providing the best service and delivering the best value at the best price. If that isn’t enough — and we’ll learn that regardless of our efforts it won’t be for some property owners or managers — we’ll keep learning and improving.

This article is from the 2014 Green Industry Guide. Read the rest of the digital edition here. You can find products, brands, companies and dealers in the industry on the main homepage.