Running a design/bid-build business or division is a double-edged sword.
(Note: I wrote this 2 years ago, and updated the message. It is more relevant today than ever!)
There are big pluses and equally big minuses to focusing on design-build or bid-build. The pros are growth and opportunity, and the cons will kill your fortunes if you aren’t careful.
Keep your eyes wide open.
First the Pros:
The timing is perfect for growth. From the residential perspective, many people are working from home and want their property to be upgraded into a paradise that only a design-build specialist can visualize and bring to life.
The “cocooning” trend – which was first coined in 1981 by Faith Popcorn, a futurist and marketing guru – will continue as our population shifts even more towards working from home. I predict this will be a multi-year trend that will buoy the entire residential landscaping market for years.
The demand is large and will also bring a steady flow of new potential maintenance clients.
From the commercial/municipal perspective, there are a large supply of projects.
And done right, this niche can make you a lot of money and bring satisfaction to your community and your employees.
The Cons are Insidious
The fatal flaw, which I see repeat over and over, is when a landscape business owner over-dedicates his or her energy into the installation side of the business, and thereby ignores the maintenance side, running it on autopilot or just assuming that it will do just fine by itself.
Why do owners spend so much time on design and bid-build?
- It is the hardest to coordinate
- Has the highest client expectations
- Has the most potential for costly problems
- Plus it is where all the sexy work happens and is full of instant gratification of a job well done
When this over-dedication happens, the maintenance side never grows to its full potential, and sometimes it even atrophies.
Ironically, when the owner is personally dedicated to installation, the profits can be overstated because they don’t account for the owner’s full overhead in that division.
The ultimate “con” is when the maintenance division(s) don’t maximize their growth, the salability and enterprise value of the business are diminished.
The ultimate “con” is when the maintenance division(s) don’t maximize their growth, the salability and enterprise value of the business is diminished. Click To Tweet
Your Challenge: Be More Strategic
Here are five ways to build your company more strategically:
- Give maintenance, irrigation service, lawn care, etc. the time it deserves. For example, if it represents 50% of your revenue, give it 50% of your time. You will be happily surprised at the outcome.
- Don’t make design or bid-build so complex that someone else can’t design it, sell it, build it, and run it.
- Treat design-build as a “mass customization” effort. What this means is don’t make every project fully and utterly customized, instead build repeatable processes into your business model, and develop underlying “mass production” techniques into your projects and offerings.
- Ensure your installation clients are not left hanging, but rather, are embraced towards the end of their project with a maintenance program and dedicated leaders to keep satisfaction peaking.
- Measure your legacy not by just how beautiful your projects turn out, but by how beautifully valuable your business becomes.
Every one wants a business that is a triple win: A win for your clients and community, a win for your employees, and a win for your investment of time and money.
Everyone wants a business that is a triple win: A win for your clients and community, a win for your employees, and a win for your investment of time and money. Click To Tweet
Ask yourself: What can you do differently to maximize the value of your business, while still having fun?
Regards, Jeffrey Scott
P.S. My Sales Symposium will help you grow and have fun, and show you how to sell more of everything, including how to cross-sell between divisions.