Listen to the audio podcast Part 2 of 2
If you run a snow and landscape company or any small business for that matter, it's absolutely essential that you, the owner, have a strong grasp on your finances, on your cash flow, and on your profitability. It can totally feel overwhelming. I know it was for me as I was growing and that's why I'm so excited to interview, Christeen Era, the author of Profit First for Lawn Care and Landscape Businesses. Christeen's going to share actionable insights on cash flow management, pricing, marketing budgets, and a whole lot more.
Hey, it's Jack Jostes and welcome to The Landscaper's Guide podcast. At one point, I had a significant amount of business and personal debt. I'd talk about it in my book. I had over $130,000 of debt, and it caused a lot of stress for me, and I didn't really know what was going on. Frankly, I didn't know what I was doing. I was in way over my head when it came to the financial aspect of my business, and I kept thinking, "That's why I hired my bookkeeper." But really what I needed to learn was that I needed to own the money. I needed to understand how it worked and then manage my bookkeeper and manage my accountant. Around that time, I listened to the audiobook version of Profit First by Mike Michalowicz, which is an incredible audiobook. It really helped me gain control of my finances and helped me then manage my bookkeeper and manage my CPA.
I got out of debt and it helped me save enough money to buy my first home. It was truly life changing, and that's why I'm so excited to interview Christeen because for the audience of this show, lawn and landscape companies, snow removal companies, this book has so much information that I know could help you. I'm also excited to share that I'll be presenting The Tree of Good Fortune: The Landscaper's Guide to Modern Sales and Marketing as a webinar on Christeen's platform on her webinar series on Tuesday, March 21st at 11:30 Mountain Daylight time. So if you'd like to join me at her event and get to meet her and some of her team, check it out at landscapersguide.com/events and you can register there. Now, let's get into the conversation with Christeen about how you can use Profit First to grow your company.
Part 1
All right, everyone, welcome back to The Landscaper's Guide. Today I'm excited to interview Christeen Era. She is the author of Profit First for Lawn Care and Landscape Businesses: Grow Your Lawn Care and Landscape Company from a Cash-Eating Monster to a Money-Making Dream. She's also the co-founder of Green Profit Academy, which is an accounting and consulting firm that helps hundreds of small and mid-size businesses improve their cash flow, post higher profits, and achieve stronger growth. In her book, she provides industry-specific information to help landscape business owners ultimately manage their expenses and increase their gross profit margins to as high as 65%. So Christeen, welcome to the show. What else should we know about you that I didn't already cover?
Christeen Era:
Thank you for having me. It's a pleasure. I always love to talk about any of these topics when it comes to profit and growth in your business. So what else do you not know about me? I am a Pumpkin Plan strategist as well as a Profit First mastery level professional and also a Fix This Next advisor. So we work with clients on all the facets of growing your business, understanding your numbers, and just really leveling up while maximizing your profit.
Jack Jostes:
I love it. And so for people who may not have heard of Pumpkin Patch or Profit First, well, who is Mike Michalowicz? I'm a big raving fan, but tell us a little bit about him and also what is Profit First at a high level?
Christeen Era:
Mike Michalowicz has written several books and I'm a huge fan as well and he has another one coming out here shortly that is fantastic. I've had a bit of a preview there. So Pumpkin Planning and Profit First and Fix This Next, he's got Clockwork. So really, Mike Michalowicz focuses on the problems and challenges that us entrepreneurs have in business. We're not the most well-rounded people, but we've got a lot of grit and definitely, we try to push through things but not always with the best solutions. Mike Michalowicz has really done a fantastic job on hearing our challenges and the areas that we want to address in our business because we all have different strengths and weaknesses and then producing content in these amazing books that are easy to understand, methodologies that you can implement in your company and follow and even delegate to your team, which is great. So, you're not the only one moving the needle, and he's very focused on the success of entrepreneurship from marketing to profit to growth strategies.
Jack Jostes:
Great. And Profit First was recommended to me, I read it maybe six years ago, and I had a lot of debt. I had over $135,000 of business debt. I had personal debt. I had no idea how money worked, and I always thought, "Well, a lot of this is my bookkeeper and CPA's job." I really had a poor mindset around that. The book Profit First helped me understand money and it gave me a framework to implement, and I fired my CPA and my bookkeeper once I started learning about it, partly because I've started paying attention and I was like, "Well, I need to work this system." And I found a CPA through the Profit First certified advisory website or whatever, and he really helped me and then I got my bookkeeper on board with it and we're managing Profit First now for five years.
It was life changing for me. It helped me pay off my debt, save, and then ultimately buy my first house. So I'm a huge fan of Profit First, and when I talk to people about it, especially my clients who are lawn and landscape companies, and I talk about creating different bank accounts and assigning a percentage of every dollar that comes in, many of them say, "Well, Jack, that's wonderful for your business, but my business is seasonal and I could never have a system like Profit First because I'm seasonal." So can you tell us what is Profit First specific for lawn care and landscape businesses, all of which have some level of seasonality?
What Is Profit First?
Christeen Era:
I have to say, Jack, you've touched on so many great points from firing your bookkeeper to how Profit First changed your business to your journey, and there are so many other business owners that we've worked with that share the same thing. So I love that you're connecting with these, and I can totally relate. Profit First is a cash management system. It makes it easy to understand where you're spending your money in your business and how your business needs to be supported by the revenue that you're making in addition to how you, the owner, should be supported. It's a very, I would like to say, basic system that's kind of like the envelope system where you can understand how to manage your money and make it work for you in your business based on different areas of needs of your business. I think that's a simple way of putting it to where you don't have to be a financial wizard or have a degree in accounting in order to implement and understand the Profit First system.
Jack Jostes:
I agree with what you said. It really simplified it in a way that is very manageable for me. And I know, with the help of my bookkeepers, I can manage it. I can do most of my monthly financial requirements and honestly under a half hour a month. We have enough of the right systems and spreadsheets where it's more of monitoring them and making decisions. And one of the analogies that Mike makes in the first book is like having food on your plate and you can see if you have too much food on your plate. And I really feel like it's that simple. How does Profit First work with landscape companies or snow companies that have major equipment purchases? How can Profit First help with that? Because all of these businesses are very equipment intensive.
How Does Profit First Work With Landscape Companies Or Snow Companies That Have Major Equipment Purchases?
Christeen Era:
I agree, and I have to say what I found when I started really diving into the methodologies of Profit First and how we could maximize these methods in this industry, equipment was a huge pain point. It was something that was unknown. It's one of the biggest hidden bleeds in any lawn care landscape and snow removal business because the equipment that this industry needs in order to function and run their business, it is, I would say, one of the most demanding trades out there when it comes to equipment because there could be heavy equipment based on your business model. You can have more equipment because you're working on bigger properties versus less equipment and more manpower because you're working on smaller properties.
So depending on your business model, the equipment can be a huge pain point and not understanding how you can leverage your equipment as an opportunity and as a profit center can be almost like an unsolved puzzle that these people are trying to sort out. So based on your revenue and tiers, just like with Profit First, the whole methodology is based off of the revenue tier and you can understand what your spend is in your business and if you are in a healthy percentage of that spend when it comes to equipment and even labor. You're weighing and measuring your labor and your equipment together so you can understand, "Am I spending too much on equipment? Is it time for me to repair or replace this?" And really tracking your return on investment.
Cash Flow Management
Jack Jostes:
The way that I read Profit First first was I actually listened to it as an audiobook on Audible, and that's how I'm listening to your book right now and it's very good. It's also a book that I think you do need to read, but I wanted to let people know if they're curious about this, it's a very enjoyable audiobook. Many of our listeners drive for work or whatever. So check out the audiobook and the print book. I wanted to ask you in chapter two, you talk about lawn care and landscape business models. The people listening typically fall into these. They are some combination of design, build, construction, landscape maintenance, lawn care, snow removal, or some of them specialize in one of those, but I'd say most of our clients are offering many of those services. The billing and the costs involved in a construction project are very different from a recurring maintenance account. So what are some of the business models in the book? What are some of the different business models and how does it work when you have multiple business models potentially within the same business?
Christeen Era:
So when I started diving into this and I was seeing the complexity because I mean I've worked with contractors for over 25 years and lawn care and landscape businesses and different trades, and looking at the complexity of the lawn care and landscape industry, I found they were one of the most complex when it comes to managing their finances, managing their business, because there's so many different facets of this industry. And so I felt that the need to simplify and put this in buckets and there's like, which I call the blueprint. They'll say, "I have a one trick pony, or I have a three ring circus," to which they're either doing one service or they're doing more than one service offering. And so I kind of classified those as blueprints. And I said, "But hold on a minute. It's a lot more complex than this."
This is what I am seeing on a regular basis.
So we have four business models that I defined in the book, and I have a scalable growth business model matrix for each one of these. So they can see where they should be spending money and what the percentage they should be spending in these different areas of the business. We have the winter season service shift business model, and this business model can provide a combination of services and when the winter season hits, this company shifts from providing lawn care and/or landscape services or maintenance services to providing snow plowing services. So they're shifting during their winter season.
And then we have our winter down season business model. So it really identifies a company that's seasonal, that says, "Hey, we don't want to be in snow removal. We're just landscape or lawn care or landscape design or maintenance. And when winter comes, we shut down so we're seasonal," which companies like that, they get, let's say revenue for nine to 10 months out of the year, but then there's the other months that they're not getting revenue. So managing their finances during their down season can be a huge challenge for them, and we address that in the book. I've heard a lot of talk about struggles around down season and we have solutions to where they can survive all year and function like a regular business when it comes to their cash flow.
Jack Jostes:
And so what are some of the ways that you do that? If you're generating most of your revenue nine months of the year, how do you handle those other three?
Christeen Era:
The typical season is where they'll run from, let's say, March all the way to November. They're starting to tie things up in November. Through March and November, we're looking at what is their revenue, what's their projected revenue, what's their current revenue? And then we're allocating funds while the cash is coming in to support the business from the end of November to the relaunch again when March comes around. It's creating that little nest egg for your down season so you're not tapping into your prepayments because you're going to need those prepayments or deposits that you're getting for services and you need to infuse that cash when you're actually producing those services, or the company's going to fill pinch points when it comes to cash flow management because it's just not there. The cash isn't there. It's already been used up during that down season, and then it's really hard for them to understand, "Why can't I make payroll? Why are we having problems paying rent?" And it's because they already tapped into those funds that they should be infusing now into the business when they're producing those services.
Jack Jostes:
So part of Profit First is having these different bank accounts and you name them.
Christeen Era:
Yes.
Jack Jostes:
What are some of the names typically of these accounts and in particular for a business that has that seasonal lull, how many bank accounts might they have and what would the nicknames be for those accounts?
Christeen Era:
Sure. Let's start off with the first basic Profit First accounts. We have income, that's one account. Everything that comes in the door for your revenue goes into your income account. Then we have materials and subcontractors. That's a standard account that I like to see because it's usually one of those things that they struggle with tracking. They may not have the funds for the materials when they need it because it just got put into that one bank account and used for everything else, so we have that account. Then we have our profit account. A percentage of profit goes into your profit account, always start at least with 1% because then you start building it after that.
Then we have owner's compensation, which is sometimes called owner's comp. It's what you want to get paid as an employee because you are your most valuable employee in your business, that is you.
Like I say in the book, you should not be paying yourself peanuts. You need to be paying yourself what you need and not sacrificing yourself and your family and your life. Then we have our tax account. I don't know how many clients I've talked to where I say they have tax PTSD to where they're just like, "I thought I made money until I got my tax bill and now I'm paying the IRS on these payments and there's these interest and penalties," and there's just so much fear and anxiety around taxes. So the tax account ensures that you are putting the proper amount away for your taxes so you don't get blindsided for it. And the best part of it that I love is your business is paying your taxes. Not you, your business.
Jack Jostes:
Right. Well, part of what that last thing you said I think is an important emotional concept. Like when I would get my tax bill and I'm like, "I personally need to pay all of this tax," and I do, I mean, I'm an S corp and it comes back to me and I still have the feelings, but the feelings are much better now that I have the tax account and that all throughout the year, I have my money set aside to pay taxes, and then I just distribute that money to myself and write a check. It's not like I personally suddenly need to come up with tens of thousands of dollars.
But I wanted to comment on that point though, because I also have another bank account that I call the beaver pond, and I call it the beaver pond because beavers are meant to drink from their pond, because working with the green industry, I actually have some kind of the inverse of the seasonality of what my clients experience, and it was a challenge. And then when I called it an emergency fund, I was like, "Oh no, this is an emergency," and I freaked out a little bit. So I've just found a lot of peace in having different nicknames for my bank accounts. Have you found that with other people?
Christeen Era:
Yeah, and it's interesting that you say that. When we were going through this process, we had, what we call, Advanced Profit First accounts because the number six account before we forget about it is called your operating expense account. And that is what all your operating expenses for your business gets paid out of, that doesn't get paid out of these other ones. So when we move on to those advanced accounts, some of these amazing and powerful advanced accounts that we've utilized, we have come up with some really great names like positive word association. So we have our down season account for those seasonal businesses to where they're like, "I need to put 10% of my top line revenue away in my down season account, and that will support my business through the season and pay me. Like I get a regular paycheck without dipping into anything else."
So we have the down season account, which they like because they're like, "I'm not working, but I'm still getting paid and I'm going to come back and I'm going to still have all this money and ready to launch my season with success." So then we have another one which we called the flex season account, which originally when we started testing this out, we called it the slow season. Nobody liked the fact that their business was going through a slow season, so they're like, "No, our business is flexing.
It's not slowing down. We're just kind of going through this flex." And so it was allocating those funds to where the money wasn't coming in as much and in the abundance that it usually would do through the other months. There might be one or two months in the year where just things slow down seasonally based off of maybe it's the holiday season and people don't want to spend money or summer starting to launch, and everybody in June is going off to vacation with their family, and so they're not getting as much revenue from their typical ideal customers as they would.
That's the flex season. The other one that I love, that's one of my favorites, is the growth account. We intentionally put funds away anywhere from 1 to 6% into the growth account. And what it does is it really gives that ambitious owner the permission to spend money and reinvest funds into the business without filling that loss aversion when it comes to taking their profit. So they're not taking their profit and reinvesting it in the business or taking less profit to grow their business. They're intentionally putting those funds aside so that they can go in and grab and say, "We're hiring this new manager because we've planned for it. We're buying this equipment this way," and strategizing how to maximize your cash flow as you're growing your business and needing equipment, and they're taking it from the growth fund.
Jack Jostes:
Right. Because if you're taking money out of the profit account, you should be distributing that to yourself or at least some of it. So that was one of the things I liked in Mike's book was, he talked about at the end of the quarter, taking something out of that profit account for yourself. It could be as small as, I don't know, buying a pair of shoes or in a really great quarter, take more and buy something else as a reward. I think that's really important to do as a business owner because it's hard and it's stressful, and you should be compensated for the stress and the risk and the decisions that weigh on your mind.
Well, thanks again for coming on the show. I hope that for those of you listening that you found some helpful things. If you didn't find something to take away, I'm going to share my takeaway from the Profit First audiobook, which is to create a bank account, and start putting 1% of every dollar into it. I did that and Mike inspired me to do that, and then I was like, "Wow, 1% kind of adds up." Maybe I could do 2% and then it became 3%, and then I was like, "I'm going to give this whole thing a shot." But that was just one thing that I found was a little to-do that seemed manageable.
Christeen Era:
And that's the first step for sure, if you're going to even think about implementing Profit First or try it on for size to see how it works, at least go open up that Profit First account. And if your business can't do that 1% for you, there's a bigger problem. It will give you that indication like, "Hey, what do I need to do now to fix this so I can do 1% and keep that 1% in place?"
Jack Jostes:
Excellent, Christeen. Well, thanks so much for coming on the show.
Christeen Era:
Thank you for having me. It was a pleasure.
Jack Jostes:
Thanks so much for checking out part one of two, my interview with Christeen Era. We ended up having such a great conversation that I wanted to break it up into two episodes, so check out part two where we're going to dive into seasonality. How do you manage the seasonality of your snow and landscape while implementing the Profit First strategy and more? You can see links to that in our show notes below, or find it on Spotify, Apple Podcasts, or wherever you listen to The Landscaper's Guide.
Part 2
Jack Jostes:
Welcome back to The Landscaper's Guide part two of two, where I interview Christeen Era, the author of Profit First for Lawn Care and Landscape Companies. In this next part, we're going to talk about how to manage the Profit First system when you have seasonality in your business. How do you do this with fluctuating cash flow throughout the year? We're going to dive into that and more.
If you're listening to this before March 21st, join me on Christeen's webinar series where I'll be presenting the Tree of Good Fortune: The Landscapers Guide to Modern Sales & Marketing and doing some live Q&A with Christeen. So check that out at landscapersguide.com/events. And let's get back into the conversation with Christeen Era about how to implement Profit First for your lawn care and landscape company.
How To Implement Profit First For Your Lawn Care And Landscape Company
Many people, I think, are more so struggling to get to the point where they can go through the 12 months and not dip into it in those... Or not have the challenges in those two or three months of the down season. So do you adjust the percentage that you're contributing to those five or potentially nine accounts throughout the year? Does it change with the seasonality, or is it like here are the percentages for the year?
Christeen Era:
Yeah. So I think that's a great question and we consult our clients on that constantly to where you could take a Profit First assessment. Right?
Jack Jostes:
Mm-hmm.
Christeen Era:
On our website we have the Scalable Growth Business Model, Profit First assessment to where we dive in deeper on what's your business model, how much are you spending on equipment? Do you have a down season or not? So we take all those things in consideration and then you get the results of your current allocation percentages. So what you're spending now and then your target allocation percentages. So where you should be based off of your revenue tier and your business model.
So ideally, you want to slowly move from your current allocation percentages little by little to where you are in getting to your target allocation percentages. We don't advise people on their own to just change these percentages willy-nilly or kind of take a stab at it. Right? It's your dashboard. It's your cash management dashboard. It's going to maximize the performance of your business if it's used properly.
So if we're working with you and we can teach you and work with you around those strategies on how to turn each one of those dials and those percentages, we have gotten clients to the point where they know how to turn up those percentages or turn them down to maximize the performance in their business when implementing advanced methods of Profit First. But it has really given them this insight in working with us and the strategies behind it that has given them the ability and confidence to go, "Through this portion, we're going to increase our down season percentage because it's our highest income months." And then we can get there faster, or we need to replace equipment, right? Because they're just dumping money into repairing equipment and it's really just a loss. It's a continued sunk cost.
They're never going to get it back. They should have replaced those trucks, let's say two, three years ago. So they're like, "Okay, let's prepare for it." So they'll strategically plan to increase that equipment percentage to enable them to repair or to replace that equipment instead of continuing to repair it throughout this year so it doesn't happen again. So you can utilize your Profit First methodologies and your accounts to really get and maximize the performance of your business and your growth.
How Does Running Profit First Actually Help You Run A Better Enterprise For Your Employees?
Jack Jostes:
I like it. I love it. I love the overall mindset of Profit First because the book talks about how general accounting practices, it's like profit last. It's like profit is this leftover thing if you're lucky, but really you should be running your business to create a Profit First. Sometimes when I've talked to this with people they're like, "Oh, that's greedy and it's bad," and all these weird things. How does running Profit First actually help you run a better enterprise for your employees?
Christeen Era:
Yeah, that's a really good question. So one, it gives them job security because every business needs profit. Profit is the blood of your business. It's what's going to make you go. It gives you the life to move forward. It's what you need to infuse in your business, which is cash in order to grow your business. And growth at the same time, growth doesn't just have to be revenue. It doesn't have to be let's get bigger when it comes to revenue or let's get bigger when it comes to our profit.
Growth can also be employee engagement, investing in better equipment that gives you a higher profit margin, implementing systems and processes so you don't have to get bigger to grow. You can improve what you have and build on that. And that's where profit really comes into play because the better people you have on your team, you can bonus them out. You can pay them more. You can retain great help out there and continue to educate them and set up their professional goals and support them along the way. And the profit is what's going to allow that to happen because if you have a healthy business, it's just going to trickle downhill to your systems, your processes, what you're able to invest, the people you work with.
Jack Jostes:
Right. One of the things that I did this year was I actually shared my full P&L with my team and we found a bunch of things to cut, expenses to cut or softwares to replace and I was able to create a profit sharing, not in the retirement planning kind, but we set aside a certain percentage of profit and when we're north of a certain percentage, the amount that goes into the bonus pool goes up. And that solved a lot of problems in my company. And then we were also able to afford raises for people because everyone was like, "Hey, inflation."
Christeen Era:
Yes.
Jack Jostes:
And I'm like, "Yeah. That was the big impact for my employees." And so I found that by talking with my team about it that they were able to help find the money for their raises and we were able to retain most of the people.
Christeen Era:
That is, I mean, priceless because turnover is huge in a business. Finding good help is huge and when you have one of your key team members leave because the elephant in the room isn't being addressed, which is maybe a profit sharing program, bonus program like you're saying or increase in pay because usually they don't feel comfortable saying, "Hey, I need more." And it may not be their strong suit to communicate that.
So I think that's an excellent point in implementation of Profit First in your business and being able to retain good help and level up your people while you're leveling up your business.
Marketing
Jack Jostes:
Can we talk about marketing? So before we press record, you shared that you actually don't like marketing, although you've got your branded background with your books, and I think you have a pretty strong marketing presence, but I want to just talk about marketing in general and how does marketing play into Profit First and how much do some of the most profitable landscape companies invest in marketing per year? Typically, when I talk with landscapers, they're curious about what percentage of gross revenue are landscape companies spending on marketing?
Christeen Era:
Yeah. So I love marketing strategy. I love strategies around marketing. How do we get there faster? How do we really maximize this marketing idea? I really feel it's different for so many businesses because your business is not... I always say, your business is not John's business. Don't do what he's doing because it's not necessarily going to work for you. And especially in the lawn care and landscape industry, every business model is unique in so many ways. You can't do what the guy down the street is doing.
So I really do love the strategy behind marketing. It ties to several things from, who's your ideal customer? What resonates with your community and the people that you serve? What's your company culture? All those things really tie into marketing and having the right lingo that speaks not only to your ideal customer, but to your ideal team member.
So that's a really big piece of marketing, and it can have a huge impact on your marketing budget. I'm sure, you're like, "Yep, it absolutely can." Right? Because then you're investing those marketing dollars exactly where they need to go, and they're working for you because you set up a good foundation and filter to communicate your services to your right market. So it helps not have those PITA customers for testing out something that really doesn't belong in your business model.
So we have found that businesses that are really maximizing this marketing strategy, they are spending about two to 5% of their gross revenue on marketing just to continue to have that growth that they want and reach those ideal customers.
Jack Jostes:
I love that you mentioned your ideal customer. So in my book, in the Tree of Good Fortune, we call it your Hell Yes Customer. And I say that the three things that need to overlap are profit, demand, and passion. So there needs to be demand for the services. There needs to be enough people who will buy this. You need to be able to charge them profitably, and there needs to be a reasonable level of passion. I say reasonable. You don't necessarily have to love all of your customers, but if you hate doing the work, they're going to know and you're not going to succeed at that.
Christeen Era:
Yeah. Or maybe you're the wrong person to be doing the work, and you need to get that ideal team member that can love doing the work. That can be part of it too.
Jack Jostes:
Just before this call, I had my landscape executive mastermind, Tory, talking from Better View about how to focus on his Hell Yes Customer. He was actually able to cut $35,000 from his advertising budget and he nearly doubled the customer value, how much each customer was spending, without necessarily increasing his rates. Yes, his rates have increased, but that's the part of marketing that I don't think many people realize is who is buying has a huge impact on your profit and the labor problem.
Many landscape companies have problems with labor, but focusing on the right customers can mean that you don't need... What you were saying, maybe you don't need to grow on the top line as much. Maybe it's like, "Well, what if I had these customers and they were really profitable."
Christeen Era:
And really utilizing your team's capacity and not pushing them beyond that and stressing them out. So that's another piece of that. The ideal client and understanding who that customer is and what your market is, you can identify lost opportunity costs because one of the things that I hear a lot is, "Oh, well, this guy, he wants us to bid this job and it's way out here." And it's like, "Well, that's great and all, but what are you saying no to, if you go service this guy." What's the lost opportunity of revenue if you have one guy going out there to service their property instead of staying within your lane?
So that's another concept that I think that can be challenging in this industry is really thinking about the structure of the company because it's like that feast or famine. They have to say yes to every customer. And it's like, "Nope, you need a red rope policy. Who are you going to let behind this red rope? Is it going to be everybody or is it going to be the people you love working who fall in line with that service offering and really produce a high profit in your business? And don't overextend your team while doing it."
Jack Jostes:
Yeah, I love it, the red rope policy. That's excellent. Are we in a recession? It's a question of what is the source of the information? I don't know about you, but it seems like there's all these varying definitions. We've had two consecutive quarters of negative GDP growth. So that would constitute a recession, right?
Recession Vs Progression
Christeen Era:
Well, two things on that. One, the last time that I got together with Mike Michalowicz, he says, recession. No, we're in a progression. It's all about how we're going to look at this, right? Because really, if you have a good business model and you're servicing your customers, they're going to continue to work with you. So they're going to continue to spend money.
I haven't stopped with the areas that I care about in my life where I'm putting my dollars and the people I value working with. So I also implement Profit First. So I think Profit First really gives you that security to look at it as, "No, we're not in every session. We're in a progression. We're going to move forward. We're going to do better than our competition. And in fact, we're going to knock out competition out of the park." They're going to go bye-bye.
So that's one of the things that I think one of it is mindset. The other thing that I found working in this industry is that when we do go into a recession, the economy starts having this impact on things. Even during COVID, everybody grew in this industry. They're like, "Oh, we're going to grow by 11%, 12% this year." No, they were like 36% growth. When they're saying, "Oh, we're in a recession or this COVID thing is going to impact this industry." These guys boomed.
Jack Jostes:
Well, don't you think part of that is a product of the circumstances? So some of the circumstances... And first, I love the mindset idea. That's a good reframing of it for me just like the emergency fund is the beaver pond. Okay, cool. I'll give some thought to being in a progression. What was different though? I think about the last couple years or almost few years was the first two with the shutdowns and the lockdowns was that people were at home more, and they also couldn't travel. Personally, I didn't go to three weddings. I saved a lot of money by not doing that.
So there was the lack of travel, and then people were in their home maybe more than ever for the part of the workforce that worked remotely during that time. So that's part of my sense of why there was that boom. And then there was the whole stimulus and things, so that was different from other recessions.
Do you think that that was a big part of the boom? Because I saw the same thing with my clients. They had record growth during that time, especially for landscape design and outdoor living spaces. People are like, "Hey, I'm working from home. I'm looking at my ugly yard. I think I'm going to spend what I was going to spend on my vacation in my yard."
Christeen Era:
Yeah, I totally agree with you. I think that the world has had this shift in what matters to them and where they can invest or want to invest their money. And there's been a lot more joy found at home in their environment, working from home, creating the spaces in their home and outside living, and realizing how much it contributed to their mindset and their overall health.
I do think that that design build and we even did things to our yard that we wanted to do, but it was like, "Let's make this a better place that we want to spend time in." We think about, "Maybe we'll go on this trip and let's go on this trip." And then we're like, "No, let's just stay here in our own oasis and invest there." I even had a friend that got married, and instead of her spending money on a venue for her wedding, they completely redid their backyard. So that $50,000 that they were going to drop into a wedding venue, they dropped it into their backyard. They had a beautiful backyard wedding and everybody enjoyed themselves and it was amazing. I was like, "Man, I wish I would've done that. That would've been amazing to have invested that instead years ago."
Marketing Budget
Jack Jostes:
Yeah. That would've been a great idea. That is a great idea. So in a recession though, I mean, should landscape companies... How should they approach their marketing budget?
Christeen Era:
So I think it depends on the business model and the company. Some people are going to, depending on where they're located and the different customers that they serve. Some of them might be producing quantity versus quality. So if that's the case, they may need to invest more into their marketing to increase that quantity versus if you have more of a quality based service that you provide, you're still going to have those people investing.
And there might be a gap too. I don't know the business that we're talking about, but they might have a gap to where they don't have that nurture marketing to let their ideal customers know why they should buy from you and what you could do for them. So I think that's important as well, because I think that that continues to close that gap, that nurtures marketing through education and why they should use your services. So if they don't have that, they might be investing more in their marketing fund than a company that does.
Jack Jostes:
Yeah. I think it is nuanced and it is based on a lot of those different things. Well, hey, we could talk for forever about bookkeeping and accounting and all this stuff. It's been a real pleasure having you. Before we wrap up, do you have any questions for me?
Christeen Era:
Yeah. I would be curious to know what your take is on the changes that are coming when it comes to marketing and sales in this industry.
Jack Jostes:
Well, I think some of the changes that are happening with sales and marketing in the green industry are related to what you were just saying about nurturing leads along. And what I think you meant by that is after you have a lead, keeping in touch with them and sending them information, helping them understand why they should choose you, maybe they contact three landscape companies and they're interviewing with each of them and feeling them out and seeing which one should I work with? Is that what you meant by nurture?
Christeen Era:
Well, there's that side of it, but then there's the lead filter before where you can continue to educate them in the same way, but maybe not as deeply after you get them, right? Because then they continue to get value. So I think there's two sides to that coin.
Jack Jostes:
Yeah. I think there are. Whether we're in a progression or a recession or whatever we want to call it, when people are more budget sensitive, one of the things you mentioned is why should I buy from you? That question becomes even more important than ever. There are a lot of foundational elements of marketing that I see becoming more important online reviews. If I'm a little more sensitive about budget, I'm going to do a little more research about who I'm going to hire.
Especially, if I've had a negative experience, which I hear about often with landscaping, is that sometimes their first contractor failed, so that's why they're finding another person. Right?
Christeen Era:
Yeah.
Jack Jostes:
So I see some of those things. And then I'm also seeing what's working for my clients currently is pricing guides on websites like sharing openly ranges for prices. Not a McDonald's menu, but hey, here's a range of information on pricing.
And then when you become the source of that information and other contractors are secretive about it, they are more drawn to your company. Another thing that I'm seeing that I think we'll continue is marketing automation. And that comes in many forms. One thing that's working really well for my clients is email automation. So let's pretend that you get to the point where you may even send a design or a proposal to a client depending on your sales process, and they just fall off.
You just lose touch with them, automatically sending them emails two months later, "Hey, Christeen, would you still like to talk about your landscape project?" And who knows what happens in your life during those two months? But that one email, if you have that dialed in your CRM can reactivate leads for you. So I see that continuing and increasing. Video is another trend that I'm seeing in nearly every industry.
I interviewed a client on this podcast who says he has replaced two full-time employees through video. So he has video content that people used to have a conversation with a human about. A lot of people want to research that before they talk to you, and video is a great way to do that. So those are a handful of the things that I'm seeing.
Christeen Era:
And to your video comments, I would totally agree. I think video is a huge opportunity to not only get into your marketing, but also your customer onboarding and all the way through to the end of a job or a service. Because, one, you can control the consistency of communication. So it's not one of your team members telling them something and then someone telling them something else. So that's one of the beautiful things. Two, you're making that connection. A lot of people like video.
Everybody is so busy these days. They can watch a video from their landscape or their lawn care or even snow while they're waiting to pick up their kid from school in the school pickup line or something, right?
Jack Jostes:
Yeah, totally.
Christeen Era:
They're like, "Now, I know. That's less stress, less anxiety." So that's a huge opportunity. And it removes another person from having to be in there doing it manually. So that's a huge point. Any possible upsets that you might have from customers hearing something that's supposed to be done or the way it's supposed to be done because we always remember what happens first and what happens last. So that video communication and connecting with them on the expectations and the needs or the process is a huge deal.
Jack Jostes:
The cool thing that I tell people about video is that videos, they can't get COVID. They can't give two weeks' notice. They can't ever quit, right? Once you make a video, it just delivers the message for you whenever people watch it, and you will always need people. But videos are pretty great. Well, Christeen, thanks so much for coming on The Landscaper's Guide. For people listening, you have a lot of resources and things, including the Profit First assessment that I definitely recommend, the instant assessment that people can check out. I'll put links to that in the show notes, but how else can we connect with you?
Christeen Era:
So you can find my email and a way to connect with me very easily at greenprofitacademy.com, and any way that you can get ahold of me is there. There's a link to email me, to contact us at any time, and it also identifies what we do, how we can help you, toolboxes, all that fun stuff.
Jack Jostes:
Excellent, Christeen. Well, thanks so much for coming on the show.
Christeen Era:
Thank you for having me. It was a pleasure.
Jack Jostes:
All right, everyone. Thanks so much for listening to this conversation with Christeen Era. I certainly learned a lot, and I hope you did too. I'd love to see you at one of our upcoming events. We've got a lot of cool virtual and live events. So check out landscapersguide.com/events and hope to see you there. Thanks for tuning in to The Landscaper's Guide. I look forward to talking to you next week.