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The Winter Season Service-Shift

The winter season service-shift business model typically provides a combination of the following services: lawn care and landscape maintenance, landscape installation, landscape design, lawn care application, irrigation services, aeration services, tree and shrub service and care, pest control, and snow removal. When the winter season hits, these companies shift from providing lawn care and landscape services to providing snow-plowing services. 

Because you provide multiple services, you're business blueprint is the three-ring circus, or the full-service landscape business.

Your Challenges

Equipment

Newer businesses that use this blueprint tend to overbuy equipment, such as skid steers, mini-excavators, lawn mowers, snowplows, lawn applicators, mini skid steers, oversized dump trucks, and ride-on leaf blowers. Depending on your scalable business model, your overall equipment costs could range between 5% and 15% of your sales. These costs include not only direct costs but also leases, insurance, fuel, and maintenance. 

Pricing

In this business blueprint, the pricing of services and materials is typically incorrect. The correct and full labor burden is not identified, and the labor margins and mark-ups are not at the proper percentages to produce a high enough profit. As a result, businesses often cannot cover the costs of their day-to-day operations, including their labor costs. The inability to connect with true labor costs creates challenges in recruiting and retaining good workers. In addition, not everything that should be included in job estimates is being included, which throws off the calculations. 

Labor

Crew size can be a big issue in the three-ring-circus blueprint. You can start bleeding profit fast if there are too many people on a crew and the labor is not being tracked. Field labor should run between 20% and 35% of your sales. When field labor hits 30% or more of your sales, there is likely an issue with project management. 

Overhead

Compared to the one-trick pony, the three-ring circus requires two to three times as much overhead to run and manage. You need equipment for each type of service, and each of these services is seasonal. Space is required to store the equipment, in addition to insurance to cover it. For each season, you need to ensure you have a properly trained crew on hand to provide the services you offer. It’s no wonder that the owners of this business blueprint sometimes feel like circus ringmasters. 

Seasonal Services

You may face challenges with your cash flow due to your need for more capital resources. You may have an excellent opportunity to produce revenue in a particular year due to the amount of snow, but the following year, a lack of snow may demand capital to support the expensive snowplow equipment even though it isn’t producing revenue.

Consider the costs of offering snowplowing services. It can cost $80,000 to set up a snow truck for snowplowing. A truck or loader alone costs $50,000 to $80,000, and it takes two to three weeks to set up these trucks for snow. Sometimes there is little or no snow during the winter season, 

which means little or no revenue to support all the setup costs and generate a profit. In addition, many business owners don’t budget for the wear and tear on trucks and tires, even though a snowplow business needs to plan for a new set of rims and tires each season on six-wheel trucks. Up to 25% of snowplowing revenue is needed for equipment repairs and replacement, and the life expectancy on trucks used as snowplows is cut by 30%. Taken together, all these factors can lead to a cash bleed that destroys profit.