· Year-Round Event Vulnerable Business ·
The Year-Round Event Vulnerable Business
The year-round event vulnerability business model manages despite the uncertainties imposed by Mother Nature. For example, lawn care and landscape companies that operate in hurricane and flood zones have to manage their cash flow around these forces of nature. For instance, they may have to manage extended accounts receivable when dealing with insurance claims. Or they may find themselves supporting their communities by allowing homeowners to pay their bills themselves instead of submitting claims, so that homeowners’ insurance rates stay low. They may have to manage lost production time when the business is forced to shut down for extended periods of time due to extreme storms or if the crew loses access to the facility due to unsafe conditions and is therefore unable to work. Being prepared for the financial impacts of Mother Nature is essential in this business model.
Because you only provide one service, you fall into the one trick pony blueprint.
Labor & Materials
Sometimes, a one-trick pony business fails to fully identify their labor burdens. As a result, their perceived labor costs are inaccurate, which affects anything they are connected to, such as pricing. Because the margins and mark-ups are not at the correct percentages for labor on any work or estimates, pricing on services and service packages is typically wrong, with “wrong” meaning “not priced to achieve maximum profit.” In addition, one-trick-pony businesses often don’t have their margins and mark-ups on their materials at the accurate percentages.
Route set-up can also be an issue for one-trick ponies. To maximize your profit, you must set up your routes efficiently, not only in terms of creating the route but also in terms of managing the skill level of the crew on the ground. Depending on the services provided and the customer base, some routes may require more attention to detail than others. A well-established route can bring in 20% profit or more versus a merely efficient one that brings in 15% profit on average or even creates a loss if not priced properly.