What do you think of when you hear the term “sustainable growth?” Financial stability? Client retention? Pricing strategies? Lead-generation efforts that consistently yield new clients? Balancing new business with a long-term business plan? Environmental responsibility?
If you’re uncertain, you’re not alone. In the business world, though, sustainability typically means one of two things:
- The ability to maintain growth without taking on additional debt
- Environmental responsibility
The first, more traditional definition relies on a set formula and serves as an official measure of a company’s overall health. The second has come into play more recently as businesses begin to take greater responsibility for their impact on the rest of the world.
Author and business advisor Rick Miller describes sustainable growth for businesses today as “growth that is repeatable, ethical, and responsible to—and for—current and future communities.”
In other words, it encompasses both the traditional financial measure of sustainability and the more recent considerations around how companies should contribute to a healthier world.
What does this mean for you as a landscape business owner? Achieving sustainable growth should be a top priority. To help, we dug into the research to uncover the most effective strategies for growing your business sustainably (using Rick Miller’s comprehensive definition).
Here’s what we found.
Create growth plans
Without a vision for where you’re headed, it’s hard to plan effectively.
A vision statement is a great way to set the course for your lawn care or landscape business. It brings employees together with a clear purpose, ensures excellent service for your customer base, serves as the deciding factor in critical decisions, and informs your overall business plan. If you don’t already have a vision statement, consider creating one soon with input from stakeholders.
Having a shared vision is important, but it’s just the beginning. Once you have a target in place, you need to know how you’re going to get there. That’s where growth plans come in.
You can think of a vision statement as the ultimate destination on your business growth map. To reach it, you have to pass through several other regions—each with their own “station.”
Growth plans explain what it will take to reach each of those stations. With a clear vision of where you’re going, you can prepare multiple growth plans for where you want to be in one year, three years, five years, etc.
Growth plans are built using SMART goals, targets that are specific, measurable, achievable, relevant, and time bound. (For more info on how to create SMART goals, see this article from Atlassian.) Once you have those goals in place, be sure to communicate them—and share progress toward them—with all employees.
Increase profit margins
A company’s sustainable growth rate (SGR) is the maximum rate at which it’s able to grow without increasing leverage or debt. The official number is calculated using return on equity and the dividend payout ratio.
One of the ways to boost this number is to increase profit margins… easier said than done, right?
The landscaping industry’s historically low margins can frustrate growing companies that want to take on new customers but find themselves hitting a growth ceiling. Landscape business owners can find themselves having to turn down potential clients or limit service areas because they lack the necessary cash flow. Looking for ways to increase profit margins—while maintaining reasonable pricing—can help raise that ceiling so your landscaping business can achieve the kind of growth you’re looking for.
For advice on how to get there, check out Greg Herring’s article on the path to 12% profit margins here.
Focus on company culture
In addition to a vision of where you want to be as a company, you should have a list of core values or a mission statement.
While a vision describes what you want to accomplish as a business, values describe who you want to be. Knowing what your core values are is a great first step. Once you have them down, don’t hide them! In order for values to have a real impact, you have to keep them front of mind for yourself and your staff.
Post your values around the office, use them in presentations, or ask employees to share stories about co-workers who demonstrate company values. Whatever methods you choose, find a way to incorporate values-based language in your day-to-day conversations.
Sticking to your values helps you maintain a healthy company culture, with everyone rallied around the same purpose and approach to getting work done. And when your culture is healthy, it helps motivate employees to do their best work—keeping people engaged so they stay with your company even longer.
For more information on building a healthy company culture, download our free, comprehensive guide to improving recruitment and retention for your landscape company.
Put hiring first
It’s hard to overstate the importance of labor when it comes to managing for sustainable growth. Not only are your employees your most valuable resource—they’re also your biggest expense as a landscape business. By hiring carefully and investing in the areas of your business that have the highest ROI, you can develop a labor strategy that supports your sustainability goals.
To find the right people, look for alignment on core values during the interview process, and think about how the candidates you talk to will be able to help you reach the short- and long-term growth milestones you’ve set.
Hiring is a constant struggle in the green industry, but you can make sure you’re prepared to attract the highest performers by looking at your benefits package, managing your online presence, staying active on social media, ensuring adequate work/life balance, providing incentives for high performance, and offering competitive perks.
Once you’ve found employees who are a good fit for your company, empower them to do their best work by giving them the tools and resources they need to be effective.
Use scalable systems
Landscape contractors often start out with just what they need to get by. Planning happens on paper or whiteboards, and spreadsheets are used to keep track of important business information. Eventually, the need for software to accomplish certain tasks can’t be ignored.
Over time, as the business grows, a patchwork of processes grows up around it—and the support this patchwork system provides is shaky at best. Business owners blink and find themselves faced with a frankensystem of solutions and platforms that have been adopted over the years to help, but now make operations difficult and inefficient.
The solution is to use scalable systems, like end-to-end business management platforms, that provide full visibility into the business and enable informed, proactive decision making.
Software is key in helping achieve sustainable growth because of the impact it can have on efficiency, but it’s important to choose the right solution for your company.
If you’re interested in learning more or need help finding the right software platform, download our free buyer’s guide to business management software.
Practice environmental consciousness
When it comes to environmental sustainability, the landscape world is ahead of the game. Initiatives from professional associations like the APLD (Association of Professional Landscape Designers) and ASLA (American Society of Landscape Architects) officially prioritize practices that promote healthy environments. They provide position statements, research findings, project certifications, and educational materials for landscape professionals, and many landscape companies also adhere to the EPA’s Low Impact Development guidelines and principles.
There are lots of options for companies interested in demonstrating environmental awareness through their landscaping services, including offering green irrigation options, using hybrid vehicles, moving processes online to minimize paper waste, and producing annual sustainability reports.
The great news is that these efforts aren’t just good for the planet—with more and more customers becoming environmentally conscious, practicing this form of sustainability can make you even more attractive as a business.
Every landscape business owner understands the challenges that accompany growth. Managing growing pains is a difficult (but important) aspect of achieving greater levels of success for your business.
And if you’re willing to give them a try, these six strategies can help you take your business to the next level by growing carefully, responsibly, and effectively.
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