14 Tips for Landscaping Businesses During a Recession

Practical tips for adjusting your landscaping business operations to allow for better financial flexibility and cash flow during a recession.

Carla Policastro
January 5, 2023

Is your landscaping business prepared for a recession? Take the below points into account when planning for 2023:

  1. Recoup fluctuating pass-through expenses by constantly reviewing your financial data, and implementing an accurate pricing structure. Don’t let increased costs be the reason for a decrease in your profit percentage!
  2. Increase communication with vendors, employees, customers, etc. This will allow you stay ahead of potential issues, and will bring you closer to information needed to make accurate decisions.
  3. Keep the base, don’t cut necessary expenses. This starts with having a deep understanding of your operations. Letting go of a key employee and decreasing marketing spend are two examples of short-term decisions to decrease expenses, but may cause worse long term ramifications.
  4. Utilize technology to improve field and administrative efficiencies. Being busy may not mean that you should hire additional employees; it could just mean that your processes need be streamlined through technology.
  5. Leverage existing relationships and opportunities with customers and your current lists.
  6. Track asset utilization, and sell assets that are not contributing to your operation. Used vehicle and equipment prices have increased; use this to your advantage.
  7. Compare your business financial data to industry averages and past periods. Doing this on a frequent basis will help to catch problems early, and show opportunity to improve for the next period.
  8. Managing expenses is great, but apply that same attention to improving factors that influence cash flow, like accounts receivable and accounts payable processes. Most businesses fail due to cash flow problems, so focus on all factors that effect this.
  9. Make project pricing valid for a limited timeframe and include price increase provisions in contracts. Flexibility is key in times like this.
  10. Analyze any loss leaders you may have; you may need to focus on profitability through all divisions. With companies that have both maintenance and build based divisions, a possible decrease in build and construction based jobs could mean it's even more important to ensure profitability in your maintenance division.
  11. Improve your business value proposition instead of focusing on transactional relationships. You may do great work, but how do you demonstrate this to your customer throughout the sales process and job timeframe?
  12. Use this time to change payment structure into a recurring subscription, or bundle services to improve cash flow. We have seen businesses improve significantly through this strategy.
  13. Continue to invest in branding and marketing to ensure adequate lead flow. More leads will allow you to be more selective, and will allow you to work with higher profit jobs.
  14. Focus on your business strengths and your competitive advantage. This is where your success and profits stem from, and this is where you will find opportunity in a downturn.

Watch our on-demand webinar where Joe and Carla Policastro, CPA of Cycle CPA cover further details on how to prepare your landscape business for a recession.

Recession Readiness for the Green Industry: Proactively Preparing Your Business

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