DEVELOPING A BUSINESS
No matter what you choose to start with; remember, the modern world is continually changing. Whatever business you start today, it is unlikely to be the same in five years time.
If you want to keep a business viable, you must keep up to date.
You must know about new technology, and new techniques, and adapt whenever it becomes appropriate.
This does NOT mean that you must purchase new equipment every time something better comes onto the market. It does mean that you need to change the way you do things before your competitors get a significant advantage over you.
eg. If everyone else in a lawn mowing business uses modern mowers that mow faster, better, and never break down; while you still use out of date equipment, your business will slowly but surely, suffer.
Before contemplating starting up a business, it may be in your interest to speak to an accountant, preferably one that has had a few landscaper clients. Without divulging private details of their clients, an accountant may be able to direct you in how to set up correctly, save money and run more efficiently. Remembering that the accountant actually does not have the landscape expertise, they can however offer sound money management expertise.
If you have already worked in the industry before, as an employee, but now wish to expand out on your own, the experience you have gained over the years (contacts, sources, reputation, landscape ability) will be essential. It is not recommended to steal clients from your present employer when you move out on your own - this can lead to heated arguments or worse.
Over time, a business may either grow, or decline. Very few businesses stay the same size year after year, without change.
A business that grows slowly (eg. 5 to 20% growth each year) is manageable, and likely to be around for a long time.
When a business grows fast (eg. 200% or more each year), it is much more difficult to manage. The owner can more easily loose control over what is happening, and there is a much greater risk of something going wrong.
MANAGE YOUR GROWTH
If you understand how and where your business has potential to grow, you can then make choices about where you will (and will not) foster growth.
Growth can come through any of the following ways:
1. Increasing the Quantity of Trade
This involves increasing the amount of work, hence the amount of money being turned over each year. Increasing turn over can increase profit, but sometimes it might not increase profit, for example:
A gardening business that has one employee, one car, and one mower might have ample work to keep that person employed full time. If they increase the amount of trade by 10%, they might need to purchase another car, another mower and engage another employee. The extra 10% in earnings probably is not enough to cover the extra equipment costs.
2. Increasing the Profitability
By paying closer attention to where you spend money, it is often possible to decrease what you spend, and increase the profit from a business, without increasing the amount of annual turn over.
3. Vertical Expansion
In the delivery of any service, there is a vertical chain of businesses each contributing to the final service which the customer receives; for example:
One company builds a machine for earthmoving, a sub contractor buys or hires a machine to do a job, and a landscaper hires the sub contractor to do some earth moving. If the landscaper was to expand vertically, they could buy their own machine and eliminate the need to employ the sub contractor.
4. Horizontal Expansion
Horizontal expansion may involve expanding the range of services offered, without the vertical expansion explained above. A landscaper, for example, who had been contracting to construct small gardens only, might start contracting to landscape large gardens as well. This is horizontal expansion.
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