As we move into late fall, companies are setting their renewal and pricing strategies for 2022. Failure to raise prices could severely hamper the ability of companies to maintain service levels and effectively compete in an already tight labor market. While the general belief is that prices will begin stabilizing in 2022, direct costs like fuel and material will likely not retreat to their pre-COVID levels quickly, if at all. Meanwhile, higher wages are here to stay.

Here are six steps to help ensure outstanding service while maintaining profitability in 2022, even in the face of uncertainty.

1. Raise prices. This may seem like a no-brainer, though many companies worry higher prices could lead to client turnover. While a valid concern, not raising prices virtually guarantees reduced service levels, higher customer frustration and lower profitability. Price changes require thought leadership and analysis from your operations and financial staff to answer the who, what and how much questions related to customers and services impacted. Do this analysis before sending renewals out. It is impossible to recoup the increased costs for improperly priced contracts that have already been signed.

2. Talk honestly with your customers. They are usually willing to pay more for services if they understand the benefits to them. Don't apologize or blame the economy; instead, explain service, support, or quality improvements they can expect because of increased investments in training or technology. When possible, meet in person and go prepared; this is an opportunity to show them they matter. Relationships are strengthened through difficult conversations. Finally, be creative if a blanket price hike isn't in the cards. Offer discounts for payment in advance or longer-term contracts.

3. Determine what impact rising costs for direct inputs such as wages, materials and fuel are likely to have. Don’t forget to factor in headcount changes. Planning now for the increased cost of direct inputs is a critical first step in proper pricing decisions for renewals and service pricing for next year. Gross margin analysis may provide high-level impacts.

Don't apologize or blame the economy for raising prices; instead, explain service, support or quality improvements they can expect with an increased price.

4. Verify current contract pricing matches required performance. Crews often spend more hours servicing properties than required. Determine if hour overruns are the result of "scope creep" versus requirements specified in the original agreement, incorrect bidding or performance issues. Then, adjust pricing and performance expectations accordingly.

5. Evaluate your customer portfolio to eliminate unprofitable accounts or adjust pricing. Just like shrubs need annual pruning, customer lists are no exception. Jobs that made sense in the past based on route density or portfolio considerations may need to be re-evaluated to verify pricing, contract scope and overall fit. Evaluate customers based on total value to your organization — maintenance, enhancements, snow, etc., not just one service line. Cutting unprofitable work frees up resources for more fruitful endeavors.

6. Use available data in your accounting and job costing systems to drive analysis of customer and service line profitability. Data is one of the most powerful and effective tools available to help ensure companies make the right decisions regarding hiring, asset purchase and allocation, routing, and a whole host of other factors that influence and drive what customers are charged.

These are critical steps, but they are not simple. Get help and advice, if necessary, about how to best use available resources to make good decisions now. Focus on a plan to improve current systems and people for even better results in the future.

It sounds so glorious to have your own business, be your own boss, pursue personal and financial independence and live the American dream. Often, we sort of slide into being a business owner — an entrepreneur, if you will. Because the barrier-to-entry in the green industry is so low, it seems to just happen.

It seems like a good idea. You have the necessary skills. You have a truck. You’re willing to take the chance. So, you hire a couple of your buddies, hold your nose and jump. One thousand one, one thousand two, one thousand…splash.

Not for the faint of heart.

That’s how most of us got into the business that we’re in. We simply took advantage of an opportunity that was in front of us. That’s how it happened for me. The U.S. Marine Corps gave me an education in finance and aviation logistics. A stint at the General Dynamics Electronics Division in San Diego motivated me to obtain an MBA in finance and start my own general consulting business. A propitious meeting with the late Charles “Chuck” Vander Kooi led to my working with him in the late 1980s for three years consulting specifically in the green industry. 35 years later, I look back on it all with fond memories.

The faces and the opportunity may be different, but I bet you have a similar story. It’s how many of us do it in America — the land of opportunity. And it often works…for about one in five of us. “In 2019, the failure rate of startups was around 19%. Research concludes 21.5% of startups fail in the first year, 30% in the second year, 50% in the fifth year and 70% in the 10th year,” according to Investopedia.

There’s more to running a landscaping company than just maintaining properties. Being prepared for the unexpected can keep you from getting hit hard when it happens.

How it works in the field (real life).

Going into the fall with hundreds of thousands of dollars of work to get done, a client in Wyoming was down to 11 total people in his company. He needed 19. Instead of running his company, he was mowing grass. The stress was almost unbearable.

The office manager of a client in Idaho was poached by her previous employer. She was offered double what my client could afford to pay her. As a signing bonus, the poacher paid off her new truck to the tune of $30-40,000. The morning that my client told me his story, four of his field crew (family members of the office manager) quit.

Because he wasn’t going to get his H-2B workers, a client in the Midwest had to trim his annual budget from $12 million to $6 million. It’s one thing to reduce your sales by 50%, but it’s almost impossible to reduce your general and administrative overhead by that much in such a short period of time.

Another $6 million-plus full-service landscape contractor in New England is focusing on building the chemical side of his business so that he can eliminate the headaches that come from the people-intense maintenance and installation part of his business.

Labor issues for a $3 million full-service landscape company in the Boston area have become so bad that this contractor is building his commercial real estate portfolio so that he can get out of the labor-intense landscape business.

Smart entrepreneurs.

The life of an entrepreneur isn’t for the faint of heart. That’s why so few people become entrepreneurs and why fewer still succeed at it. Chuck Vander Kooi once mentioned to me that to be a successful green industry contractor, you had to love people and love problems (challenges). He was right. You have to be able to build a team and build the systems to direct them and hold them together. Your role is more that of a college football coach than that of an engineer or manufacturer of widgets. You not only have to understand the game, but you also have to understand the people. Add to this the supply chain, truck and equipment shortages today, combined with the unparalleled demand and expectations of customers, and you better have the internal fortitude of Superman or Wonder Woman.

Do you often wonder why some salespeople always seem to outsell the competition? They are not doing it with some magical formula as some would assume. The main reason is that they have become adept at dealing with budget issues in a professional manner.

Salespeople who are uncomfortable (and even timid) when it comes to dealing with budget matters struggle with gaining the respect of their clients. If they don’t gain their client’s respect when dealing with money, they will ultimately struggle closing sales.

It’s not your money!

What is the “real budget?”

The other key thing to keep in mind when determining what a client’s budget entails is their budget may be much higher than what the salesperson thinks it might be. For example, if a client says that they don’t want to spend a lot on the project, the salesperson should avoid attaching an arbitrary figure to that comment. They need to find a way to get to the client’s “real budget.”

The best thing to do is to be upfront in your budget discussions. Take the lead in this discussion. You cannot be afraid to talk money. The sooner you can be sure that you have pre-qualified the prospect and their budget, the less time you waste dealing with a prospect that will most likely say no after you have gone through the entire design and budgeting process.

Being upfront in budget conversations ensures you’re not wasting your time with a client unwilling to spend on the projects you’re selling.

Three Ways to Determine Your Client’s budget.

1. Ask. You may think that this seems too simple. You don’t want to ask, “What can you afford to spend on your project?” You never want to put a client in a position to have to say, “I can’t afford this.” The better way to ask is, “How much are you comfortable investing in your project?”

First, it underscores the fact that this is an investment; second, it gives the client a comfortable way of telling you what they would like to spend on their project.

2. Give ranges. On the initial consultation, the prospect may tell you what the scope of the project they are considering. For example, they may say they want a bluestone patio to entertain up to eight to 10 people, a fire pit, a pergola and outdoor kitchen. As the prospect talks, you should be tabulating in your head the total potential cost of the project using past actual budgets. You would then say, “based on similar project we have designed and constructed, the project you described could cost between $50,000 and $80,000. Is this a comfortable budget range for you?” Typically, they may say, “That looks like a good budget range, but I would prefer to be at the low end or middle of the range.” You now have a good budget number if you’ve given the prospect a realistic range.

More than likely, you have a portfolio of completed projects to show the client, or pictures on your laptop or iPad. As you go through the pictures, show them projects similar in scope to what the prospect is interested in. You can say, “These projects that we are looking at are all in the $50,000 to $80,000 budget range. Is that what you were thinking of investing in your project?” They may respond, “Those are certainly beautiful projects, but I would never spend that on my property.” Or, they might say, “These projects are definitely in line with what we are looking for.”

Finally, always keep in mind that you are the expert. That is why clients are calling you. By assuming the expert role, you become a consultant rather than a salesperson. Approach your presentation with that in mind and the hesitancy to talk budget should disappear. Your ability to close on all types of projects, especially larger ones, will go up exponentially.

The old Jerry Schill used to think he needed to work seven days a week. Today, he knows that taking a break makes him more effective during peak hours.

“My weekends are 98% shut down from work,” says Schill, president and co-owner of Schill Grounds Management outside Cleveland. “We work very hard all week and the weekends help recharge the battery. The only time I will work a weekend is during a blizzard or a deal.

“We have a family lake house and a boat where my children and grandchildren love to hang out and make memories. It is not uncommon to have 10-15 people at the lake house on any given weekend.

“We have all become water bugs and love all the laughter that comes with it.” Here is Schill’s average day.

My typical morning is 5 a.m. wake up, make a pot of coffee — yes, I still brew. While I’m waiting, I look around outside to see what kind of art show is taking place in the morning sky.

As soon as my coffee is ready, I take my book and phone to my favorite spot and read for an hour. When finished, I head downstairs to either run on the treadmill or ride the Peleton for 30-45 minutes. One last cup of coffee as I cool down, start returning emails and off to the shower. Typically leave the house between 7 to 7:30 a.m.

I rarely eat breakfast. If I do it is apples, banana, or oatmeal. I have a specific mason jar just for my oats, so It’s made the exact same way every time I make it — no sugar.

My commute is 20-25 minutes unless I stop off to look at properties which I often do. I typically listen to Fox News or the football network.

I arrive at 8 a.m. and I walk down to grab water. If I’m going to eat, its typically the first thing I do. I always walk the entire office and say good morning to everyone here.

In the morning, I’ll review my schedule — which I do all day — and emails. After I do this, I make my To Do’s in addition to my existing schedule.

Lunch usually starts about 11:45. When COVID hit, we purchased an air fryer and started making and eating lunch as a group in the office. We take turns shopping and splitting costs. We eat healthy every day eating freshly made salads and some form of protein. We all help prep, chop and clean.

After lunch I do schedule review and make changes based on emails or issues.

When I leave depends what is going on. We are in growth mode, so all of these things are subject to change especially if we are working on special projects or acquisitions. My normal departure is about 6 p.m. but I will preface this by saying, from 5 p.m. until I leave most days, I am doing some informal 1-on-1 with people to say connected. My playlist going home is typically Reggae. I have loved the culture and music for years. It always puts me in a happy place after a long day.

The number of meetings depends on the time of year, but I would say 4-6. I have an assistant who helps read my emails, schedule appointments, travel, etc. If I receive an email from someone that is better qualified to answer the request or can do it faster, she will direct them to the right person. I struggle with saying no and, as we grow, I need to do a better job.

My children are grown and out of the house, so I find myself working in the evenings more while I watch sports or if the weather is poor. I use this time to return, read or delete emails, and fine tune my schedule.

I go to bed at midnight. I shut off phones and TVs at 11 — unless its football season — and read or just self-reflect.