Thursday, May 17, 2012

Home Magazine Know your niche

Know your niche

Features - Snow Management Operations

You can’t be everything to everybody. Focusing in on specific property types can afford you the opportunity to better serve your clients.

Font size
Kyle Volz December 22, 2011

All races begin with the competitors picking a lane. Have you picked the lane that you want to run your company in? Alternatively, are you trying to be everything to everybody?

For you seasoned snow fighters, I ask you to look back to when you decided to begin offering a snow and ice management service and ask yourself why you did it. Maybe you simply grew tired of the little or no income during the winter months. So you decided to go ahead and put a plow on your truck and offer the service to your existing clients. This diversification of service can pay great dividends if you select the right niche of customers.

The first mistake we made was trying to be everything to everybody. This caused us not only to fall short of our clients' expectations, but our own as well. This is just one of the many reasons we realized in snow and ice management that we cannot go around picking up each and every customer, residential and commercial that calls for a proposal.

Being more niche-specific allows you the opportunity to have a better handle on the type of services and clientele that you want to service. This decision will affect what type of equipment you purchase, the materials you stock such as bulk or bagged salt, sand, calcium or magnesium chloride and brine. When it comes down to it, most all snow and ice management companies have trucks, plows, pushers, spreaders and ice melt. So what makes you different and better than your competitor? First, we must look inside our individual business structures to see what resources, tools and advantages we each have.

For the larger contractor this may be a lower price point, more purchasing power, account flexibility, diversified equipment advantages and efficiencies. For small and medium size companies this may be the ability to service fewer accounts, make a higher profit margin and not have the headaches of managing a large number of accounts. Which approach is right or best for your company? Should you go big or stay within your current niche? I think it simply boils down to picking the right lane for your company based on your equipment, labor and business plan. I don't think big or small relates to wrong or right.

By choosing the right "lane" and aggressively going after that niche your opportunities for success and profitability are greatly increased.

I often hear small to medium size operations complaining that the "big" guys make it too hard to make any money. There is no way they can do it for that price. I think the best option for any company is to stop worrying about everyone else and focus more closely on their own company. As a one- or two-truck operation you cannot effectively compete against a larger service on a shopping mall or large facility. However, there are many profitable options. A few include doctor's offices, 24-hour facilities, nursing homes and private business offices. Many times these smaller facilities are not the target of larger contractors. As snow fighters, we must realize that our pickups, plows and tailgate spreaders have their niche. Many of the larger facilities require skid steers/track loaders, front loaders, pushers and maybe even snow melters. Being small doesn't mean you can't be profitable. You can be very profitable if you attract the right client.

The larger contractors are always going to be able to service properties such as malls, large neighborhoods, stadiums, industrial facilities and the like not only at a cheaper price but honestly, more efficiently. It is this equipment efficiency that allows them to provide those facilities a lower price. It is not that they do a better job, it's simply they have the equipment to get the job completed faster thus reducing the cost.

Being a smaller service has its advantages as well. Snow and ice management offers us a very unique opportunity when compared to the other services that we offer that often goes over looked. Here's the opportunity. We do not need five or six days of work like we do with the lawn and landscaping side of our businesses. We only need hours of work. Because of this unique opportunity, we can be more selective as to the type of clients that we want to fit into our business model.

A few of the advantages of providing service for smaller facilities include selling a faster response time, making higher profit margins, fewer overall accounts and headaches of managing labor, personnel and equipment. In many cases you are working directly with the owner or the decision-making board. This gives you the opportunity to build a relationship and create loyalty with the right people. This relationship goes a long way in helping retain your accounts without every decision coming down to the cost of the service.

Each market offers its own individual challenges. Don't be the contractor going after "busy work." I refer to busy work as accounts that offer very little if any profitability, but carry what some contractors think is a big name. Too many times we sacrifice profitability for the opportunity to plow for a "big" name just to say we do it. Don't let yourself get caught in that mindset.

We face many different choices while trying to pick the right lane for our company. While some may seem more important than others, they all contribute to the success and profitability of our company. Picking the right lane not only determines success and profitability, but may also control your sanity. There are two ways to run the race: Just be happy to be in the race without lane definition and accept mediocrity or pick your lane and aggressively go after your competitor so you can position your company to win.

Add a comment:

Post Comment
* Snow Magazine Online reserves the right to edit or remove reader comments for any reason it deems appropriate.