Value Proposition
The Primary Market Review found that Alfred’s Landscaping and Lawn Services and its competitors Greener Fields Lawn Care and All For One Lawn Care Service, offer broadly similar services, differing only in details. These details create companies’ value proposition, forming the market segment they aim at. In the case of Alfred’s LLC, the organization offers the broadest range of services, including water feature placement, brickwork, outdoor furnishings, masonry, and winter services (Alfred’s Landscaping Design, n.d.). Competitive advantage, in this case, is created due to the willingness to take the object literally on a turnkey basis at any time of the year and transform it without resorting to outsourcing to other companies for electricity or water supply.
In this regard, an understanding of market segmentation is being created: wealthier clients with larger objects will turn to this company. Greener Fields Lawn Care, on the other hand, focuses more on soil and debris removal and less on design, while All For One offers the placement of flowers and various unusual objects in the space (All For One Lawn Service, n.d., Greener Fields Lawn Care, n.d.). Due to these proposals, competitors will capture the market segment of tiny private houses that are not equipped with such facilities as a pool, illumination, and stone paths.
Pricing Strategy
The pricing strategy should focus on the selected segment, which is more solvent due to the broad diversification of services. Competitors cover the market for private homes in the middle and low-price segment, as lawn mowing starts from $60 (All For One Lawn Service, n.d.). Alfred’s LLC services will cost more, and, using the example of this event, the price can start from $ 100, given the large area of work in the territory of potential clients. Since the company orders will often contain many other works on the conduction of water, electricity, and stone structures, it is worth focusing on the market in this area. For example, placing an inground swimming pool in Snellville costs an average of $8200; therefore, given such size and positioning, the company will take orders from $8,000 per installation, falling into a higher price segment (Manta, 2022). The strategy for other services should be built similarly. Profits can be captured through large orders of turnkey solutions, primarily since the company provides interior planning services and the placement of almost any outdoor entertainment equipment.
Marketing Promotion Strategy
The best marketing is the placement of the brand with the owners’ consent on completed objects in plain sight. Before and after photos will perfectly illustrate the quality and level of work performed, which is already demonstrated on the company’s website (Alfred’s Landscaping Design, n.d.). Accordingly, the role of marketing, in this case, is to demonstrate the result, and the strategy is to capture the target audience of wealthy customers. In this case, television, mail, corporate cooperation, and sponsorship are the most effective advertising channels. Working on objects of social significance can create a virtual image of a responsible company and advertise to the target audience. Table 1 shows the estimated expenditure by year. Rising costs imply rising revenues; prices are based on the average cost of advertising companies. The slower growth of social media costs is dictated by the fact that this channel is not the main one for the target audience. Sponsorship involves the creation of socially significant objects worth up to 50 thousand dollars at least once a year, with a subsequent doubling of the offer.
Day-to-Day Operations
Given the wide diversification of services, an integrated approach is needed to organize the company’s activities. Firstly, it implies the creation of sectors responsible for a specific range of services: plant care is differentiated from winter cleaning of the territory, and water supply and lighting design on the site go through separate design stages with the relevant specialists. Secondly, with large orders, the actions of each department are coordinated into a single project, which is already approved by the management at meetings. The financial sector forms an estimate based on preliminary calculations of specialists, after which the customer service department already presents the final offer. Then comes the stage of the work itself, when equipment is rented, possibly labor. Outsourcing, in this case, is necessary at the first stages since the maintenance of a large number of employees on the salary is possible only with an impressive flow of orders, and purchasing diverse equipment will require huge investments. Growth planning will be based on the number of customers per month, after which the gradual phase-out of outsourcing will be accompanied by the purchase of equipment and establishing contacts with manufacturers and suppliers of consumables to create their point of further use materials in work.
Facilities and Equipment Plan
The office is expected to be relatively small and can be rented on appropriate premises. Interaction with clients occurs at their facilities; specialists go directly to the place. The office will house management, the financial department, the customer service department, and other assistants, whose duties will include outsourcing for the first time. Accommodation and approximate costs with a subsequent plan until the end of 2023 are shown in Figure 1. After the agreement on the lease of the office and the repair work is completed, the search for employees begins in parallel if the staff is not yet staffed. The proceeds then go towards purchasing winter cleaning equipment just before the season – similarly, before the warm season, expenses will go towards purchasing landscaping equipment and water services. After purchasing the appropriate equipment, expanding the company’s staff with specialists working with these devices is necessary to no longer resort to outsourcing.
Technology Plan
IT implementation implies, at the initial stage, a minimum set of applications for each employee, typical for any sales business. Only during the company’s expansion is it necessary to purchase professional design equipment for each service area. The price of such solutions reaches from three to ten thousand dollars a year in the case of corporate purchases (The Spruce, 2022). These costs are already included in the purchase of the equipment mentioned above. They are considering that Alfred’s provides services even for in-house planning, and the diversification of the software increases, affecting costs accordingly. However, in this case, the potential field of customer service increases, which will be ready-to-order turnkey solutions for more significant amounts than resorting to spot orders. IT requirements will be handled by the professionals in the company themselves, while their support will be outsourced. Planning for an in-house IT department that could provide support at this stage is not yet envisaged. However, if the competencies of professionals in the field of specific services will include IT integration of such solutions, consideration of this step can be included immediately after purchasing all necessary equipment.
Use of Funds
The company provides a wide range of services, which makes it possible to position itself above market prices by focusing on the segment of wealthy clients and corporate orders. Accordingly, the price of starting such a business will be impressive, even though initially it is planned not to buy all the necessary equipment and software and to maintain a small staff with the subsequent involvement of professionals. Summing up marketing in the first year, rent and renovation of office space, recruitment of employees with their salaries and benefits, as well as gradual injections into the purchase of equipment before the season of orders, 420 thousand for the start of the project and about 220 for the purchase of equipment come out. The payment of orders by customers should cover the initial costs of outsourcing. To create a portfolio of works, 50 thousand dollars have already been allocated in this amount for the improvement of any socially significant object. This practice will also allow the search for funding sources among government subsidies and grants that will promote marketing activities and social responsibility. Therefore, to launch the project for the first year, about 640 thousand dollars may be needed.
Sales Forecast
In order to estimate sales for the coming years, it is necessary to refer to the current market statistics. In the state of Georgia, landscape design companies have sales of three billion and are likely to grow to 3.2 by 2024 (IBIS, 2021). Using a normal distribution function, since more detailed statistics are not available, it can be seen that companies above the average market value have an annual income of about 250-300 thousand dollars, with a growth potential of up to 450. Therefore, with such diversification of services, which goes beyond the framework of exclusively landscape design, it is possible to increase profits by approximately 30-40% based on the results of five years; services distribute these percentages according to the complexity of the work. By differentiating the company’s services from those presented on the site, it is possible to make an approximate sales forecast under a reasonably optimistic scenario, which is presented in Table 2. This table does not include masonry and outdoor living spaces departments since, initially, they may not make significant changes to sales. Nevertheless, the financial department will differentiate their statistics and, if necessary, add them to the forecast.
Considering the price of lawn care fluctuates around $100, as mentioned in the section above, it is necessary to sell at least 100 units of service each year, increasing the number of customers by this number each year. Diversification in this area includes weed control, mulch, and turf aerating, which will cost more than lawn care and result in a similar sales profit. The installation of swimming pools can be the starting point for calculating water services, and, given the minimum price indicated above at $ 8,000, it is necessary to install and maintain at least one pool in the first year and then increase by this value. The uniqueness of winter maintenance services promises more customers even among the non-target audience, in connection with which sales have increased from the first year; however, it is taken into account that the market potential is small. The company’s work with lighting is also diversified into possible services, so sales here already have potential from the first year onwards.
The hardscape sector is hugely dependent on the order’s individual characteristics and the client’s wishes, as is the work on stone, which was automatically included in this section. Orders for statues and paths are creative and depend on many external factors that can complicate or facilitate the work. In addition, the company provides services for the repair of already existing similar products with minimal additions. Forecasting in this sector is highly vague, but it has potential in the future and requires several orders to get to the amount indicated in table 2. The calculation is given considering that in the presence of significant turnkey works, income from any work with stone, concrete, walls, and even playgrounds will be integrated here.
Breakeven
With the presented costs and calculations that equipment to stop outsourcing will be purchased in the first three years, the payback point of the project comes out between the third and fourth years, as shown in Figure 2. It will be challenging to conduct the usual breakeven analysis for sold units due to the broad diversification of services and complex distribution of total expenses for these sections. The company may likely come to a plateau after the fifth year, but in this case, it is already necessary to expand the business geographically and go beyond the boundaries of one state. Since vertical business development will be complex due to the broad diversification and positioning in a higher price segment, Alfred’s LLC can focus on horizontal expansion.
References
Alfred’s Landscaping Design. (n.d.) Services. Web.
All For One Lawn Service. (n.d.). Web.
Greener Fields Lawn Care. (n.d.). Web.
IBIS. (2021). Landscaping Services in Georgia – Market Research Report. Web.
Manta. (2022). Inground Pool Installation Costs in Snellville, GA in 2022. Web.
The Spruce. (2022). Best Landscape Design Software of 2022. Web.
