December 15, 2014
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By Dave Braun
LO President

Dave Braun Most companies in our industry have battled for survival since the Great Recession. If you’re reading this, it means you’ve made it.

Congratulations.  

You’ve probably succeeded by downsizing, conserving, innovating and battening down the hatches. We’ve survived. We’ve come out of the darkness.

Now that our heads are above water, many of us are realizing that it’s time to move toward our past levels of profitability. Some have managed to match their sales numbers to “the good old days,” but even with those increased sales numbers, many of us have not managed to match our past profits.

Walmart recently reported quarterly results of $3.71 billion profit on $119 billion in sales. Clearly, any of us would love to have profits, but until we can match their enormous volume, we can’t thrive on three per cent margins. Conversely, in 2014, Apple had a profit of $52.5 billion on sales of $183 billion, making its operating income profit margin over 28 per cent. Which company would you rather be?

It’s not what we sell, it’s what we take home. For over half a decade, most of us have absorbed the increasing costs of fuel, labour and materials, instead of passing those costs on to the consumer. All of us create value for our customers that they can’t find elsewhere: beauty, increased property value and a sense of comfort and peace at home.

Often businesses fail to increase prices because they believe the competition won’t. This year is different. In a question on our weekly enews, we asked members, “Are you planning to increase prices for the next season?”  Over 95 per cent of those answering the question said they will increase prices. That reflects virtually every conversation I have had with fellow members this fall.

If you miss this opportunity to widen your margins, you may always be a year behind. Your neighbours might be doing the identical work, but be  twice as profitable as you at year end, for the sole reason that they increased their prices and you didn’t.

We all work too hard not to be robustly profitable. In years past, I’ve heard things like, “We’ll make it up in volume.” Have we really?  Again, I think we need to ask ourselves who we would rather be, Apple or Walmart?  

“Making it up” in volume generally means being harder on your equipment, harder on your staff and harder on yourself and your family. Why work like that for essentially the same result? When you’re setting up your pricing sheets for 2015, don’t worry that you’ll be the only business increasing your prices. You’re in good company.

Wishing you the very best for 2015!
Dave Braun may be reached at dbraun@landscapeontario.com.