The 3-Step Process to Maximize Your Profit Centers
A Summary of Mike Rorie’s Presentation at the Cleveland SIMA Symposium 2021
GIS Dynamics CEO and industry expert Mike Rorie joined the Go iLawn Team at the Cleveland SIMA Symposium in mid-August to meet Go iLawn users, network with snow removal contractors, and share his expertise in a presentation titled “How to Evaluate Your Profit Centers for Maximum Growth.”
Rorie explains the importance of clear and strategic profit centers and how a correct approach allows landscape companies to increase their profits. Read on to learn the 3-step process of maximizing your profit centers.
Step 1: Understand How Profit Centers Impact Your Business Operations and Revenue
What is a Profit Center?
A profit center is an area of your business that contributes directly to your bottom line.
Some examples of profit centers:
- Landscape maintenance
- Snow removal services
- Landscape enhancements
- Design build
- and more…
Your income is likely driven by one main profit center, which is typically 50% of your revenue or more.
This is your core profit center: you are known to provide this service in your area and your customers and prospects request this service most often.
Your supporting profit centers contribute to your revenue, but at a lower percentage.
How do Supporting Profit Centers Contribute to Revenue?
Your supporting profit centers contribute to your revenue only if they are strategically chosen, “smart” profit centers. Selecting the right profit centers for your business can be the difference of millions of dollars in revenue.
Strong vs Weak Profit Centers
Strong profit centers complement your core, while weak profit centers distract you from your core. A strong profit center is scalable, repeatable, defined, compoundable, and cost-effective. They allow you to implement systems because you are focused and in your lane.
Step 2: Select the Best Profit Centers for Your Company
Profit centers are not created equal; what works best and acts as the core profit center for one company may not be a reasonable profit center for another.
It is crucial to understand which profit centers work best for your company. There is a strategy involved in selecting the best profit centers for your business. Ask yourself the following questions:
- What are your current profit centers?
- What is the cost of operating each profit center?
- How does each profit center contribute to your bottom line?
- Do you like offering each profit center as a service?
- If you dedicate more resources to a profit center, can you grow it?
- If you remove a profit center, is your business viable?
After understanding how your existing profit centers impact your business, you can think about adding new ones as well. Consider the following when evaluating a new profit center:
- What is the market demand?
- What does your primary customer need each year? Are their primary needs your primary offerings?
- Are your company’s offerings well-known and easy to order or request?
- Can you offer this service in my defined geographic region?
- Do you have the equipment, or most of the equipment, to offer this service?
- Does this profit center complement your other services?
- Does it fill in seasonal gaps?
- Does it peak at a different time of year than your other services?
If you find that the profit center you’re considering adding fits with your business model and your customer’s needs, and wouldn’t be too expensive or difficult to implement, add it!
However, if you find that the profit center is not needed by your customers or you don’t have the equipment, for example, it’s probably not the right time to add it. Instead, focus on scaling your existing profit centers.
Step 3: Selling Your Profit Centers
Once you’ve decided on the best profit centers for your business, it’s time to sell and focus on maximum growth.
With Go iLawn, it’s easy to sell new profit centers with visual communication and Property Intelligence.
- First, show your client their property with the existing services they pay for, using the Go iLawn sitemap.
- Explain the value of the new service you’d like to add.
- Show the sitemap of the new service.
- Reinforce your hassle-free service: you’re already there doing work – it’s easier to have you perform the other needed services instead of the property manager having to manage a contract with another company.
Get Your Go iLawn Free Trial!
Go iLawn makes it easy to sell your profit centers for maximum growth. Go iLawn grows with you and helps you systematize your business no matter how big or small your company.
Who is Mike Rorie?
At the time of this event, Mike Rorie was the CEO of GIS Dynamics, the company that created Go iLawn. GIS Dynamics was acquired by Aspire Software in November 2021. Mike is a successful landscape contractor with four decades of industry experience. Starting out at 19 years old with a single mower, Mike grew his company, GroundMasters, to five branches before selling to a national provider.
Mike remains an active member of the landscape and snow industries and continues to contribute to the industries by consulting with other contractors.