Generating Recurrent Revenue

(How to generate $100,000 per year as a garden designer)

The Challenge

Let’s start with the pink elephant in the room. It is very expensive to live in California, to own a home, raise a family and stay ahead of bills. The median home prices throughout California are sky high. Median Sales Prices for certain counties of California in 2017: Sacramento County $355,000; Sonoma County $643,000; Marin County $1,108,000; San Francisco $1,289,00; San Mateo $1,200,000; Santa Clara $1,283,000; Contra Costa County $612,000; Alameda County $875,000  Santa Cruz County $868,000; Santa Barbara County $1,128,0000; Los Angles County $615,000; Orange County $746,000;  San Diego County $604,000. Suffice it to say, that if you have any hope of achieving home ownership, your business needs to yield a salary in the six figures. Most likely it will take two salaries of substantial weight to achieve this. At least one of them must be in the six figures or close. So for a moment let’s suppose that you, the garden designer, are the main bread winner and your goal is to make $100,000 a year in revenue.

Most of us who enter the field of garden design do not choose it because of the spectacular financial rewards it offers. In fact, the garden design profession is populated by scores of people who vacated the very jobs that yield higher salary rewards (like those found in the financial sector, medical industry, insurance field and legal profession). These career changers were anxious to reconnect with the natural world. So, the question is, “How to make our businesses more profitable?” One answer is by generating recurrent revenue.

Recurrent Revenue Seed Idea

Recurrent Revenue is the idea that once you secure income from a particular client, you hold onto them and create a pattern of generating revenue again and again in some cyclic pattern. It is far easier to sell something additional to an existing customer than it is to secure a brand-new customer. You have already laid the groundwork and gained their trust. You know the intricacies of their property and their preferences. Once you have established this level of trust with your client, (and our profession is rather good at this) then the necessary threshold needed to convince a client to do further work with you is dramatically reduced.

Many real estate agents sell home after home with the same family because a level of trust has been established. Most dentists, doctors, auto mechanics, etc., operate on the same principle. The teeth need checking/cleaning, the oil changing, and body exercising – so we go back to the same business resources again and again.

Many full service landscape companies provide maintenance services as part of their business model but very few garden designers are able to generate much additional revenue from their clients until the client moves and has a new home to work on. (I realize that working on the back yard after the front gets done is one exception to the rule.) The question is how can we continue to generate revenue again and again from the same clients?

Before we answer that question lets do a bit of math.

What We Need To Earn: The Problem

Let’s assume that out of 52 weeks of the year that you will work 46 (think like a Swede).  That means you will need to average $2,200  a week to reach the $100,000 threshold.  And it means that if you work a 40 hour week and were able to bill for every hour you would need to charge $55 an hour to make your $100,000 (before taxes).  If you only had 30 billable hours per week you would need to charge $73 per hour. The challenge most designers have is trouble filling up 30 billable hours without killing themselves in the process. If we look at the “project billing model” rather than the “by the hour” model you would need to average two designs a week, and I realize many do, at $1100 each to be able to reach your goal.  The problem is  you need to  attract enough clients (92 to be exact) to your service year in and year out to make this happen. This is a frenetic pace that few can maintain and frankly sucks the fun and enjoyment out of our profession. It usually leads to the need to hire assistance which also strips away revenue.

The Wrong Model

In my previous career as a landscape contractor, the paradigm for landscape design and landscape construction mirrored the home construction world and architecture.  A blueprint was drawn, demolition undertaken, materials gathered, soil prepared, grading done, hardscape installed, irrigation installed, plants installed, clean up and leave….. FOREVER in most cases.  This is a little bit like a small family moving into your home conceiving and giving birth to a child in 4 weeks and leaving it in your care after vacating the premises. This is not how the natural world works. The name of the game in contracting is speed. The faster you turn over jobs the more money you make.  Many garden designers work on the same basis.  I have heard many designers tell me that if after delivering the blue prints to the client they never heard from them again that would be just fine by them.  All the typical follow up takes time away from more profitable design work on the next job. Follow up is either free or billed at such low rates that it cannot compete with your regular design fees. This arrangement is unfortunate.

Great garden design, and I might go so far as to say, proper garden design, consists in a progressive and incremental series of creative and constructive steps taken over time. How can we achieve in one or two steps what nature does in a hundred little steps? Essentially, we turn over all the important steps after the initial conception and inspiration to the contractor and the maintenance company. To go back to the baby metaphor this is like dropping the child off at college on your way home from the hospital. The slow gradual process of nurturing the child to maturity only begins at this stage. Why would a garden be any different?

I have yet to meet a single garden designer who does not despair over the condition of “professional” maintenance in its current state.  People are trained to operate power equipment and in assembly line fashion perform the same set of thoughtless tasks day after day.  I know this to be true even for my own company in the 80’s.  Our maintenance division was all built on speed.  Turning around the work faster meant more money, so it was pedal to the metal. For all intent and purposes horticulture has vacated the scene in landscape maintenance. There is no room for horticulture in today’s maintenance model.

And herein lies the opportunity!

A New Business Model Based on Recurrent Services

Consider this:  My daughter just had a baby girl 8 months ago. (Probably why the analogy with garden creation is so strong with me now!)  She selected a Pediatrician for her baby and committed to seeing the doctor on a specific schedule for the first two years of her daughter’s life to ensure her baby’s health. The Pediatrician came to the hospital on the day of birth and the day after. My  daughter and granddaughter visited the Pediatrician again 3 days later and then 5 days later.  Then the doctor visits started to stretch out.  Two weeks after birth, then 6 weeks, then at 2 months, then at 6 months, and at the 9 month mark.  The visits stretched out in the second year considerably but consistently nonetheless. You get the idea. Monitoring and nurturing are needed to insure the child’s health and well-being.

With this idea in mind a different approach would be for the designer to play a more fundamental role in the construction process and in (what has come to be falsely labeled as) maintenance.  Many designers provide plant placement and monitoring of construction (do we charge for this? Do we charge enough for this?) But what about the maintenance after the “baby is delivered”. Maintenance does not describe what is needed. We are not interested in maintaining anything, we are interested in growing and sculpting the garden as it matures. What plants are not moving forward in their locations need moving or replacing. What settings need to be put on the controller based on weather patterns? What structural pruning is needed for maximum health and direction? What new ideas have come to mind now that the existing landscape is removed and this new one has taken its place? In other words it is not a building that we need to maintain but rather a canvass of art to craft.

The services we render should be recurrent and cyclical. Therefore a new paradigm might look like this: A designer would charge a development fee up front for the initial design services. (Site inspection, client interview, blue prints). A fee would be assigned to following and guiding the installation stage. This might require multiple visits per week, plant placement etc.. After installation is completed then ongoing consultation services would follow for a 2-3 year period. These consultation services might be actual pruning, controller setting, plant replacement or addition etc. or it could be in the form of information. Written instructions on what needs to happen to keep the “child” healthy and growing, to continue the Pediatrician metaphor.

I can already hear the objections to this idea… “I can’t get my client to pay for this, no way!” Well, they are paying for it already in the form of a (non-horticultural) maintenance service that might cost them between 100-300 dollars a month depending on the size and nature of the property. These maintenance services are nothing more than housekeeping duties with no connection to horticulture care at all. Why shouldn’t some of these monthly funds go to the creator and sculptor of the garden who is guiding it to maturity?

A good design, from one point of view, is one that needs less maintenance not more. Just for argument’s sake, let’s say you’ve designed a nice size property in Santa Barbara or Santa Cruz. Let’s say the average maintenance cost is $300 a month. That is $3600 of service per year they are currently paying. What if, through your high level gardening services, the maintenance company would need to come only twice a month rather than every week? That would free up revenue to pay the landscape design professional for additional services.

I hear your voice again. “But I don’t have the equipment, or the energy to provide these services. This won’t work for me!” Well, then hire a company that you train. You pick a company with pliable employees whom you can personally teach the high-level gardening skills necessary to do the job right. In exchange for this guidance, and in exchange for finding them a client, and in exchange for monitoring the work, your company gets a cut of the monthly maintenance costs. This is already being done by garden designers I have spoken with. In this scheme you carry the contract with the client, you handle the money and split the revenue with the third-party company.

Another scheme is to work hand in glove with local horticulture schools. Students accompany you to the job sites and learn important hands on skills and help provide you with some much-needed physical assistance. They earn some money while learning, you get the help you need to get the work done quickly. Yet again there are companies doing this right now that I have spoken to, one using Foothill College students in the Bay Area.

Back to the Math

If you could acquire 25 clients that are charged an average of $1500 per year for the additional services you provide, (informational or physical) you would generate an additional $37,500 per year in recurrent revenue. Now the remaining $63,000 you need to make $100,000 would require one design per week rather than two (at an average of $1,358 per job). Or if you could acquire 30 recurrent revenue clients, that are in the 2 or 3 year repetitive cycle, at $1500 a year average the number jumps to $45,000, almost half of your goal. The 46 weeks of regular design work, would now be an average of one new project per week at $1200 per project.

A second idea is based on time rather than by the project might be to weave into each week a certain amount of garden inspection and charge for the time. Give people documents and/or a website for ongoing instructions if you don’t maintain the property yourself.  You could charge $150 per visit, like any dentist, doctor, lawyer or consultant might. You could efficiently make a list of recommendations which you can post to their website link or send them via email. Remember we  can earn money from dispensing knowledge here as other professions do. We are a knowledge-based service essentially. This is part of the paradigm shift.

If you could do 6 garden inspections a week at $150 that is $900 a week of steady income. If you did that for 47 weeks of the year you would have a base salary of $42,300.  For example, you could do 3 in the afternoon on Tuesday and Thursday.
That would get you 40% of the way to your $100,000 a year. If you could do two designs per week at $750 a week, or one at $1500 combined with your six inspections of old clients you would yield $115,200 a year! Suddenly this is starting to sound more doable.  I realize many of you charge far more for design services but I am laying out this picture with the assumption that you are offering services to the middle and upper middle classes and not exclusively to the very well heeled.

Step by Step Landscape Design: Incremental Design

So you say “that won’t work because people will not pay for inspections or fine gardening”.  OK, then stop calling it “maintenance”. Build it into your design and consultation business model and sell it at the beginning of the process.  People do not take into account all the money wasted with poor design and poor follow-up. Money is wasted on fertilizers, poor water management, repairs etc.  All these costs add up and can be mitigated by a wise gardener/designer.  So rather than putting their money into gasoline, dump runs, high water bills, plant replacement, irrigation repair and the rest they spend less by hiring you – a trained designer as a consultant! In other words you must SELL YOURSELF AS A MONEY SAVER in the long run. That is the argument to bucking the old paradigm. Your way saves them money while maintaining the beautiful design they paid for in the first place.

The average range of projects in a given year is between 25-100 for garden designers.  That number is skewed low because many designers only work part time. But the busiest designers I talk to tell  me they average four projects per month. So, if you have 48 clients per year and could convince a third of them into your 2- 3 year concept,  a recurrent revenue stream concept is within reach and be rolling towards a six figure salary.

There is a great deal more to flush out with this concept no doubt.  But many designers are experimenting with unique business models like this right now. The accumulated wisdom of a career in horticulture is worthy of significant pay in the market place in which we live, just as it is in the law, medical, or financial planning professions. Yet traditionally, landscape designers give away so much of their expertise for free. With a recurrent revenue stream you can dispense this wisdom to your customers and be rewarded for it. Its beneficial for them in the long run, and can generate additional income for your company long after you secure the initial project.

What do you think? I would love to hear your thoughts about this new way of doing business. Please comment below or shoot me an email. 

Gerry Kiffe | President
PlantMaster

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Interested in learning more? Email Gerry. or call 805.499.9689