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3.8 Running a small business

Introduction

In this module, we will help you to develop the business skills that are required to run a landscape design consultancy. This major project requires you to develop a detailed, five year business plan for your fledgling business. Rather than jump immediately into it, we will undertake several small projects which will form part of the business plan. These particular projects [1.0, 2.0, 3.0, 4.0 and 5.0) will cover parts of the business plan, while we have included others [1.1, 2.2, 3.1 etc.] which are designed to develop your interest in somewhat more practical issues - communication skills, using spreadsheets to develop budgets for quoting on jobs, project management, negotiation skills and setting up an appropriate structure for running a business.

Getting Started

Visit the link below and study a business plan (for an interior design services - a service quite similar to that offered by a landscape designer) to gain some idea of the requirements and structure of a business plan. Note that we are not asking you to buy the software advertised on that site. Please click here to vsit the site. It will open in a new window. Close the window when you have finished examining the model plan to return here.

Business Plan

An aside: After you have read this sample plan, please contribute to our forum on business plans. Click here to visit the forum.

Now to the small projects which form part of the business plan

1.0 Objectives and mission statement

Take a look at the interior design Plan Outline in the panel to the left in the figure above. Note that it starts with an Executive Summary, with two sub-headings, objectives and mission statement. We would advise leaving the writing of the summary till last, but you should perhaps start the development of your business plan by starting your word processor (we have a link to an online course on learning to use Microsoft Word below, but every Windows computer and every Mac has an in-built word processor as part of its operating system), set out your own objectives and some form of mission statement. In the online sample, the objectives are:

"The primary objectives of our firm are to:

  • Exceed customers' expectations for service and product.
  • Increase the number of clients served by 15% per year through superior performance.
  • Develop a sustainable start-up business that is profitable."

and the mission statement:

"Hamlin and Park Design's mission is to assure superior customer service by doing the following:

  • Open communication with clients. The explanation of the "pros and cons" of different selections and design options are discussed in detail.
  • Include the client in every stage of the design process.
  • Exceed the customer's expectations for the project.
  • Maintain continuing education of the latest development and innovations in the interior design field."

Your task is to research and write your objectives and mission statement for your consultancy.

Resources: Visit our online forum where you can contribute and learn from the experiences of others. Click here to visit the forum

1.1 Capability statement

Communicating effectively with your clients is an important part of every landscape designer’s life. In this project, we will try to help you improve your communication skills by creating two documents you will require in the practice of your profession.

Imagine that you have received an enquiry from a client who owns a two story terrace house. They want you to provide a detailed design for the land area at the rear of a terrace house. The client has contacted several landscape designers who he is considering commissioning, and he wants a statement of capability from each. You may not yet have one and this mini project encourages you to develop a standard capability statement that you can keep on file and send (with a covering letter) to any potential clients.

Tip You will be familiar with the site as it is the project we did earlier. Most designers would use Microsoft Word to prepare both the covering letter and capability statement.

So we need a covering letter (of no more than one page with your logo and address details in the letterhead - make up the names and addresses in the document - set the letter up as a template in MS Word - do not simply do a 'saveas' when sending a new letter out) and (as a separate document) two or three pages of a capability statement.

Tip Your capability statement should mention services you offer, your fee structure et al. Much of this material will be incorporated into your business plan [see section 3.0 ]

Note: if you have not designed your logo, now is the time to do it. Start GardenCAD and design the logo. Keep the .Vec file as the master, zoom extents and maximize the view, copy the screen to the Windows clipboard, start IrfanView and paste the clipboard image into it. Make a JPG or GIF version of your logo and put into the header of your Word document. [movie required]

Garden designer logo - screen grab from GardenCAD

Logo

Hint: Do not include text in your logo. Include text such as your address and contact details in using Word.

Sample letter with logo in header

Letter

References:

Visit http://www.diploma.gardencad.net/node/100 for a list of services garden designers may offer. You will include and amplify these in your capability statement. Bonus points awarded for adding to the list!

Revisit the module on designing a logo:http://www.diploma.gardencad.net/node/79

For information on fee structures, visit http://www.garden-design-courses.co.uk/SGDFeeGuidance.pdf

Resources:

Extension exercise:

Turn your capability statement into a PowerPoint presentation.

1.3. Prepare a generic site survey/design brief

You will find that most potential clients do not provide you with a well defined brief. We think that it an excellent idea for you to prepare a generic brief which you can send to the client (after they have read your statement of capability and decided to appoint you).

In this project, you will take the published design for the Terrace House project (which contains most of the components you would find in a standard design job) and, using it as a model, develop a generic site/survey brief from it. You will use the brief (template/checklist) when you go on site, but we would like you to explore the possibility that you could get the client to use it possibly saving time and effort.

The brief needs to be easy for a lay person to understand and modify - it might be a simple as a check list developed in Word os as complex as a sheet of graph paper on one side and a list of questions on the other with a request for the client to make a simple mud map and answer some questions about the style of garden they are interested in you developing.

You might think about providing the brief as an interactive sheet on the Internet or as a link to a Word document on your web site for anyone to download. Hopefully, you will get a want a brief back from the client that you can work from. It's all part of communicating effectively with your client and starts at this very early stage.

Brief

References:

Here is an interesting link on the subject from Canberra, ACT

Visit the online Diploma course for some more information on designing a generic brief. [Planscapers in preparation]

Some links that illustrate what others are doing in this area:

Resources:

2.0 Company summary

The second part of the business plan is to create a company summary. As far as a company summary, the sample plan says

"Courtney Hamlin and Katherine Park will start Hamlin and Parks Design to offer a wide range of interior design services to clients in southwest Claremont. The company has a high level of expertise in interior design and will provide superior personal services to all clients. Courtney and Katherine take pride in knowing that 50% of their business comes from repeat clients and their referrals.

Our responsibility as interior design professionals is to take the client's design goals and utilize our skills and resources to exceed the client's expectations for service, value, functionality, and beauty."
 
Company Ownership
The owners and designers of Hamlin and Park Design are Courtney Hamlin and Katherine Park.
 
Start-up Summary
Courtney Hamlin and Katherine Park will invest $60,000 in Hamlin and Park Design. They will also secure a $50,000 loan.
The following table and chart show projected initial start-up costs for Hamlin and Park Design. The figure below summarizes the financial structure of the prposed partnership.
 
Excel graphic
 StartUp
Startup2
Tip Financial analyses such as these are best done using an Excel spreadsheet, so make sure that you have completed our online course (see resources below) before tackiling this part of your project.
 

2.1 Prepare a 'design and build' proposal

Let’s imagine that you have won the job, the client has commissioned you, but instead of a (simple! design exercise), he has asked for a full design and build. He wants you to project manage the whole job. This is going to become quite a big undertaking and you will be risking some money of the project. To prepare a quotation, you will need to learn to effectively use a spreadsheet - Microsoft Excel is the industry standard software. Your spreadsheet will show complete costing - design time at hourly rates, provision of labour, supply of plants, commissioned sculpture, building walls, calculate volumes and areas [how useful is GardenCAD for that?], calculate profit margins, carry forward numbers etc.and MS Project (see later).
 
 

Extension exercise:

Make a PowerPoint presentation of the design and budget.

References:

A design and construct check list.

CheckList

Resources:

3.0 Services offered

The next major section of the business plan is the services you intend to offer. This should be straightforward as you have already looked at the type of services that a landscape consultancy offers.Here is an example of what one consultancy offers.

Services

We have listed the services from our ealier module below. We would like to think that you can offer some of your own - photography, web design or printing services perhaps.

  • Preparation of detailed landscape design plans including plant schedules.
  • Cost estimates for agreed works
  • Designs for hard landscaping elements such as walls, paving, decks, garden sculpture & artwork
  • Designs or procurement for special elements such as water features, furniture and lighting
  • Incorporation and advice on sustainable landscape principles
  • Obtaining pricing, nominating contractors and obtaining tender prices for construction
  • Supervision of all works and installations
  • Supply of plant materials and routine maintenance of designed gardens

References:

Some links of interest:

3. 1 Negotiation on a quotation price

You will often need to negotiate with you client. This might involve persuading the client to increase their budget or you returning to the design and reducing its cost. Either way, you need to conduct negotiations in a professional manner.

Let's imagine that the client has asked you to reduce the cost by 25%. How would you go about negotiating such that you reduce the cost by 12.5% and get the client to increase the budget by 12.5%.

negotiate

Click here to check out this advice

4.0 Project management

Project management has been going on for a very long time - hundreds of years. When the pyramids were being built, someone was tracking resources, scheduling and the specifications for the final deliverable. We know that the building was completed, even though we know nothing about whether it kept to budget!

A review of project management per se is outside the scope of this course, but some of you may like to take a very brief look at what is a hefty topic.

Some definitions to start with

  • A project (carrying out a design and construct job) is temporary. The duration may be short, but every project has an end date. This is very different to ongoing operations which do not have an end date.
  • A project is an endeavour. Resources such as people and equipment are deployed in a team environment. Planning is required; projects do not happen spontaneously.
  • Every project creates a unique product or service.
  • Track all of the information you gather about the work, duration, costs and resource requirements of your project;
  • Visualize and present your project in standard, well-defined formats;
  • Schedule tasks and resources consistently and effectively;
  • Communicate with resources and other stakeholders while you the project manger, retain ultimate control of the project.

Project Scope/ Project Charter

Every project needs a charter. Here is a link which deals with the need for a charter in some detail.

Phases in a project

Start-up  - The basic setup stage of the project. Working closely with the client to establish the key deliverables and scope of the project

Planning  - Detailed planning which includes the activities and tasks to be performed, the resources who will be performing them and assigning ownership and responsibility.

Execution - The team execute the plan. The project manager is monitoring the key activates and directs the overall project. The project manager does not lead individual disciplines but oversees and co-ordinates the work-flow of the project. The project manager controls the change process and is monitoring and communicating these to the team.

Close-Down - Following the project completion the project manager controls the completion of the operation. This may include documenting any post project s activities or completing a post implementation review.

References

Visit http://www.diploma.gardencad.net for more information - examples of project plans.

Resources:

5.0 The business plan

The figure below shows an outline of a plan for an interior design agency. Yours can be modelled on it.

Outline

A business plan for a landscape business:

Define the business aims. What are business goals, objectives and vision? How will they articulate these? Are they realistic and achievable and how will they measure success

Develop a tight Executive Summary [ leave this to the end]. This is developing the basic point summary of what their business will be. It’ll cover what their specific target areas will be and what they believe the business opportunity is. A basic view of their funding, and marketing strategy. This will be about writing concisely and to the point.

Describe in more detail the opportunity. Here think about the services you wish to deliver and do they match with what clients may be looking?  As part of this try an find some good examples of vision statements etc.

Next they need to understand the market. What is the market looking for? How will they research this? What strategies will they use to see if their business model will find a market? How will they identify their key competitors and what strategies will they use to compete successfully.

How will the business operate? What is the best approach (sole traders, a company?) Will they be operating out of a single building or working apart. If they are going to work together how will this work. How will work be divided and how will the costs of the operation are handled. We don’t need dollar numbers here but rather what things they need to consider. Would be good to get some business legal advice (maybe the law council) in here to talk about legal responsibilities.

The budget. Hopefully here we could get some help with someone with a small business financial background. We are really more interested on the things we needed to consider and some a general numbers. The key message is to engage a good accountant early so the financial side is always under control.

Sustainability

You will want to educate your clients about sustainability. Click here.

A presentation - use MS PowerPoint. 



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