By Peter Roberts, co-founder of ManageMowed

There are many different words that business executives never want to hear. Right now, there’s one dreaded word being whispered on America’s lips – recession. Even if franchise industry professionals don’t avidly keep up with the news, they’ve started to hear about, or even anticipate, the possibility of a recession and how it’s going to affect themselves, their family and their business.

Like many industries, the service industry has undergone a series of disruptive shifts since the pandemic, which permanently altered consumer behavior like never before. Now, on the brink of further economic uncertainty, service brands from plumbing and electrical companies, to property maintenance and cleaning services, are waiting with bated breath to take action if worse comes to worst and a recession takes full effect.

Dealing with the fallout from a recession is not a new experience for many businesses, and was a huge learning moment for ManageMowed. Experiencing the recession in the mid-2000s provided our team with the ability to prepare for future hardships, and avoid a disastrous blow to our continued growth as an emerging franchise. Many of the steps we took, including evaluating expenses, focusing on existing clientele and being ready to adapt to the changes, can benefit other service brands across the board.

The ManageMowed Experience

2007 marked the longest recession in American history since WWII, that wouldn’t end until June 2009. Millions of hard-working Americans lost their jobs, with the unemployment rate peaking at 10% in October 2009. While the recession left few industries untouched, the service-brand industry suffered immensely for many reasons.

The main reason that so many service-brands struggled in the Great Recession, was because their concepts are often the first to go. When a family is tight on money, they’re going to be looking for every aspect of their living where they can cut down on costs – with lawnmowing and landscaping being one of first eliminated. ManageMowed lost approximately 80% of our business in the first month of the recession alone, and it quickly became apparent that we needed to do something if we were going to make it out of the recession intact.

After seeing so much of our business affected in such a short amount of time, it didn’t take us long to realize how we could combat the effects. We looked at our business model, and we realized that commercial jobs were still very much in demand throughout our markets. We made the decision to shift our business model to focus more primarily on B2B jobs rather than residential ones. Despite a recession, places like gas stations, office buildings and other businesses still need to make sure their properties were maintained and safe for consumers. Curb appeal is what makes them attractive to potential customers, and, in that sense, property maintenance is essential for them.

The decision turned out to be the best one we could have made at that time, and it ended up becoming the permanent business model that we still use system-wide today. While we still have the ability to take on residential jobs, the focus on commercial opportunities allowed us to find a more constant and reliable revenue stream. In fact, it better prepared with strategies that allowed us to weather the next economic hardship and beyond. A great example of this was the lock down during COVID-19 in 2020. So many businesses were faced with the need to adapt their business models to meet new regulations throughout the states. Because of our commercial-focused operations, which deemed our services essential, we were able to grow our business during the pandemic.

Rethink the Recession

There are a lot of anxieties that come with the possibility of a recession – but there are also plenty of ways that service brand franchisors can prepare themselves and their business and leverage the circumstances to their benefit.

First, franchisors should evaluate each and every operating expense they have. Just like a family will be cutting out the luxury expenses to save money, service brands need to figure out what expenses are absolute necessities to protect, and which ones can be reduced while still preserving the quality of its services.

One expense that ManageMowed has been able to do away with, and never truly needed to begin with as a service area business, was costly real estate expenses. As property maintenance experts, we work better out in the field with our clients as opposed to sitting in an office. Instead, we honed our reputation for timely and effective communication and invested in an integrated CRM platform that helps our franchise owners manage and schedule vendors for their clients.

Next, it’s important to focus on providing quality services to existing clientele rather than looking to attract new customers. Ensure that the focus remains on maintaining the quality and reputation that the brand is known for. Franchisors’ that demonstrate their loyalty to existing clients often find that the business continues to grow through referrals to family, friends and colleagues.

Finally, service brands should be open to adapting their business model to changing demand within the industry. When the first recession happened, we really had to take a step back and figure out where ManageMowed was needed by our commercial clients. Once a brand takes a hard look at its business model, it may find that the demand for its services is coming from an entirely different audience than it used to.

The most important thing a brand can do is to start looking at their business models and systems now. Don’t wait until a recession happens to identify the obstacles and challenges ahead. There is never a bad time for service brand franchisors to reassess  their operations and business model. Recession or not – the franchise system will be much happier knowing that leadership is prepared to handle the worst of it, rather than being caught off guard. It’s not the easiest decision to make, and it will take enormous effort and strategic thinking to achieve. However, a franchise that is ready for the turbulence of a recession will be better able to look ahead to new opportunities and leave its competitors in the dust.