Landscape Management, October 2012
SEE HOW WE CAN HELP TAKE YOUR BUSINESS NEXT LEVEL 101 LANDSCAPEMANAGEMENT NET costs and accurately price the work Have an income statement that separates total company performance into the various proft centers with which you conduct business Furthermore break down all fnancial information by month and compare that performance to the budget Without a solid reporting system youre taking far too much risk by not knowing where you stand fnancially This industry is risky and you make it more so by not having the correct information to guide you 5 No budgets Fewer than 10 percent of the businesses in the U S prepare a budget according to Inc magazine A budget means a working budget one you think through methodically starting with how much net proft is needed to support cash fow and identifying how youll spend money in each overhead account so you know how much gross margin you must generate to support your standard of living Once the gross margin is established analyze the backlog to determine the margin youre carrying into the year Then forecast how much new business you must sell and at what price to create gross margin coverage for overhead and proft needs Every month track how youre performing against budget and make adjustments to your plan to refect actual performance rolling budget A budget is the road map for your business needed to make smart decisions 6 No pricing by proÀt center One of the principle reasons to categorize your income statement into proft centers representing various types of work is pricing It makes no sense to price all types of work the same Breaking your income statement into proft centers will allow you to create a relationship of the direct costs necessary to perform the work and overhead required to support it Once done depending on the type of work a relationship between overhead and direct costs can be established such that you can create the appropriate markups to price the work correctly Without correct pricing you run the risk of pricing low risk work too high and not getting it and pricing diffcult work too low and not realizing it 7 No long range planning Creating a vision of where you want the company to be in three to fve years is a constant in highly successful companies The three to fve year plan starts by understanding what you do best then strategizing how you can capitalize on that skill set to maximize the bottom line A long range plan which isnt a fnancial plan comprises a series of defnitions of how you see the business in the future For example What markets will you serve What types of work will you perform Where will you fnd your labor pool What facilities and equipment will you require What will be the capital required to fund those requirements What organizational growth do you see What tracking systems do you require Will you be expanding geographically Its brainstorming at its best but heres the catch on any one of those issues well likely be spending money to achieve our long term goals Be proactive to maximize effciency and the return on investment 8 Lack of labor control Were in the service business which means we sell labor but its amazing how few of us control our labor force Consider the following Do you have proven labor standards by which you estimate every job TO THE Capture more market share Transition from the worker to the business leader Internet marketing sales support Systems to build your business Solutions to help streamline your business 800 638 9851 GroundsGuysFranchise com
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