Landscape Management, October 2012

BUSINESSPLANNER2013 Do you prepare a labor budget for every job you bid Do you measure the hours and tasks completed each day Does the labor budget include the support activities such as load time travel clean up maintenance of completed operations and a punch list Does the crew leader have a defnitive understanding of what needs to be accomplished every day along with the hours budget to accomplish those tasks Do you track weekly billable time against total hours paid Do you know the composite wage rate of your crews Do you track the amount of overtime hours paid against total hours paid If the answer to any of these questions is I dont know you can control your labor better Do that by measuring it William Edwards Deming an American statistician said it best If you cant track it you cant control it 9 No control of overtime Is overtime a good thing As far as your employees are concerned its most appreciated But is it good for the company Do you control it or leave it up to the employees Many consider it a necessary evil But overtime is as much a controlled line item in your fnancials as advertising Accept that overtime is a management decision not an employee decision To control it appreciate theres good and bad overtime Good overtime includes Setting an annual budget for overtime and because you do that cost for overtime is embedded in your pricing strategies and is captured over all jobs Billing the customer at overtime rates when you work overtime Billing certain skill sets irrigation and lawn care techs for example at a high rate Whenever the hourly billing rate for an employee is three times his hourly cost you can work as much overtime as you can bill and youll be fne fnancially All other overtime is bad because its neither embedded in your pricing nor billed for separately which means its a drain on proftability 10 No ownership of benchmarks Most managers assume people under their tutelage know whats important and will do what they must to achieve excellence I beg to differ Employees are willing warriors and will do your bidding If you dont set expectations theyll interpret what they think you meant to say Heres an exercise List what you believe defnes an excellently run company Do you measure those things And if you do have you assigned ownership of those items to someone on your team Do you measure leads coming in know how many leads to chase on average to sign a contract track job effciencies and proftability as well as overtime know the revenue per hour you earn on every job know by proft center if youre hitting sales and margin goals as well as whether youre making a proft in each budget and reforecast the budget every month following the publication of fnancial statements If you track these items is each owned by a key employee and do you hold that person accountable for the performance of each If not theres a huge opportunity for your company Tracking creating measurement benchmarks assigning ownership and holding people accountable at all levels will propel your company to levels of effciency and proftability never seen before LM Ross is a Green Industry consultant with 3PG Consulting Contact him at frank@ 3PGConsulting com LANDSCAPEMANAGEMENT NET OCTOBER 2012 102 QUIck tIP Make collections a responsibility of the sales process