We recently caught up with Landscape Management Network (LMN) founder, Mark Bradley, to discuss the challenges many landscape business owners face when trying to budget and track the success of their companies. Although we can take the pulse of a lot of numbers, Bradley focused on two of the most important pulse points to measure:
One of the most important, and simplest, numbers to watch is your sales goal. With a few years of sales history, you can build a benchmarking spreadsheet that will help you know if you’re on track. Here’s a simple, yet effective method:
Once you have created this tracking tool, the benefit becomes very clear! For instance, if you know your business averages 35% of revenue by the end of April, then at the end of this April, you will want to ensure you have met 35% of your sales goal for the year.
Nothing will make (or hurt) profit quite like field productivity, so it’s a critical number to watch. You can "guess" at staff productivity by seeing how fast they get out of the yard, or seeing jobs being completed on time, but the numbers can tell you a more accurate story without any guessing. Bradley advocates the importance of separating your field labor payroll from your overhead payroll expenses into different accounts. This allows you to quickly identify how much in wages you’ve paid your crews, and it makes the following kind of management much faster and easier. Here’s how you can monitor the pulse of your productivity:
This shows you something you already know … but with hard numbers. Here’s a common scenario: In January, you likely have more unbillable time, giving the crews some hours around the shop to give them some income. Therefore, you spend a higher percentage of your sales on wages. By April, that percentage has dropped dramatically, as you’ve now invoiced a bunch of work on jobs you haven’t spent a lot of hours on yet. That percentage climbs back up in May when crews are pulling a lot of hours getting out of the gates, then it starts to normalize again as the year continues.
This exercise will help you spot any issues with productivity and begin fixing those inefficiencies now, before it is too late.
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