Best practices: budgeting flexibility
1 Sep, 2005 By: Landscape Management Staff LDB SolutionsPlan for the unexpected
It could be argued that the managerial skills of landscape design-build professionals have as much of an impact on success as their design skills. After all, the professional who doesn't hire the right people or budget to purchase needed equipment or supplies is at a severe disadvantage — no matter how great his/her design skills are.
Everything hinges on the budget. A well-prepared annual budget should include what you feel are the needs of your business — both in the near-term and the distant future. While it is built on estimates of sales and expenses, it also has to be flexible. That's why it's good to have regular budget reviews (monthly or even as much as weekly). For many, this means a rolling, flexible budget. In those reviews, you and your managers can update the team on new and anticipated sales (or losses of sales), new and anticipated expenses, additional purchases needed, cash flow issues, large payments needing to be made to suppliers, slow payments from clients, and other factors that influence your operation from week to week. With this type of system, you can easily track your current profit picture, as well as monitor growing expenses.
A professional presentation
Depending on the size and scope of your company, you may have separate budgets for design-build, maintenance or even snow removal. If you are responsible for one part of your company's budget, remember that you're just one part of the pie. Familiarize yourself with the operating expenses and income from other areas of the company. Above all, know your budget backwards and forwards so that you can easily answer any questions about it. Expect it to change during the season, but try and be as specific as possible while planning it.
Strong leaders communicate strong goals. Relate your budget numbers back to the stated goals for the company's design-build efforts and back them up with historical data.
The unexpected is always just around the corner in the Green Industry — from severe weather damage to regulatory challenges. Even so, by being as prepared as possible, you should be able to stay within a few percentage points of your budget forecasts.
Editor's note: Each month, we'll present a Best Practice you can use to measure your operations. We base these measurements on established industry data, input from practicing landscape contractors and other sources we believe to be credible.
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