October 2014: Editorial advisory board

October 22, 2014 -  By

What’s the most important thing for landscape industry professionals to remember when planning for the following year?

Advisory Board

Landscape Professionals

Richard Bare

Arbor-Nomics Turf of Norcross, Ga.

“Remember to figure in the cost of new equipment for the new year. Many entrepreneurs get going with bank loans and new equipment but forget to add into their model (or budget) the replacement costs. They work too cheap then can’t afford to fix or replace things.”

Chris Joyce

Joyce Landscaping of Cape Cod, Mass.

“You have to start with your budget. Your budget will give you direction when planning out your year, especially in these three areas: sales, staff and equipment/capital expenditures.”

Adam Linnemann

Linnemann Lawn Care & Landscaping of Waterloo, Ill.

“Always have a savings account as a back-up income or cash flow supply. Having savings is important in case certain seasons don’t go as planned. Also, I suggest pre-purchasing your materials for 2015 in advance. We did and we received a significant savings, received bonus money for our purchases and now know our cost on materials for the 2015 season.”

Jerry McKay

McKay Landscape Lighting of Omaha, Neb.

“Concentrate on expanding your sphere of influence by focusing on existing clients and strategic partners—people that refer you work.” 

Industry Consultants

Kevin Kehoe

3PG Consulting of Laguna, Calif.

“Make certain that your sales plan for revenue is realistic and that these revenues grow at a rate of 2.5 times the increase in overhead costs. For example, I add an account manager and all his costs equal $100,000—salary, computer, phone, benefits, yadda yadda). My sales plan in my budget must increase by $250,000. This doesn’t mean that that new account manager sells that. It means I have to cover my overhead and if I add costs I must add revenue. The math is simple and ruthless on profits.”

Phil Harwood

Pro-Motion Consulting of Farmington, Mich.

“Too often, planning processes stop with creating the plan. The implementation of the plan is just as important as creating the plan itself.”

Frank Ross

3PG Consulting of Alpharetta, Ga.

“I’ll put it into two words: revenue and labor.”

First, to the issue of revenue. There are many facets to the revenue topic; I’ll address one: renewals. In most of our companies, nearly 80 percent-plus of the revenue stream is renewed each year. In our travels, we see some who believe in automatic renewal. “We’ll keep doing the work for the same price until we hear from you (the customer) differently.”

I’m not a particular fan of this approach, but I find it surprisingly popular. We see some who believe in an across-the-board percentage price increase over last year. I’m not a particular fan of this approach either. And, we see others who actually track how they performed the work over the past year, analyze each job as to the revenue earned per man-hour and selectively decide if a job requires a price adjustment or not. These companies, we applaud.

The next item is labor. Throughout the country, skilled labor is becoming a valuable commodity, and it’s shrinking. We struggle to locate and recruit persons do perform our work—and hard work it is. We look to the local markets and when that’s exhausted we look to foreign markets to invite workers to seasonally join our companies. However, questions surrounding those out-of-country sources of manpower are beginning to raise their ugly heads. Currently, the entry fees are expensive and questions abound regarding the minimum wage governing those workers. Lastly, there remains the smokiness surrounding the Affordable Care Act and how we, as owners, will offset the expense through efficiencies elsewhere in our companies. That all said, we’ll persevere. Each of us will find a sustainable solution for our companies. However, don’t dally. Address these issues quickly and have several contingency plans in place prior to beginning next season.

Jeffrey Scott

Jeffrey Scott Inc! of Trumbull, Conn.

“As CEO, make sure you’re personally spending your time on your PPUT: (your passion, that ultimately drives profit, that you can uniquely do, that doesn’t suck up your time.) Develop plans to delegate activities that don’t meet these criteria.

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