We meet with all our peer group members midyear. Our goal is to assess how everyone is doing and help everyone gear up for a strong Q3 and beyond.
(Photo: maxkabakov/iStock / Getty Images Plus/Getty Images)
I culled numbers from a sampling of 45 of our members from these meetings. Here is what the numbers say:
Revenue
Revenue compared to budget
On average, these 45 companies beat revenue budgets by almost 1 percent. That’s good.
When we break down the numbers, we see a more nuanced outlook.
- 55 percent of these companies are ahead of budget,
- 45 percent are behind budget.
Note: The top firm in this sampling is beating its budget by 50 percent. Overall, I am proud to see such competence with monthly and annual budgeting and the ability to hit budgets. This is key to financial success.
Revenue compared to last year
We found 85 percent of these companies are doing better than last year, and only 15 percent are doing worse (from an earned revenue point of view). That’s encouraging.
For the whole group, revenues increased on average by 23 percent last year (with the top firm enjoying a whopping 91 percent increase). That double-digit growth is excellent, given the tentative nature of this year’s economic news.
Profit (net to owner)
First, let’s define net to owner. We look at profit combined with the owner’s salary to even out how owners may pull their income from profits vs. payroll.
Profits compared to budget
Over half (25) of the companies surveyed are ahead of their profit budgets. On average, the group of 45 companies beat their profit budgets by 70 percent. This large bump is due in part to conservative budgeting by some and to a couple of outlier companies doing exceptionally well.
Profits compared to last year
The group average shows an overall 20 percent profit improvement over last year. That is strong! As we dive into the numbers, we see 64 percent of the companies see more profits compared to last year, while 36 percent are equal or are behind last year’s numbers.
Sales and marketing
I’m hearing a mixed bag with typical job sizes and lead flow. Some report strong lead volume and sales, and others report lags.
On average, leads seem less strong than just a couple of years ago but still strong compared with the pre-pandemic years. Backlogs seem to shrink, although some companies book deep into 2024. Others report a 1-3 month backlog.
As you can see, it’s a mixed bag, with a current undertone of caution in parts of the country. When in doubt, talk to planners and builders as they can see the future.
Your challenge: finishing the year strong
- Half the battle is starting the year strong. But the past is the past.
- Now you have to finish strong.
- Ensure your proposals reflect the actual cost of goods.
- Track revenue vs. expenses accurately (as earned, not invoiced).
- Share monthly results with the team so everyone can be part of achieving a strong Q3 and Q4.
Increase motivation
The biggest motivation you can supply your team is information.
The more you remove uncertainty and empower them with information to make decisions, the more motivated they will be!
Beyond that, watch all costs as it fluctuates the rest of the year. Look also at overhead expenses as it can be sneaky.
P.S. If you want to learn more about my high-impact peer groups, visit JeffreyScott.biz/PeerGroup.
About the Author: Jeffrey Scott
Jeffrey Scott, MBA, author, specializes in growth and profit maximization in the Green Industry. His expertise is rooted in his personal success, growing his own company into a $10 million enterprise. Now, he facilitates the Leader’s Edge peer group for landscape business owners—members achieve a 27 percent profit increase in their first year. To learn more visit www.GetTheLeadersEdge.com.Subscribe to Landscape Management
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