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Profit Power: Getting to 20 percent net profit

January 20, 2016 -  By

As I help my clients plan for a successful 2016, I’m reflecting on what separates the average contractor from the real winners (those in the 15 percent and 20 percent profit range).

How proactive of a leader are you, on a scale of 0 to 10? Are you lower down on the scale, closer to 0? If so, you’re in the washing machine, sopping wet, chasing your business problems seemingly in circles. Or are you closer to a 10, proactive in nature, standing outside the washing machine, orchestrating your team and building your company proactively?

Here are my observations of the proactive leaders of these high-profit companies:

  • Uses a rolling budget and is accountable on a monthly basis for results.
  • Understands how to manage and maximize capacity, i.e., runs efficiently without gearing up with too much equipment and labor.
  • Sets fewer bigger goals; doesn’t getting sucked into the weeds with too many priorities. Pushes one to two things forward a mile each week; doesn’t focus on too many things at once.
  • Doesn’t offer every business service; instead, focuses on a few services and does them exceptionally well.
  • Is crystal clear what green light clients are and fine tunes systems to qualify out the red light leads.
  • Puts empowered leaders in place in each key area. Does not accept mediocrity.
  • Shifts from doing everything to delegating and letting others do their jobs.
  • Takes action immediately. Doesn’t sit in repeating problems.
  • Uses incentives to motivate; creates a win-win-win atmosphere.
  • Is systematic; develops systems and builds the business one step at a time.
  • Is exceptionally good at communication. Keeps everyone informed and creates an atmosphere of accountability.

To earn 20 percent net profit, you need to stand outside the washing machine and be a proactive business builder.

Join Scott for a few educational opportunities in the next two months. His Start the Year Strong Webinar is on Feb. 18 and his Grow Your Landscape Business Workshop, hosted in conjunction with LMN and Caterpillar, is coming to three cities in February and March. LM is the media sponsor for both events.

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About the Author:

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.

1 Comment on "Profit Power: Getting to 20 percent net profit"

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  1. Nick says:

    I think to be in this industry and net less than 20 would be just waste of time.