Customers will routinely ask, how much will it cost for an estimate of a landscape design. Some companies do it for free, others charge a fee. But the costs we’re concerned about in the landscape estimate are all the costs the landscape business is paying. How much does it really cost a business to complete a landscape design? And more importantly, have you, as landscape business owner, accounted for all of those costs?
“It’s important to know your numbers, know where you need to be and know when to say ‘when’ on lowering a price,” says Jim Huston, president of J.R. Huston Consulting.
Pricing can be a common frustration for any kind of landscape business. Not only are you dealing with competition and trying to beat low-ballers, but you have to be fair and honest yourself. Your business has expenses, costs and labor to pay out. And cutting from that every time is a quick way to dry up any revenue you may pull away from a job. That’s why it’s so important to know your costs and how to work with them. Landscape software can help define those costs and make sure they are a part of each budget as you prepare estimates and proposals for your clients.
Get Your Break-Even Point
There are some companies that just try and break-even on every job. Employees get paid, and the owner gets his hours in from being part of the crew. The problem is, there is no scaling up of the business, no wiggle room in pricing and no recovery of other overhead or emergency costs. What happens if something goes wrong at your expense? Whose hourly wage is covering for that?
Before you can even start thinking of a price for a landscape design, you need to understand all the costs going into it. Do you have an office space? How about the people in the office answering phones and completing paper-work? What about your estimators who are working off designs and converting them into proposals? There are truck expenses, gas, oil, equipment rentals and so many other overhead related costs that often get ignored.
“It’s important for contractors to understand how to calculate a break-even point,” said Frank Ross, a financial management expert who specializes in the Green Industry. “This comes from knowing your numbers. But then it’s even more important to understand how your break-even point will be impacted by some of the decisions you make.”
By taking into consideration all these overhead costs, you’ll be able to come up with a break-even point on every job. The amount of revenue you need to generate per project, to recoup all the costs you are paying out. Landscape software calculates that using many different recovery models. It gets you to a break-even point, and then you can start adding on mark-ups for products and services.
Add Your Profit Margin
With your break-even point set and your overhead covered, you can now start adding mark-ups to your products, labor, services and materials. In a healthy environment, Lawn and Landscape Magazine says you can apply a 20 percent net profit margin to the break-even point. Once again, you can set your mark-ups in your landscape software in order to automate the process of marking up each item by a specific amount. Materials could be by 20 percent, labor by 15 percent and plants by 10 percent. Each time an estimate is created, the mark-up happens automatically.
More importantly, because you did the break-even point first and then added a mark-up, you now have room to move when a competitor comes in at a lower cost. When customers ask, ‘how low can you go’, you can still maintain a level of revenue that is acceptable to your business by decreasing the mark-up, without touching the break-even cost. That will give you confidence knowing that on each job, you won’t be losing money.
“If I have a job that is purely labor, no materials, I still want to make money,” Huston says. “You should make sure your labor is appropriately priced instead of trying to make up for underpriced labor with a heavy markup on landscape materials.”
Maintaining Your Margins And When To Walk Away
To scale your business properly, sometimes you need to walk away from business. By setting your profit margins, you will know how much profit per job you are making, covering overhead costs as well. When there is more competition in an area, prices can be driven down by discount landscape design businesses. Sometimes you can turn a customer over and make them understand the value. Sometimes you can’t, and you need to know when to walk away because there isn’t enough profit in this particular job.
By knowing these numbers, which can be set up in your landscape software budgeting tools, you know exactly where to draw the line. How much of your margin can you cut before the job is not worth taking on anymore? You want to be winning more bids, but not at the expense of your profit margins and revenue streams. With a shortage of skilled labor, taking on the most profitable jobs is important in order to scale your landscape business. Accepting every job that comes through can be a dangerous practice and lead to you getting the discount brand tag.
Always Know Your Numbers
The best way to know your numbers is to use a landscape software. DynaSCAPE’s Manage360 has a budgeting and sales tool that will give you the breakdown of each job you are estimating for. Know your break-even point, establish your mark-ups, and if needed, tweak your margins so that you are still generating acceptable profit from the job, without cutting yourself short. Landscape software and budgeting is something many older landscape businesses are turning to in order to make proper decisions for their business moving forward.
The start of any new decade is the start of a brand-new style. A look throughout history has shown that each decade has its own unique identity, and 2020 is going to be no different. The early 2000s saw an environmentalist movement that has engulfed the last 20 years. We’ve seen the rise of more organic products and materials, less waste and the establishment of smaller outdoor spaces in places where there isn’t normally one. Landscape design has come along way from the simple basics of the early 1920s to what it is today.
So, as we move into not just a new year, but a new decade, it’s now we will figure out what the new landscape design trends for 2020 and the 2020s will bring us. With the urban-jungle continuing to expand, people are looking for their own green space. With so many ideas out there, let’s look at some of the new trends coming to landscape design that professional landscapers are already planning for.
Low-Maintenance Landscape Design
The top trend amongst all homeowners is definitely low-maintenance landscaping. There will always be a certain level of work to maintain a garden area, but the trend is leaning towards doing as little work as possible. Simply put, lives are getting busier, there are more distractions and homeowners don’t want to spend the same time maintaining a garden or lawn when they could be enjoying other activities. Low maintenance turf lawns will be in high demand, which will come at a higher price. However, the time savings of now having to water and fertilizer is preferable to homeowners.
It’s also important for environmental reasons to ensure lawns are drought resistant, as a lack of water from Mother Nature will either leave a homeowner with a hefty water bill or a patch of dead grass. For landscape design, it’s about finding that right style that not only fits the owner’s lifestyle but also their environmental and water conservation preferences.
Bring the Indoors Outside
If homeowners have backyards, they want to use them. Many homeowners are looking at backyards as not just grass and gardens, but another room to their home. People are bringing their entertainment to their backyard, so creating an outdoor room is a huge trend heading into this new decade. How landscape design businesses are treating this trend is by adding throw pillows, cushioned chairs and sofas to outdoor spaces. It’s about style and comfort, as outdoor patios are serving a greater function today as a second living room or dining room.
Outdoor kitchens are evolving beyond just the grill to include elements of sinks, countertops and storage for a complete outdoor kitchen. Getting outdoors and back into nature is a definite trend of this new generation, so enjoying their personal outdoor living space is the easiest answer.
The Organic Garden
Organic is still going to continue on in 2020 and beyond, as environmental concerns continue to be front and center. With that in mind, a lot of people are turning to vegan and vegetarian diets, or add a lot more vegetarian options to their weekly meal plan. And rather than going to the store, they are looking at their backyard. Landscape design in 2020 will see plenty of organic space for edible gardens. Gardens that look good to the eye, but also provide a plentiful bounty of vegetables and herbs.
It’s also adding regenerative gardening space, which can be used over and over again. Homeowners are looking for sustainability from their garden in their landscape design. Something that year over year, with proper care, can be regenerated into more edibles. While at the same time, using methods such as composting to help the environment.
One of the most valuable trends to hit 2020 will be the vertical garden in landscape design. As urban sprawl continues, more high-rise apartments are being built in major cities. These owners still want the garden feeling, even if they only have a small balcony or patio. So, they are taking their garden upwards, which is a great way to utilize space, even when there isn’t much of it. It’s interesting to think that landscape design now has to think literally up and down, as much as they think about the width and length of a backyard.
For those with a full green space, vertical gardening is becoming the outdoor equivalent to the accent wall. Rather than just a fence, a vertical garden offers a better overall visual setting and can help create different settings or rooms in a backyard space.
The minimalist movement has moved from the closest and indoor space to the outdoor space as well. Landscape design will have to do more with less. That includes fewer lighting fixtures that still cover an entire area that needs to be lit. That includes placing LED lights under walkways and stairs, or under structures such as benches and bridges.
If a light fixture is to be seen, homeowners are wanting the indoor style lighting to notice, such as chandeliers for seating and dining areas. Much like before, it’s about bringing the indoors outside for a cozy atmosphere.
The New Decade of Landscape Design
When it comes down to it, 2020 trends are pulling a lot from the last 20 years of trends in our outdoor spaces. It’s still about maintaining an environmental space while utilizing the maximum amount of space available. As climate change, new food trends and societies push to get outdoors continues to evolve in the 2020s, so too will landscape designs have to meet these trends with fresh ideas and concepts. DynaSCAPE’s landscape design software is built for landscapers and landscape design professionals and will be able to handle each of these trends.
Whether going vertical, wanting to add the appropriate lighting and or building edible gardens, it can all be perfectly planned and designs for your customers. Offer a full-color view of your designs or take it up a notch with a 3D rendering of your design to really bring the space to life. Customers want the full backyard feeling, so 3D rendering and full CAD color drawings are the trends in landscape design. Take advantage of DynaSCAPE’s Design, Color and Sketch 3D tools to complete these concepts for your customers and win more bids for landscape projects.
Most professional landscapers can find themselves in one of three ownership groups. They are:
Senior owners, who have been in the business a long time
Younger owners, who have taken over a business
New owners, who just started their landscape business
What type of owner you are and the experience you have will affect your approach when looking at technology solutions. Especially when considering landscape business management software. Depending on how much experience you have in the field and in business, looking at landscape software might not be on the top of your list. We are here to tell you why it should be at every level.
Regardless if you are a new owner or have spent decades designing landscapes and providing lawn maintenance, you need to be thinking of some form of landscape business management software. Even more so if you are looking to pass your business along, or get it started off on the right foot. Let’s take a look at each owner and see where they fall on their needs for landscape software.
There are many landscapers today who have spent 25 or more years in the field and continue to do things the old fashion way. If it isn’t broken, why fix it? That can be everything from doing designs by hand on paper to estimating with a spreadsheet and calculator, to planning out jobs based on knowledge of how long they take to complete. And there is nothing wrong with having the experience to know how long it will take to get a job done. Especially when talking with clients and reassuring them you can meet deadlines.
However, there is an obvious problem that comes up when one owner holds all the information on a business. What happens when that owner is no longer around? Perhaps they decide to leave the business, selling it or passing it down. Or they want to step into retirement. Or sadly, something unfortunate occurs suddenly. Where do you go when all the business knowledge is locked away in the owner’s brain?
That’s why senior owners need to be thinking of a landscape business management software. It’s a transfer of information from their own head to a landscape software that can run their business. Being the only one with keys to information doesn’t make for an efficient business. If the owner is the only one who knows how to estimate properly or explain what needs to be included in a project, then they are vital to all aspects of the business. Should they leave, the business goes with them. But by putting it in landscape software, that knowledge can be shared with everyone. And that senior owner can begin to transition away from aspects of the business that depended on them so much before.
These owners have some experience under their belt and are often family members taking over the family business. They have experience working beside the senior owner, but they want to make a change. Many DynaSCAPE customers fit into this ownership type, as they are taking over the business and want to add landscape business management software. That’s because they want to harness all the information they can get, add automation tools, and find ways to be more efficient.
These young owners aren’t stuck in their ways in how to do a job and often seek out landscape software to find a better solution. That includes speeding up design drawing, the time it takes to estimate and how they perform their jobs in the field. With a foundation of a business already set, these young owners don’t have to start from the bottom and fight their way up. But rather, they are looking for tools to improve what is already being done.
They don’t want to sit at the table at night typing out quotes when a landscape software can do that for them. They want greater insight into the business so they can make changes. And that’s why landscape business management software is a tool they are after. That way, they can start to find every efficient way to run a business that was doing good before but will do even better after.
As a new owner, you have started your landscape business from scratch. You may have experience working for someone else or be brand new to the industry. Whatever the case may be, landscape business management software might be what you need from day one. It’s one of those, get off on the right foot situations. By implementing landscape software early in your business process, you have an established system in which to do things. There are no gaps in information and history is definitely always on your side.
Many new owners are a little hesitant about getting new landscape business management software, simply because of the cost of a start-up. With new pricing changes for DynaSCAPE, however, it’s more accessible to get into landscape software. And that way, you are working with a tool from the beginning and not trying to adapt to it later on. That’s the difference in finding and replacing inefficacies, and just not having them at all.
Landscape professionals need landscape business management software
No matter what type of owner you are or where your business is, landscape business management software is a tool that will help you scale your business. From the most experienced landscaper to the youngest, there are definite pros to working with a landscape software and adding automation and efficient functionality to your business. Check out DynaSCAPE’s solution today and see how our landscape business management software is helping every kind of owner scale their business to where they want it to be.
Professional landscaping has come a very long way. According to IBIS World November 2018 Landscaping Services Industry Report, the landscape service industry has annual revenues of $93 billion. On top of that, it represents over a million people and over 513,000 businesses. What’s powering the industry today is still the same quality designers and hardworking men and women in the field. But landscape software is helping these people do their jobs more efficiently than ever before, and that is helping to drive revenue growth year over year.
So, the obvious question is, how do you choose the right landscape software? Firstly, you need to decide where your business is, and who you are as the owner. Are you taking the reins of the family business and looking to innovate with new technology? Or are you a start-up who wants to set the foundation of your business with a software solution? Maybe you’ve been in business for years and it’s just time to move away from the manual tasks that are taking up a lot of your time.
Whatever the answer may be, most people looking to buy landscape software are choosing ones that tick off many boxes:
Better design solutions
Integrated quoting functions
Billing and invoicing integrations
All of these elements require plenty of labor if you aren’t using some form of software to either automate or reduce the work/time needed to complete the tasks. Let’s look at some of the questions landscape business owners are asking when choosing the right landscape software for their business.
What Services Does Your Landscape Business Offer?
Depending on the type of service you provide, your choice of landscape software will range. According to Lawn and Landscape’s 2018 State of the Industry Report, 85% of respondents to a survey said they perform landscape maintenance. Another 85% said they provide lawn care and chemical applications, while 73% said they provide landscape design and construction. Some companies may provide only one service, while others will have crossover and provide numerous services. While each one has their own unique needs, they can all benefit from landscape software.
For those who only provide lawn maintenance, managing your crews, their schedules and their invoices can be labor-intensive. To build in more scheduled calls and keep your crews on top of their contracts with customers, a scheduling tool would definitely increase their efficiency. Manage all of your crews and individual workers from one maintenance scheduler and use a routing tool to create the best route possible, limiting the amount of time spent driving between jobs. It’s a simple way to add more calls into your day, keep your crews busy and optimize their schedules.
If you provide design services, or construction and install services as well, then having the ability to control your entire business from one landscape software is key. Know how your project-based work is affecting your bottom line and what percentage of your business is made up of lawn maintenance. Where are your sales coming from? How are you scheduling all of your people for all of these different jobs? The more you offer, the more a landscape software is going to open up visibility into your business that you need to succeed and grow in the future.
What Do You Want to Get Better At?
When you want to go with a landscape software solution, you generally want to get better at something; that means reducing the time it takes to complete a task or to elevate your game in certain areas. For landscape designers, that means ditching the hand drawings in favor of computer-assisted design. That’s a large step for some designers who believe in their hand-drawing ability, and are afraid to put down the pencil, but from a business perspective, there are many benefits of going with a landscape design software.
For starters, designs can take weeks to produce, and if changes come in, designers often have to start again or break out the eraser. That’s plenty of wasted time doing a drawing again when it was already completed once. Instead, with landscape-specific CAD software, changes can be made instantly, and designs can be updated without needing to start over. It can be a few short hours to apply changes to a design, rather than days of hand-drawing.
Furthermore, having that design software connected to your cost book in your management software speeds up the bidding process. Owners don’t have to look at a design and count each tree planted, or the square feet of paver stones they will need. Instead, the design elements can be exported into a quoting system tied to a cost book that automatically produces the cost of each element of the design. That is done in a fraction of the time it would take to produce it by hand, using Excel spreadsheets for cost books and estimating. Speed equals time saved, and time is money. The faster you finish, the more money you are saving on these tasks. All the while, you’re getting a quality design and proposal in front of your customers quickly.
Which Solutions Do You Need?
When choosing the right landscape software, it all comes down to which solutions you need. What exactly do you need/want landscape software to do for you? Many landscape businesses are looking at management tools to gain more visibility into their business than they’ve had before. That includes more insight into their budgets, crew performance, sales pipeline and how their business is doing overall. Landscape businesses today are a lot more than just the amount of revenue you brought in last year. With landscape software, you can start to dive deep into your business’s performance, and see the areas you need to improve on.
For those looking at landscape software, it’s best to choose one that can handle it all. Remember those services you provide? What if you wanted to grow or add more services? Do you really want to start adding additional software for those, or would you rather have one that handles it all? An all-in-one landscape software that can manage your business and provide stunning design outputs that integrate seamlessly is the answer. So gear up with a landscape software solution that tackles your problems today, and any future ones you might have tomorrow.
Something doesn’t look right to your customer in your design. They don’t like that tree there. It’s the wrong shape for the flower bed. They want a different color of plant, wood or stone. It’s a common occurrence, especially when dealing with people’s tastes, likes and dislikes. Landscapers anticipate change is going to happen at some point throughout an installation project. But how they handle that change can be very costly to their business. With plenty of hours being spent re-doing designs or ordering new supplies, it’s not cheap to the business when change happens.
For landscapers who are used to doing everything by hand, a client’s change in design could mean an entire re-design of their original plan. And if they are not using some form of landscape design software, that means on many occasions, they’re breaking out the pencil crayons and paper and starting from scratch.
“I was trained to do everything by hand,” said Wickie Rowland, APLD of Labrie Associates Design & Build. “I enjoy that whole process. But after a while I started to realize, as much fun as it was, it was cumbersome. I wasn’t able to be all that efficient. When a client had a change they wanted to make, it often meant drawing the whole thing all over again, and that gets old fast.”
Landscape design software saves time
Some landscape designers can take anywhere from three to 12 weeks to complete a design, depending on the size of the property. So, starting from scratch on a large property could add even more weeks to the schedule to complete. If a drawing is being completed by hand, removing an object requires more work than an eraser. It could mean starting from scratch to get it right.
“I started thinking I was going to need to invest in some CAD software,” said Rowland. “I knew these fabulous designs were coming out of it that people were doing.”
Erasing a tree is as simple as hitting the delete button in your landscape design software. With each object being its own individual aspect on the drawing, it allows you to erase, move or alter any object on its own, or as part of a group, but still keep the original design. This is great when customers come in with changes to the design that perhaps only affects 5% of the overall design. It’s not starting from scratch, but just reworking what you already have. That’s something you can’t do with a pencil and paper. You can erase and alter, but once you put color down, you might have to start again.
Made for landscapers
Changes in designs were one of the reasons Rowland moved to DynaSCAPE’s landscape design software. The fun of re-doing designs was no longer there and became a burden to the business. While the idea of switching to a CAD system was difficult at first, the overall experience Rowland got was one with her in mind.
“What made me go with DynaSCAPE is that it was made for landscapers,” said Rowland. “We were the audience. There weren’t also things for architects and engineers, it felt really friendly.”
While the switch from Mac to PC has been a challenge, Rowland said using a landscape design software that is made for landscapers is the difference. It’s not a repackaged tool that was originally made for architects, but rather one that is specifically built for landscapers.
With that in mind, it’s the reason why change requests come naturally in the DynaSCAPE system. When it comes to designs and drawings, no two customers are exactly alike. Details will need to be changed on every design and for some landscape businesses, that means a lot of extra hours to start from scratch. With design software, it’s now easier to make quick changes to any design. Customers won’t have to wait for changes, which can help you secure more bid victories.
Handle change while on the job
Change often comes while on the job. The customer wants the deck two feet wider. They want more or different kinds of flowers in the garden. Or just any last-minute decision they saw on Pinterest. It happens. If not handled properly, change orders can eat away at profits in a business, as the smallest request could end up costing big dollars in supplies and labor time.
That extra extension onto the deck needs more materials and will require extra labor time. Those new plants will need to be ordered, perhaps after the original flowers were already delivered. Those last-minute ideas you didn’t budget for in your original estimate can add hours of labor, but you don’t want to discourage your customers from requesting changes. It is their property, their space and ultimately, your reputation on the line; being a business that can facilitate change is definitely a victory for you.
With landscape design software such as DynaSCAPE, utilize Manage360’s change orders when you need to add, remove and substitute anything. Here you can apply refunds if needed or come up with the new cost of the work if the client is adding from the original design. See the original contract and all the change orders to know exactly how you got to where you ended up at the final bill. And most importantly, keep your financials and margins solid through the project. Don’t lose money by gifting your clients free labor and supplies when they request a change.
Don’t let change scare you
Change doesn’t have to be a scary thing for landscapers. It should be encouraged. It means you can offer more to your customers and in a lot less time. Wouldn’t it be great to show your clients your design and then tell them the changes they want will be done in a fraction of the time? Days perhaps, even hours to make the slightest changes could alter their opinion and ultimately cause them to choose a different company. With landscape design software, you have the ability to use change to your advantage. Instead of it burdening your business with extra hours of work, it’s now a selling tool that will win you more bids with quick turnaround times.
Working in the landscape industry has its challenges. Offering quality at a competitive price, battling price fluctuations, and more competition entering the industry is just the tip of the iceberg. Many in the field are facing these problems head-on, and they are trying to find solutions. As young homeowners continue to drive new demand for landscape design and maintenance, landscape businesses need to find a way to meet the demand. That means using landscape design software, hiring more crews, and growing their business to match the demand.
Let’s look at some of the top concerns from the industry and how landscape businesses are trying to overcome it.
Quality Labor Shortage
Finding quality workers is a challenge. With more competition entering the field, there are fewer workers to go around. Also, some areas are struggling with wages and having their services undercut by discount businesses. Finding good employees can be challenging, but sometimes you just have to make do with what you have. And it might be time to adjust your crews and figured out how to best utilize them while working in the field. With landscape design software, some of the manual work now automated can reduce the number of employees you need. If you’re doing designs and estimates in a fraction of the time, then one person can do the job of two or three people. Similar, finding out who does the best job in the field can help you field super-crews that can provide quality service in a fraction of the time.
High Fuel Costs
It’s a tough pill to swallow every time you go to fill up the company truck or gas cans of fuel for your equipment. As fuel prices continue to climb, there are only two options for most landscape businesses. Firstly, eat the costs yourself. Secondly, pass it onto your customers. Some companies are now increasing their estimates and building charges in for gas. Others are simply biting the bullet. But how about a third option? How about going green? Battery power may be the answer if you are already paying large sums for gas. Using data from your landscape design software, see exactly how much you are spending on fuel. And then compare it to the cost of buying battery-powered equipment. While these green technologies might come with a heavy price tag at first, you will see the savings long-term in not paying for it at the pump.
With more competition comes some landscape businesses that want to be the discount brand. They will offer services for lower prices, while still offering their employees a competitive wage. With start-up costs being low, it’s not difficult for anyone to get into the business of cutting grass or shoveling snow. So, now it has forced many landscape businesses to offer higher quality service and put a greater focus on customer service. Budget companies also don’t invest as heavily in landscape design software, so landscapers are turning to these solutions to offer more quality to customers in designs, estimates and services.
High Overhead Costs
Costs for landscapers continue to increase. There are different insurance costs, the already mentioned fuel costs, compensation costs and just the cost of doing business. These costs can be easily put back onto the customer, but many landscapers are not wanting to put the burden on their customers and risk pricing themselves out of jobs. And if prices do raise, it’s more often just a temporary fix. So, the question becomes, where do you increase costs and when do you absorb the costs. One solution is to really dig into your costs, overhead and expenses and start to budget better. Landscape design software should be able to help you recover the costs that are needed to run a business. And then evenly distribute the costs over all your customers. What you are doing is starting a practice of ensuring your overhead is considered all the time. And then when you are negotiating prices, you are taking it off potential revenues and margins, not the cost of doing business.
Lower Margins On Work
There are many reasons the margins on work being completed is getting lower. We have already talked about plenty of them. Increased competition lowers prices. Expenses, such as gas, are increasing and cutting into profits. And it’s harder to get more skilled workers to increase the work you do. And if your margins are getting slimmer on each job, it’s hard to advance forward. Especially when you need to buy new equipment or start a new crew, the money might not be there.
To increase margins, you can find discount supplies. However, your customers may not like the cheaper alternative. Or you can find better practices to slim costs down. If your designer is using a landscape design software, they are spending less time designing by hand, which lowers the overhead. But you still get a great design and fast estimate for your customers. Finding ways to automate your business will help reduce the overhead that may be crippling your bottom line.
Face concerns with landscape design software
Concerns for landscapers will always pop up. What is a concern today might not be one tomorrow. Or it could be an ever-larger concern for some companies. Gas prices change, fewer people are getting into the landscaping field. It’s harder to build crews and carve out good profit margin. Every concern can’t be solved with a landscape design software, but it can be the foundation in which to battle present and future concerns. As your company grows, you need greater insight into your overhead and budget and how crews are performing. That’s something you can’t get unless you are tracking it. And the way to track it is through a business management software.