It’s often said around the landscape industry that if you can’t measure something, you can’t improve it. There are plenty of variations around this saying, but the message is loud and clear. If you can’t gather information to see why something is happening, how can you actually improve it? How do you know things are actually going wrong in the first place?
Collecting data might be a very new-school idea to some old-school landscapers who are still collecting receipts in shoe boxes, but in today’s business environment, digging into your business is the only way to actually improve it. If you don’t have a system in place to collect that information, like a landscape business management software, how do you analyze that data?
Here are just a few of the things you should be measuring in the landscape maintenance and/or design/build businesses. You might be tracking them at a very high level, but the more you dig into them, the more you’re able to make decisions that will improve your business long-term.
Wins and losses
At a very basic level, most landscape design businesses can tell you how many deals they’ve won and lost. More often than not, they can tell you the wins over the losses, but there’s so much information packed into those wins and losses that’s worth tracking so you can improve business, especially from the losses. That’s because not all losses are the same; some are due to the price you quoted, or the time in which it took you to return a design. Some could even be chalked up to a certain salesperson, but you wouldn’t know any of this unless you started to track that kind of data.
There are always reasons why you won a deal and why you lost a deal. It’s not a black and white scenario. Using landscape business management software will help you track the entire lifecycle of your sales. Know exactly where deals are falling off and why you lost them. Then start to make adjustments to your business so those losses move over to becoming wins.
The smallest decisions can add up over time and that couldn’t be truer for equipment costs. There are the obvious expenses like gas for trucks, but what about rental equipment that you use or things like dumpsters? Is it worth renting a dumpster to your site, or should you just be making runs to the landfill? Or is a central dumpster at your back office enough to house all the waste that needs be hauled away.
Landscape business management software can help you track all the expenses you regularly incur and helps you decide what is right for your business. If you’re spending more per year renting a piece of equipment than it would cost to buy it outright, that’s long-term savings for a short-term hit to the bank account, but if you’re not tracking all your expenses, you wouldn’t know how much money you’re actually spending. Tracking doesn’t just mean handing your accountant all the receipts – the business owner needs a clear view of what they are spending each month and on each job.
Regardless if you sell 10 jobs a year or 30 jobs a year, your overhead costs remain the same. You still need to pay for the phone lines, the office space, the estimators, the bills of your business. Tracking all of those is something every good business owner does, but do they relate it back to the jobs they are completing? Are you properly tracking the expenses and budgeting them against each of your projects? Overhead should be recovered off the top of every deal you complete. The rest is markup and margins which can be adjusted, based on what you feel the customer pays for, but if you don’t track all of your overhead expenses, how would you know how much you need to make per job to recover it all?
The last thing you want to do is just break even on a job. Sure, everyone got paid their wage and your expenses were covered, but you can’t scale your business or grow without additional revenue. Sadly, breaking even is perfectly fine with smaller companies whose owner is in the field working, but to scale a business properly, you need to track all of your expenses and put them against a job. Landscape business management software has that built into your estimating system so that you can ensure each job is covering its share of the overhead costs.
Always Be Measuring
If you can’t measure it, you can’t improve it. If you can’t improve it, your business might not succeed long-term. Too many mistakes can be very costly and lead to even more lost business. Define what type of business you are going to be by using landscape business management software. Either be one that doesn’t measure every thing they do, or be the one that does and continues to make the best decisions possible with the best available data.