The Landscape of Landscaping is Changing
With a revival in spending on home improvements, landscaping services has increased as more homeowners are taking on lawn and garden projects. According to IBIS World’s 2018 Landscaping Service Industry Report, annual revenue has grown to $93 billion, the industry employs over a million people and represents over 513,000 businesses.
Confidence in the industry continues to grow as more and more businesses start to enter the landscaping field. According to Lawn and Landscape Magazine’s 2018 State of the Industry report, the median revenue landscaping services company produced was $287,000 in 2017, while the average landscaping company produced $1.1 million in revenue that same year.
So, the question for growing landscape design businesses becomes, how do you scale up your landscaping business? Growth is achieved through many ways, but often landscape business struggle to push themselves over that next ceiling line due to many different factors including:
• Lack of budgeting
• A weak sales funnel
• Outdated data
• Poor time management
Knowing Your Expenses, Costs and Overhead
Every business comes with some form of overhead. Whether it is rent, salaries, office expenses, utilities, insurance or supplies, you need to keep these costs in mind when preparing bids and estimates, because you must recoup that money from somewhere. In landscaping, there are plenty of people who are not part of the actual construction of a project, but yet are vital to the success of the business. Think about your sales people, estimators, your designers, and the office staff you have answering phone calls and preparing invoices. Very few companies think about the overhead costs, and it can drastically affect your business.
To scale up your landscaping services, you need to be thinking of these costs. Nearly 20% of landscaping sales is eaten up by overhead costs. Smaller companies with one crew and a few workers, which may include the owner working in the field, may not be thinking of overhead expenses. But when you start adding more crews, an office and pull yourself out of the field, you have to be asking the question, how is your salary going to be paid? Knowing your fixed and variable overhead costs can have a massive impact on a business. Is it more expensive to make trips to the dump for every project or just have a dumpster on site? Should you lease a new truck for construction or buy a used one? You need to understand all of these costs and how much they add up each day, week, month and year.
Where DynaSCAPE Helps
Knowing where your overhead is coming from is vital to any future success. Managing that overhead and putting the cost of it back into the projects and maintenance you complete is something successful landscaping businesses do to ensure they aren’t short-changing themselves on every job.
With DynaSCAPE’s landscape business management software, you can incorporate budgeting into every job, have it completed automatically and applied to each estimate. Use any overhead recovery model that works for your business and figure out what your break-even point really is on each project. It’s not just the materials and labor hours, but a percentage of the overhead expenses your business has to pay.
By knowing what your break-even point and net-profit is on each job, you can begin to negotiate lower rates for jobs if needed, but still remain in a positive revenue-generating position.
Funnel Your Sales Opportunities
Growth in landscaping services requires more sales opportunities and in sales, you win some and you lose some. The key is to learn why you lost and at what stage of the process so you can track your outcomes. Did your customers not like your designs? Were your estimates too high? Did you not respond fast enough? There are many different reasons at different phases where a sale can go wrong. Plus, coupled with your overhead expenses, you need to project how many sales opportunities you need in order to be successful. How many construction projects do you need to take on in a year to go to the next level of your business? And how many prospective sales calls do you need to make, or how many designs do you need to do in order to get that number of people. In essence, it’s budgeting your revenue and tracking how to get to that revenue line you have set for yourself.
Where DynaSCAPE Helps
Managing a sales pipeline in a growing business can be challenging, but it’s important to be able to identify your best sales opportunities and track the progression of them through each phase of the cycle. With DynaSCAPE’s Manage360, have a firm handle on your sales opportunities and funnel them into successful bids. Set start and due dates for each phase and identify leads that may be stagnant that you need to reach out to again.
Go from start to finish with customers from initial contact, all the way through to the final invoice. Start to track your wins and losses to identify where customers are dropping out, but also where you are getting the most success. With Manage360, supercharge your sales opportunities and never lose sight of where you are with potential customers.
Want to find out how DynaSCAPE can help to boost your landscape business?
Go with Data, Not Your Gut
Decisions in landscaping should come from the real facts and figures; they shouldn’t be coming from a gut feeling. The most successful landscaping businesses are turning to data analytics to help them make decisions about their business. You may have years of experience in the field and have an idea of how things are going, but without the supporting data, you’re still grasping at straws.
Analytics will be able to look at what jobs are most profitable and which crew is bringing in the most revenue. You will be able to track the revenue you have coming in each day, and how much revenue you will have coming in in the future. If you want to push beyond the new ceiling of your business, knowing the revenue you earned last year, or how much you earned from the job you performed today isn’t enough to continue your growth. You need to be aware of where your revenue is coming from tomorrow and beyond, so you can continue to make decisions that drive profits towards that ceiling. It also comes down to the types of supplies you have, whether you rent or buy equipment in order to lower overhead costs, and deciding which crew to put on which job, based on past performance. Without those types of analytics, you are moving blindly forward on intuition and not facts and figures.
Where DynaSCAPE Helps
Better Time Management
Landscape designing is a large undertaking, providing your customers with drawings of their planned landscape with a fully costed out estimate for the number of hours it will take to complete, as well as the cost of materials. Unfortunately, manual practices of designing are slow and very labor-intensive. Drawing by hand takes time. Coloring and shading take more time. And all of those hours by your designer is overhead you have to cover later out of the project’s revenue. It’s a necessary part of any landscape project, but the complexity of the job can add additional variable costs into your plan that you weren’t expecting.
Where DynaSCAPE Helps
Break Through the Ceiling with DynaSCAPE Software
In order to reach that next landscape ceiling, you need to change the practices and processes of your business to better align with being that successful of a business. Manual work that can be solved by automation saves dollars. Longer hours don’t always equal success in added revenue. In order to compete with the growing and competitive field of landscape design, you need to build your business on a foundation of efficiency and information. That can be achieved by using landscape design and business management software from DynaSCAPE, which can help you to not only reach that ceiling, but break through it.