Expenses for your small business can be difficult to endure, especially during off-season times. Annually, you should ensure you develop a budget and monitor it to see if you should make any necessary changes. If you are experiencing a low-profit margin, you may be searching for ideas to save or reduce other costs.
Learning how to grow a successful lawn care business can be a challenge. Joe Cheria of Impact Grounds Maintenance says, “As our company has gotten larger, I’ve quickly learned that you have to stay on top of the numbers. Aside from making sure we recover our direct costs, I now watch every overhead line item in our budget. As we grow, I want to make sure each expense stays the same as a percent of sales. Then we’ll be ok.”
Not getting enough cash flow can be a reason why a lawn care business can fail. Here are some tips to reduce your lawn care business expenses:
- Evaluate your current staff. In most cases, you can save money by hiring top employees with an outlook to achieve. There are many people just starting out and have an interest in landscaping or lawn care, so you probably don’t need someone with a college degree. Ensure you hire good employees from the start to keep your turnover low as terminating and continually hiring employees can drive up your expenses. Also, after analyzing your budget, you should only hire someone when you really need them. Employees can be a big percentage of your budget and you don’t want to have to lay them off because you can’t afford them.
- Protect your equipment. Ensure your employees turn in all equipment each day and you develop a check in/out process for all equipment, no matter how small. You need to ensure that each tool is returned, cleaned, and placed back where it belongs to be ready for the next day’s work. Also, before purchasing new equipment, you may want to consider leasing or renting. This may help you determine what features you need in your desired equipment rather than what you may want. Ensure employees log their fuel usage with each vehicle as well. You may find discrepancies in usage and this may help you uncover problems with a vehicle or other issues.
- Protect your brand. Not only should you protect your equipment, you should protect any fertilizers, seeds, or weed preventers as well. These chemicals and products can be stolen or misused as well. If you decide to provide chemical application services, you should make sure employees are using the right amount of chemicals regulated by law. You should have a system in place to ensure all consumable inventory is logged and implement a random checkup system to ensure the right chemicals are used. If you are not using the right amount of chemical, it will hurt your brand and you could eventually be fined or lose your state charter or license if you are required to have one.
- Use a time tracking app. Are your employees clocking in or out on a time clock machine or are they writing down their times? Consider using a mobile time clock app. This will allow you to create work schedules for your employees and assign employees to a specific work site. In addition, your employees can clock in and out from anywhere, the best mobile time clock apps offer GPS verification so you can ensure they are at the job site when they clock in/out. Also, employees can view their schedules on their phones or computer whenever you make changes. One of the biggest problems for industries is workers forget to clock in/out or turn in their timesheets late. By using a precise time tracking app and having the location verification at your fingertips, it’s easy to see which employees consistently are late to work, leave early, or don’t show up at all.
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- Follow your handbook. Ensure you follow your policies that you put in your employee handbook. Monitor overtime and don’t give away vacation days or days off. Research the hours you keep staff. Do you promise them eight hours a day, but only need them six? Do you have busier days which you need staff? What do you do when there is inclement weather and you can’t work outside? Research and identify ways you can utilize your staff when needed, but also show them they are valued and needed.
- Reduce your overhead. Do you provide company cell phones? Are you paying for advertising for which you are not seeing measurable results? Write down a list of all your overhead costs and think deeply of some cost cutting ideas in each of those areas. For example, if you are paying for cell phones for your employees, could you just give them extra money each month so they will use their own cell phones? Is there equipment you are not using? Sell it and cancel the insurance on it. Do you pay for uniforms? What if you got rid of the uniform rental expense and bought everyone several t-shirts with your logo on it? If you are using the same insurance company, do some comparison shopping. You may like your insurance carrier, but you may find cheaper costs elsewhere. Check to see if they will match the prices you found based upon your actual needs. You could be paying for services or benefits you don’t use.
- Evaluate your vendors. If you are using a number of different vendors for varying chemicals or fertilizers, consider limiting your vendors to two or three. They will typically offer discounts for bulk ordering and if you meet a minimum amount of purchase, you may get a discount. Also, if you have been in business for a while you probably know how much you will need to buy during certain months. They may be able to offer discounts during off-peak times or offer other discounts based upon your estimated purchase plans.
- Talk to your employees. Include your employees in your cost saving strategy. They can offer ideas and suggestions where they see opportunities. They are always on the job and many employees see ways to optimize services and cut costs. Offer bonuses for these cost saving initiatives if you implement them.
Once you have implemented the ideas to cut costs, implement some easy ideas to generate more income. Log every expense. Ensure you offer exceptional customer service and your employees are doing the same. Look for opportunities to upsell such as offering discounts on bush trimming and weeding for your regular customers. Evaluate your website, social media, and advertising methods to see where you could do better. If you know your company does a great job, then open yourself up for reviews and ensure your business is on review sites like Angie’s List, Yelp, etc. Be honest and communicate with your customers as well. Customers want to know when you are going to show up and you should communicate with them when you may be delayed. If you offer great customer service, you will get more customers by word of mouth advertising.
Budget analysis and cost cutting can seem like a time-consuming process, but once you implement your systems they should be easy to maintain. Make sure you and your employees log any chemical consumed, fuel purchases are monitored, and your business is running smoothly. As you add more services, ensure you look for additional opportunities to save costs. Invest in good systems like the time tracking app, which will help you reduce other costs and time. Once you have good systems and processes in place, your lawn care business will operate at its optimal level.
Author: Kimberley Kay Travis
Kim Travis, co-owner of Travis and Adams Consulting Group, has over 20 years’ experience in human resources and leadership roles.
She has specialized knowledge in employment law, employee relations, recruiting, management consulting, leadership development, manufacturing safety programs, and writing business articles and blogs.