Lawn care business expenses 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 expenses for your lawn care business as well as how to generate more income:
Evaluate Your Current Staff
In most cases, you can save money by hiring top employees. There are many people just starting in their careers 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. Terminating and continually hiring employees can drive up your lawn care business expenses. Also, after analyzing your budget, you should only hire someone when you need them. Employees can be a big percentage of your budget. You don’t want 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. 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 and Improve Your Brand
Not only should you protect your equipment, but you should protect any fertilizers, seeds, or weed preventers as well. These chemicals and products can be stolen or misused. If you decide to provide chemical application services, employees should use the right amount of chemicals regulated by law.
Considering implementing a system where all consumable inventory is logged. 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.
Evaluate your website, social media strategy, and advertising methods to see where you could do better. Show your work on your website and social media. Also, highlight your employees so people who are looking for a landscape company can view your employee’s achievements as well.
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 landscape management app like ezClocker. This will allow you to create work schedules for your employees and assign employees to a specific worksite.
In addition, your employees can clock in and out from anywhere, the best 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 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.
Learning how to grow a successful lawn care business can be a challenge. When Pete Ciotti sold his nightclub and started a landscaping business, he went from using a point-of-sale system for recording his employee’s hours to writing them down on paper. This allowed mistakes to occur. Pete now uses ezClocker to manage his employee’s time. Before using ezClocker, Pete was spending up to an hour each pay period during payroll. Now he can send his accountant the timekeeping data quickly.
Need an Affordable Mobile Time Tracking App for Your Employees?
Follow Your Handbook and Policies
Ensure you follow the policies that you put in your employee handbook. 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.
Follow Local, State, and Federal Laws
In the past several years, local, state, and federal laws have changed. Employee friendly laws have passed such as minimum wage, sick and family leave, break and rest times, and overtime.
The new overtime laws that went into effect January 1, 2020, require you to pay overtime to anyone who makes less than $684 a week regardless of their job title. States such as California have stricter guidelines for pay. Some states have daily laws for working over eight hours a day. Some states have laws for working over ten or twelve hours a day.
When an employer doesn’t keep their own records, the employee can show their proof. If you aren’t keeping good records, you may be paying backpay later. Using a mobile time tracking app like ezClocker can help you track your employees’ hours and reports any overtime when it is time to run payroll.
Reduce Your Overhead
Consider reducing your overhead costs. 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. If you can’t reduce costs now, think about implementing annual or semi-annual goals to help reduce costs.
For example, if you are paying for cell phones for your employees, could you find a better plan? Do you have some 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 them? If you are using the same insurance company, do some comparison shopping. You could be paying for services or benefits you don’t use.
Evaluate Your Vendors
If you are using different vendors for varying chemicals or fertilizers, consider limiting your vendors to two or three. They will typically offer discounts for bulk ordering. If you meet a minimum amount of purchase, you may get a discount. You probably know how much you will need to buy during certain months. Vendors 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.
Generate More Income
Once you have implemented the ideas to cut costs, implement some easy ideas to generate more income. Log every expense. Look for opportunities to upsell such as offering discounts on bush trimming and weeding for your regular customers. 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.
Improve Your Customer Service
Now more than ever, good customer service is essential to a company’s growth. Providing a great customer experience will take your business to the next level. Your business should show excellent customer service on all landscaping needs. When you provide that excellent service, you will get more clients.
If you or your employees don’t show up on time or don’t communicate well with your clients, it will be a matter of time before your business is replaced. Mistakes happen but once you are listening to a customer complaint and fixing it, they become more loyal. By not getting upset and responding professionally to their issues, they are more likely to recommend you to others.
By identifying issues that could or have occurred, implement written best practices and policies to prevent further problems down the road.
Conclusion
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 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. Improve your customer’s experience with your company. Invest in good systems like the time tracking app, which will help you reduce other costs and time. It can help you stay in compliance with wage and timekeeping laws. Once you have good systems and processes in place to reduce your lawn care business expenses, your business will operate at its optimal level.
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