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realhuntin
12-14-2007, 02:48 AM
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Ok it time to start the year end horror. Perpairing for the next year supplies and materials. This can be good if done properly.

Do you track materials you purchase throughout the season such as mulch or fertilizer?

If not, you should, and heres why.

In order for you to grow your business you must set relistic goals and here is how you can acheive those goals.

If your not tracking how much product you purchase how are you to know how much or how little to buy for the next season?

If you do know your one step ahead and then you should set a goal and perpare for it. This means what you bought in product last season you should increase 20-30% each year until you reach your customer base goal.

Knowing how much materials used on a job/customer will help you for the next season, making you more efficent and raising profit margins. Growing you business.

Setting goals gives you the incentive to attract more customers. Be relistic when setting these goals, some call it baby steps I call it setting a customer percentage increase.(CPI).

With out tracking how are you to know if your growing or not. Most that do not track will never make it in business. 80% will fail in the first 3 years of business.

I track everything, fuel, cell phones, mulch, ferts, weed control, right down to the pants we purchased. I can tell you how many 'Moon Shadows" we bought last year and these are our trade mark plant. Total 46. I can tell you how much we spent on pavers and wall block on each job. This come from job costing or known as tracking.

Why is this so important, well lets say First it is profitable when taking your books to the accountant, because if he/she has a shoe box full of recepts and has to go through them to sort it all out just to do your taxes, you just lost money because their going to charge you for the extra time it took them to figure out what is what.

Second, again how are you going to be profitable in not knowing how much material you used and cost of it, and how are you going to set your CPI to that service.

Even more important you fine extra money in the bank and you think wow we are doin great, think I can afford that new Z turn or that new mini skid-steer I was wantin, so off to the bank you go and the firat thing the loan officer ask is I need 2 years of tax returns and a P & L. Opps you didn't track or do proper basic bookkeeping and now your P & L looks like, well I don't have to say it. So now your back looking at them saying well this is what I came up with on the P & L, heres the total amount of jobs we did and heres where we paid all our bills and heres what we got in the account so I guess this is my profit. This might work but I personally don't care for a might, I more of a yes/no, right/wrong type of person, no grey don't have room for it.

When your persenting yourself at the bank as a business owner you should at the very least appear to be professional and have proper basic accounting practices. This means just because they have known you at the bank for some time dosn't mean they know what kind of business person you are when it come to handling business finances. Saying it and doing it is two different things. You'll find most bankers are like Missiouri, the "Show Me" state.

Bottom line is proper accounting practices and keeping up to date with them will make you more efficent and profitable for time spent. If your spending 3-4-5 hours a day just doing paper work and trying to catch up on the accounting then you need to work on time management. Proper time management can be benifical to everyone espcially the family. Set a time schedule and stick to it. I set one of 8am-6pm M-F and Every other Sat 8am-noon after that I don't work on business stuff. *Time Managment will be another post.

If you lack the accounting skills to be proficient then check with your local Library for fee computer classes in accounting.

Steve
12-14-2007, 03:20 AM
Great post Tim!

Quote[/b] ]
Posted: Dec. 14 2007,3:48 EDIT QUOTE
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Ok it time to start the year end horror. Perpairing for the next year supplies and materials. This can be good if done properly.

Do you track materials you purchase throughout the season such as mulch or fertilizer?

If not, you should, and heres why.

In order for you to grow your business you must set relistic goals and here is how you can acheive those goals.

If your not tracking how much product you purchase how are you to know how much or how little to buy for the next season?

If you do know your one step ahead and then you should set a goal and perpare for it. This means what you bought in product last season you should increase 20-30% each year until you reach your customer base goal.

How would you suggest an entrepreneur come up with a customer base goal?

realhuntin
12-14-2007, 03:52 AM
Quote[/b] (Team Gopher @ Dec. 14 2007,4:20)]How would you suggest an entrepreneur come up with a customer base goal?
Good Question Steve,

Well they need to start with time managment, (very important) how many customers can they handle in a normal work week, and how eager they are, after they have the first season under their belt then they can analyze how much more they can handle, how fast they want to grow, depends on the individual, like with me if I was to just do cutting and basic lite-landscaping I wouldn't want more than 30-40 full time customers. This would leave me time to do mulch and other service for those customers and still have personal time. This would be ample customer base for a 1 man business. If the one man show started with 15 full time customers the next season he should set his goal to add at least 5 more full timers for the next season.

Steve
12-14-2007, 03:57 AM
How many customers should a lawn care operator then shoot for if they want to take on an employee? What kind of range would you suggest?

realhuntin
12-14-2007, 04:08 AM
Quote[/b] (Team Gopher @ Dec. 14 2007,4:57)]How many customers should a lawn care operator then shoot for if they want to take on an employee? What kind of range would you suggest?
My trade buddy has 135 customers (comm-resi) and has 2-3 man crew so counting him there is normally 4 men. they stay hoppin' he actully called me to do some mulch jobs for him.

I wouldnt do more than 35-40 per one man crews= 2 man crew 90-100 customers if they are balanced comm-resi. if most of the business is comm or industral I would say it would be less because of the time constrants to complete larger properties and services offered. In the winter months if there isnt any plowing going on he keeps them busy scraping or doing odd jobs.

ritchiem
12-14-2007, 08:52 AM
Great article Tim, thanks for letting The Lawn Blog (http://thelawnblog.com) post it!