How landscaping business owners can solve budgeting issues quickly
It’s no surprise that landscaping companies saw record growth in 2020. While social distancing and protection as a nation was on hand, home improvement projects became a mainstay – and that makes sense. With more time and the lack of scene change, people needed something new to look at. Across the board, we have seen a huge increase in the number of people choosing to get the most out of their yards.
With that in mind, now is the time for landscaping companies to invest in technology that will help them grow their businesses and bottom line. With the right software tools, accounting and budgeting become strengths rather than liabilities.
Of course, budgeting is notoriously difficult in the green industry. Work is seasonal, demand can be unpredictable and staffing is dynamic. All of these things make financing – especially through traditional bank loans – difficult to secure. Add in the competitive nature of outdoor home services and having money when it is needed most is becoming a constant concern, especially for small and medium-sized businesses.
Fortunately, there are options. These options include government support and dedicated Lending for small businesses, but more importantly, there are also improved business processes that take the guesswork out of cost control. While an injection of cash can be of great help, it is nowhere near as valuable as implementing a long-term budgeting solution.
A better approach has to be based on accuracy. However, “improved processes” doesn’t mean spending more hours reviewing time cards or staring at spreadsheets. More work is the last thing most business owners have time to do. To understand how software can be an effective (and simple) solution, let’s take a look at the problems it faces.
The profitability of a project depends on the initial offer. If you bid too much, you will lose the customer. Don’t bid enough and you will eat the difference. When aggressive competition lowers the bids, it becomes even more difficult. What is needed is clear data on the cost of a job. Managers should ask themselves a number of questions when bidding on projects. For example, how long exactly does it take to complete certain gardening and landscaping tasks? Does it differ from one employee to the next? It’s one thing to be “fairly sure” about the answers to questions like this, but it’s another thing to have hard data. When a bid is based on hard data, a profitable bid can be separated from a loss.
There are two major challenges to the accuracy of payroll accounting. One is the distributed nature of work. How do you keep track of what employees are doing on numerous construction sites at the same time? Given the sheer number of locations your team is spread out throughout the day, this task can feel daunting. It’s not that you should expect them to be dishonest, but if you use old school methods like paper time cards or text messaging, inconsistencies can arise.
The other big hurdle is seasonality. Most of the crews need to add to their ranks 1099 employees during the busy times of the year in spring and summer – and they often make spontaneous personnel decisions due to weather changes. These things make payroll much more of a challenge than for companies that pay a set number of employees the same amount of money every week or month.
Having access to real-time cost data as opposed to days or weeks after is absolutely critical. Unfortunately, most companies only have the latter because they get stuck with analog methods. Imagine your team has 75% of the budget but only 50% of the work required. Obviously, a re-evaluation is needed to make sure you are profitable.
By the time they take a close look at the numbers, the ability to reallocate or renegotiate resources is gone if they use analogous methods. Effective cost control puts owners in the driver’s seat with data on what is happening.
How technology solves these problems
The right software can handle these challenges. Nowadays there are some specialized mobile apps that do time and place tracking and then feed that data into payroll systems. This time data is also used to provide quick and accurate real-time views of the labor costs for each project.
There are a few things to consider when choosing between possible solutions. For example, what is the ease of use factor? Was it made for the end user? The design should be simple and intuitive – not full of small texts and endless options.
For business owners grappling with the budgeting issues outlined above, now is the perfect time to embrace tech-assisted cost control. While most sectors in 2020 due to COVID-19, landscaping and Lawn care has moved in the opposite direction and continued growth is expected. Making the most of it starts with leaving old problems in the dust. The grass on the other hand is really greener.