On average, landscape companies are performing better than expected, but there are caveats and exceptions to watch out for.
We meet with all our peer group members midyear. We want to see how everyone is doing, and we want to help everyone gear up for a strong Q3 and beyond.
From these meetings, I culled numbers from a sampling of 45 of our members. Here is what we learned,
Revenue compared to budget
On average, these 45 companies are beating revenue budgets by almost 1%. That’s good.
When we break down the numbers, we see a more nuanced outlook
- 55% of these companies are ahead of budget,
- 45% are behind budget.
Note: The top firm in this sampling is beating its budget by 50%.
Overall, I am proud to see such competence with monthly and annual budgeting, and the ability to hit budgets. This is key to financial success..
Revenue compared to last year
We found that 85% of these companies are doing better than last year, and only 15% are doing worse (from an earned revenue point of view). That’s encouraging.
For the whole group, revenues have increased on average by 23% over last year (with the top firm enjoying a whopping 91% increase!)
That double-digit growth is excellent given the tentative nature of this year’s economic news.
PROFIT (NET TO OWNER)
First let’s define terms:.
Definition of Net To Owner: We look at profit combined with owner’s salary, to even out how owners may be pulling their income from profits vs payroll.
Profits compared to budget
Over half (25) of the companies surveyed are ahead of their profit budgets.
“On average” the group of 45 companies are beating their profit budgets by 70%.
This large bump is due in part to conservative budgeting by some, and it’s also due to a couple outlier companies that are doing exceptionally well.
Profits compared to last year
The group average shows an overall 20% profit improvement over last year. That is strong!
As we dive into the numbers, we see that 64% of the companies are enjoying more profits compared to last year. While 36% are equal to or behind last year’s numbers.
Sales and Marketing
We are hearing a mixed bag when it comes to typical job sizes & lead flow.
Some are reporting strong lead volume and sales, others are reporting lags.
On average, leads seem to be less strong than just a couple years ago, but still strong compared with the pre-pandemic years.
Backlogs seem to be shrinking, although some are booking deep into 2024. Others report a 1-3 month backlog.
As you can see, it’s a mixed bag, with a current undertone of caution in parts of the country. When in doubt, talk to planners and builders, they can see the future.
Your Challenge – Finishing The Year Strong
Half the battle is starting the year strong. But the past is the past.
Now you have to finish strong.
- Ensure your proposals are reflecting actual cost of goods.
- Track revenue vs expenses accurately (“as earned”, not “invoiced”)
- Share monthly results with the team so everyone can be part of achieving a strong Q3 and Q4.
Increasing motivation: The biggest motivation you can supply your team is “information”.
The more you remove uncertainty and empower them with information to make decisions, the more motivated they will be!
Beyond that, continue to watch all costs as they fluctuate the rest of the year. Look also at overhead expenses, they can be sneaky.
If you have a unique mid year strategy, I would like to hear from you. What’s your plan?
Go get em!
P.S. If you are considering joining our high impact peer groups, you can apply here and we can discuss how we can help you achieve your goals. No strings attached.