Tag Archives: Income

Man walking in a lane with the sunlight breaking through the trees.

CRISIS RESOURCE PAGE: Responding to COVID-19 for the Lawn and Landscape Industry

SMART BUSINESS RESPONSES TO COVID-19

During a crisis, smart lawn and landscape owners are looking for practical strategies and solutions they can implement in their business rapidly. You want to act fast.

Consider this your crisis resource center where you will find links to basic and advanced business resources that will help you during the COVID-19 crisis.

You’ll find a select list of videos, white papers, podcasts and other publications that are suitable for lawn and landscape business owners.  We’ve created a special link to make it easy for you to come back to this resource page as it will be updated regularly. That link is JeffreyScott.biz/crisis.

To receive immediate updates directly to your inbox, you can subscribe to my weekly newsletter by clicking here.

CRISIS RESOURCES:

READ: How to Respond to COVID-19 as a Business Owner: Landscape Business Owners – Now is the time to prepare and be the first to move on opportunities in your industry during COVID-19. Click to discover 10 ideas to help you.

VIDEO: Responding to COVID-19 for Landscape, Lawn Care, Irrigation and Tree Care Business Owners : Here are 10 crucial responses for you to take, to protect your company and your employee’s jobs due to COVID-19.

RESOURCE: Build Your Resilience in the Face of a Crisis from Harvard Business Review: Things you can do to protect your mental state during crisis.

RESOURCE: U.S. Small Business Administration Website & Disaster Loan Assistance Site: Keep updated on resources that can financially help your business during COVID-19.

RESOURCE: Resources to Help Your Small Business Survive the Coronavirus from US Chamber of Commerce: Five resources that can help you mitigate the financial impact of COVID-19.

READ: Productivity Tips: Working From Home: Tips to work hard from home and still separate work life and home life.

VIDEO: Crisis Leadership Strategies For Landscape Companies: Here are 10 clear strategies to engage and inspire your team to help your company survive, thrive and kick butt in 2020 and beyond.

VIDEO: Words of Hope: In these difficult times, here are words of hope for owners and employees of lawn and landscape companies.

RESOURCE: Relief Funds (National and Regional Ones): Comprehensive, searchable database for businesses to find assistance in this crisis.

RESOURCE: 5 Ways to Stimulate Cash Flow in a Downturn, by Harvard Business Review: Tips to keep ensure the economics of your business remain sound.

VIDEO: Economic Predictions – How To Be Ready For The Upswing: Landscape and lawn professionals should get prepared now for the upswing.

VIDEO: High Stakes Leadership: The NBA commissioner made a courageous move that many sport organizations followed and every lawn and landscape business owner should follow and use, not just now but during any difficult decision-making process.

VIDEO: 10 Proven Ways To Grow Sales Now: Every lawn and landscape company has a sales and marketing culture; and the question is how strong is yours? Use this inspiring video check list to see where you can make immediate improvements in your sales right now, in this economy.

man look at himself in the mirror

Self Awareness is the Silver Bullet to Professional Growth

A few weeks back I gave a lecture to a packed room at the Green Industry Expo in Louisville on the topic of “Benchmarking for Profit”.

The audience learned my seven key performance indicators that you must benchmark (measure and manage) in order to improve your company’s performance.

Some of the benchmarks were as expected, such as labor, and some required outside-the-box thinking.

Then, I ended the talk with a big surprise…

I shared how you can benchmark your self-awareness (!), and why self-awareness is the single most important indicator of your future success.

Here is what the audience learned…

Self-awareness is rarely discussed in business circles, and yet it tells you everything about your future.

Alan Stein, the author of Raise Your Game, agrees with me on this.

In his excellent book, he tells the story of a young basketball player and how he could predict the player’s future success on the court based on his level of self-awareness off the court. This young basketball player chose to play for a high school team that would focus on improving his weaknesses, and ignore the hype surrounding his talent.

Stein (who has coached 100s of stars) says self-awareness is the single most critical characteristic of high performing athletes. It’s what gets them to the top of their field, and keeps them there every day.

How strong is your self-awareness? And how can you improve it?

As I write this, I’m visiting with an award-winning landscape company in Asheville, NC. They have invited me in to guide the owner and his team to grow from good to great…to extraordinary. I laid out the strategies to fast forward their success and domination of the Asheville market. But it still requires the owner and his team to be open to hearing my direct feedback, and then be willing to act on it.

With high levels of self-awareness, the owner and his team will easily surpass the extraordinary goals they have set!

How about you?

Your Challenge: Try this simple exercise in order to benchmark your self-awareness.

  1. Meet with your leadership team, and ask each person to rate themselves and each other on the following question: “Are you an intimidating leader or an approachable leader?”
  2. Score yourself first, on a scale of 1 to 5. The lowest score (1) means you are a very intimidating leader, and 5 means you are a very approachable leader. And the scores of 2-4 means you are ‘in-between’. You get the point.
  3. And then score everyone else on your team. And then…
  4. Share your scores with each other. And then…
  5. Go around the table and, one at a time, discuss your personal score vs. how others scored you. How similar were these scores? How clearly do you see yourself vs. how others see you?

The scores are not the main point. The ensuing discussion (around your perception of yourself and other people’s perception of you) is what will have the biggest impact. It will raise your self-awareness and that of your team.

Plus, it will foster an open and honest dialogue within your leadership team. And that’s priceless!

boat on open water by an island

20 Hour Work Week Challenge

Do you work full time, or are you able to take time off –– and diversify your interests?

I am currently working with a seasoned but young business owner who has moved his family overseas to live in the promised land. I am coaching his GM and working with his team; he works an hour a week.

What would you do if you had an extra 10, 20 or even 30 hours free each week? How would you spend it? Continue reading 20 Hour Work Week Challenge

Raising Owner’s Income: How Much Is in Your Wallet?

Owners of contracting firms earn on average 8 percent Net to Owner; but above average entrepreneurs earn 16 percent Net to Owner and the top 10% of our industry earn considerably more. How much is in your wallet?

Many owners focus on building their revenues as a way to build their wealth. While there can be a correlation, it is not a direct one. In order to make a good return on your investment and earn an above-average income (16+ percent), it is critical to focus on the bottom line as your goal and work backwards.

This article was first published in Landscape Management magazine. Its concepts are key to your success. Read on for specific how-tos:

One Contractor’s Profitable Journey

For five years, I worked with a company where the owner initially thought he wanted to build a large company with four division managers and all the trappings. You read many stories of owners building large successful companies, and this was also his goal when he first hired me to consult with him. After a few pointed discussions and many months of failing to make his managers earn their keep, he was forced to clarify his objective from revenue growth, to personal income growth. He stopped dreaming of building a big company and shifted his goal to increasing his earnings (net-to-owner) to $350,000 and reducing the amount of his time at work to less than four days so he could focus on other business opportunities.

He restructured his company:

  • Fewer Services: He streamlined his service offering by removing types of work that were “one off” or difficult for him to make a consistent profit on. For him, this meant eliminating hardscape projects and jobs over $10,000, and shifting focus to recurring maintenance packages. Many readers may think about doing the opposite, removing jobs under $10,000; you need to decide what is right for you. (What would you remove from your service line?)
  • Sweet Spot: He fine-tuned his client type. Initially, he was trying to be a high-end company but realized his bread and butter was in the middle market. (How focused is your firm on its sweet spot?)
  • Right-Sized Overhead: He slashed overhead by going from four division managers to a single manager who oversaw production. (Is your overhead optimized for your revenue?)
  • Pay rewards: He put incentives in place. He promoted self-management and high profit following Jack Stack’s concept called “The Great Game of Business.” (Does your firm give employees bonuses for the right results?)

This contractor met his goals, earning the income he wanted while dropping his time at work to under four days a week. What are your goals for personal income and time spent at work?

Are you earning 8 percent or 16 percent?

Two years ago, I undertook a study with all my clients and found that within this group the average company earned 8 percent net-to-owner. The top 25 percent of the companies sampled earned 16 percent net-to-owner (with some niches earning 18 percent), and the top 10 percent earned much more.

Net-to-owner is defined as Owner’s salary + Net profit (calculated on an accrual basis!) after straight-line depreciation but not including the costs of owners’ perks, which vary from company to company and are sometimes quite large.

Keep in mind these are averages. Some contractors are earning less, and some are earning much more. My question for you is where are you now, and where do you want to be?

The fallacy of 10 percent. Growing up in the industry, I would hear presumed experts claim that you should earn 10 percent. I find this target to be dull and misleading. Where did this number come from, and was it meant to be a standard or a minimum goal? Why not earn more than 10 percent? The problem with setting low goals is that you may hit them, and then lose focus!

Set a dollars-based goal. In order to raise the personal income, set yourself a dollars-based goal and work backwards. This can be accomplished by making some basic tweaks in service lines, pricing model, personal time management, and determining how the owner and the management team view the financial success of each profit center. Are you including your team in your financial planning? Are their goals high enough?

Putting earnings “into” your wallet 

Have you ever wondered why your profit and loss (P&L) statement indicates that you are earning good profits, but by the end of the year, you are not able to take that money out of your business and put it into your wallet? This is a common problem, and following are six missteps that can cause this:

  1. You are running your budget on a cash basis, and you are not budgeting enough for equipment depreciation, and thus, profit.
  2. Your receivables are too high; too many clients owe you too much money.
  3. Your contracts are written in such a way that you are financing your clients’ purchase of your products and services. You have become their bank.
  4. Your accounts payable is not up to date, so your net profit is not accurate.
  5. You are not taking out enough personal income each month and you are waiting for the end of the year, hoping you have enough left.
  6. Your equipment has too many breakdowns and related management costs, and it is sucking the profits from your business.

Year-end investments can hurt your wallet

When I build a new relationship with a contractor, a common theme I hear is the (bad) advice they are getting from their accountants. Accountants often call up their clients at year-end and tell them “You are going to make too much money: you may want to buy some equipment.” This approach is flawed for four reasons:

  1. Your accountant is inadvertently promoting the over investment in equipment, which takes additional time and money to maintain, pay for and manage. This reduces future profit and also reduces the value of your business by reducing your “return on assets.”
  2. This shifts your focus from making investments throughout the year, when they might be needed, to the end of the year when you may have missed a window of opportunity.
  3. It shifts your focus from investing in people or training, to buying equipment. You need a balanced approach.
  4. It reduces your personal income, resulting in less in your wallet.

Raise your company value. The higher your net-to-owner income, the higher the valuation of your business will be when it is time to sell. If you want to put more in your wallet and/or the wallets of your employees, then do the following:

  • Start by setting an earnings goal.
  • Look for both “time” and “cost” savings.
  • Benchmark yourself, division by division, against your own results and against the top 25 percent (high-profit) companies.

Focus on raising your net-to-owner income, and you, your employees and company will win.