Tag Archives: Leadership

hand with coin and plant growing putting coins to stacking for money saving profit and business investment growth concept.

5 Levels of Financial Management: Terrible, Poor, Good, Better, and Best!

There are five levels of financial management in the landscape industry. They range from TerriblePoorGoodBetter to Best.

Where does your company operate financially?

The following framework will help you identify where your company stands from a financial management perspective and where you can improve. 

Read through these five Levels of Financial Management and get clarity on your next steps:

Level 1: Terrible

Companies that do only a year-end review of their numbers are greatly underperforming. This is a Terrible way to manage your business because you are in effect not managing by your numbers at all. Most companies who operate this way are simply so deep in the weeds of their day-to-day operations that they don’t take time to budget, monitor, and course-correct, which costs them double-digit points of profit. They follow the “wing and a prayer” method, which usually doesn’t keep you aloft.

Level 2: Poor

Companies that do a quarterly review of their P&L and Balance Sheet are doing better than Level 1, but it still qualifies as Poor because they leave so much to chance. For example, your company can go off track in July, and you will not find out till October. Companies like this often rely upon outside accounting services to pull this together. If that is you, then upgrade your investment to get monthly reporting, or better yet, take this critical role in-house.

Level 3: Good

Companies that do a formal monthly review of their P&L are doing better than so many unprofessional competitors out there. This is a Good level, but to truly benefit from his, you must make sure you are comparing monthly actuals to a monthly budget. This allows you to do the double comparison of actual v.s. budget, and actual v.s. last year. Once you create budgets, you can implement a Rolling Budget and use this to both steer your performance and teach your finances to your team.

Level 4: Better

Companies that do a monthly review of their divisional numbers, and a weekly review of operational metrics, are doing better than most all landscape firms – professional or not. Managing with divisional numbers (monthly v.s. actual) allows you to empower your managers to run and own their divisions. Using weekly reports (with daily check-ins) allows your production teams to take ownership and steer their own results. This Better level of financial management allows a business to really scale and frees up the owner to be more proactive and entrepreneurial in leadership. 

Level 5: Best

Companies that tie their budgets, commissions, and incentives to a high-profit goal are achieving the highest level of profit by not leaving extra monies on the table. This is the Best way to manage because it gives you the consistency and empowerment of Level 4, with the winning strategy of having company goals dialed in to achieve breakthrough results. (20% net profit and above for residential work, and 15% net profit and above, for commercial). Surprisingly, many companies hit level 4 and think they have hit the top, but they still leave a lot of money on the table. 

Here are a few questions to consider as you assess your next steps: 

  • Which of these levels do you operate at?
  • How well does your team understand and support your financial goals?
  • What do you need to do to get to the next level?

Because so many issues that you face are ultimately tied back to proper financial management, I recently created a Financial Masterclass. You can learn how to master your numbers and implement the tricks and strategies needed to operate at Level 5, where the most profitable landscape firms operate. Check it out here.

Your Challenge:

The challenge of improving your financial management is four-fold:

  1. Make this a priority.
  2. Get the systems in place to operate at Level 4.
  3. Implement the strategies to then raise you to Level 5.
  4. Get the buy-in of your team to achieve this high level of performance. 

You can’t do this alone; you need your team to support these efforts.

For those of you who want to improve your financial decision-making and actual financial performance, register for the Financial Masterclass now, while the early bird pricing is still valid. 

It is a one-of-a-kind event that has never been offered before in our industry. Have your second-in-commands attend as well if you want to improve their buy-in and financial literacy. 

According to Kevin McHale, owner of McHale Landscape Design in MD, “Don’t miss this exceptional event run by one of our industry’s most insightful leaders, Jeffrey Scott. He provides an honest and clear path to understanding the financial and management components of the Landscape Industry.”

Dramatically Change Your Company Culture in Just One Week

What if you could dramatically change your company culture in just one week?

In a way that would foster deep leadership buy-in, sharpened leadership focus, and surging employee morale?

It may sound like pixie dust, but I have seen it happen over and over.

This is not meant to be a brag, but rather to show you what’s actually possible in your company.

Last week, Wade Vugteveen, co-owner and CEO of DeHamer Landscaping outside Grand Rapids, MI, brought his executive team to visit with me in New Orleans for a strategic retreat (see photos below).  In his words, here is what he experienced after the first five days after returning to work.

 “I told my wife that I don’t really recognize our company this week. It feels like a different place.” – Wade Vugteveen

Here are seven specific changes they made –– out of probably 20 motivating and profitable changes they implemented in the first week:

1. Hold an all-leaders team-building meeting.

They held a company meeting with all leaders where they played a fun game for everyone to get to know each other and then laid out their new company values. (Their Sales Manager, who is usually quiet and in the background, led this meeting with enthusiasm.) Each foreman took the time to talk about him/herself by answering a list of questions they created. Wade said it was a great meeting that felt entirely different from anything they have ever done. It was very well-received by their team; the energy and attitude were amped up! 

2. Nominate Chief Energy Officers.

During the strategic retreat, Wade and the team decided that Adam, one of the owners, would take on the role of Operations Manager. When they got back to work, Adam set up a three-person team to be responsible for the energy and attitudes of the entire production group, with the goal of leading everyone to more positive attitudes in the workplace. Adam named this team the Chief Energy Officers. 

3. Set up a personal database.

Adam, as the new Operations Manager, created a database of all of their team members and set up a schedule to give them formal reviews (which had not been done before). Adam collected personal information from all of his new direct reports so that the executive team could get to know and care for their people better. Within the first week, Adam had already met with half of the team, giving raises and re-setting expectations. This caught a couple of unhappy team members by surprise. It worked out super well!

4. Take the team to lunch.

The bar at my favorite restaurant, where I took the Dehamer executive team for a pre-event, southern creole meal.

Their Sales Manager had lunch with his salespeople and re-set much clearer expectations. Sounds like a no-brainer, but this was not part of the original Action Plan we had set. He simply made it happen. This should be happening a couple of times a year; lunching with your key leaders. When is the last time you took your people to lunch one at a time?

5. Find out what irritates your team the most and fix it.

They paved their parking lot, and oh-man did everyone really appreciate that. What’s one thing you could do to elevate everyone’s mood?

6. Remove the fires and decisions from your plate.

As CEO, Wade has been much less stressed and has had time to really focus on his role – there has been much less distracting discussions around the office and more people taking responsibility and just getting stuff done. Gotta love that. How freed up is your time?

7. Gain buy-in for cross-selling services.

Hard at work, the Dehamer executive team at my strategic retreat in New Orleans.

Their install salespeople have already sold a few lawn care and snow contracts in this first week, and they have become excited about supporting the growth of services, which was not the case before the strategic retreat. We laid out an entire cross-selling strategy where everyone will have responsibility for growth, not just the service sales team.

Wade also told me that on the flight back home, they decided to step up their plan to grow their sales team. And they already made an offer to a lawn care salesperson as a way to really accelerate the growth of their services division.

I am told that their executive team has gelled and bought into the growth plans that we laid out. As Wade shared with me, he does not recognize his company after just one week – It feels like a totally different and better place. 

Your Challenge:

It’s one thing to do a strategic planning session with your team, be it quarterly or annual.

But, it’s completely different to transform the energy of your team and actually create a plan that dramatically improves your culture and your financial results.

Your challenge is to think outside the box next time you hold a strategic planning session with your team.

To help this, create your own R&D program (rob & duplicate). Steal one of these ideas from above and implement it in your company.

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!

surfer riding wafe

Transition Your Company From Founder-Led to Founder-Inspired

At some point in the growth of your lawn or landscape company, you will want to focus your attention on new things. You may be bored with your current role, or you have personal or professional passions you want to follow.

Are you ready to make a change?

It is hard to make that transition, from leading the company to the role of inspiring the company. And if you are the face of the company, it is 10x harder.

How will you do this so that your company legacy continues to soar, while you shift your focus?  

Grab a cup of coffee and ponder this example: 

When Howard Schultz of Starbucks made the transition (for the second time, after the first time backfired), he made it clear to his troops that the new CEO was in charge. They held a private meeting, all sitting down on the wooden floor of the original Pike Place store. Howard then stood up and said to Kevin (the new CEO) and the leadership team, “This is my personal key to the Pike Place store. It is a key that I’ve carried with me for decades. And I want to present you this key as a symbol of this transition.”  

In my experience, a successful “next generation” leader tends to be more analytical because they don’t have the benefit of decades of operating by their gut and learning from early-on mistakes. 

Success also requires a more distributed leadership model. Even if the founder could initially run the business by herself or himself, the next generation cannot, or more accurately, should not do the same.

Assuming you have found the right leader or group of leaders, what will they actually focus on? 

  • Nurturing the vision
  • Making tough decisions to strengthen the company’s future path
  • Bringing more technology to bear
  • Greatly expanding the growth of the firm, based on the foundation built by the founder

What does a “founder-inspired” leader do?

You have a few choices on what your new role will be.  

  • Allow the new management to implement, i.e., stay out of their way! 
  • Look far ahead into the future growth, research new products and new markets 
  • Help ensure the original purpose of the company is kept alive, and strengthening the purpose to attract the younger generations.
  • Act as an advisor to the new leadership

When I speak to leaders, some of them also have other desires: 

  • Return to the field, back to their roots, to lead hands-on training
  • Go back to sales while someone else leads the firm
  • Or simply move on to enjoy life and travel more

Here is a prime example of a client who wants more free time:

I received a call from a landscape business owner who now wants to shift at the age of 52, take more frequent 4-5 day trips with his daughter, learn to surf, and enjoy life with his wife as traveling foodies. We will be working together to make that shift, and identify the team and infrastructure he needs in place to transition as quick as possible. 

Your challenge: Be honest with yourself – what would you like your role to be in the coming 3 to 5 years. (Don’t plan 10 years out to make this shift, that is too far in the future.) Start putting steps in place now to transition from founder-led to founder-inspired.

FINISH YOUR FINANCIAL YEAR STRONG WITH 12 PRACTICAL IDEAS

Finish Your Financial Year Strong With 12 Practical Ideas

“Starting strong is good. Finishing strong is epic.” – Robin Sharma

Your performance in this final quarter of the year will have an oversized impact on your year-end profits. In fact, it’s so important, that you should be reminded of it and think about it every year at this time. 

The question you should ask yourself is how you can persistently stay the course and finish this year with stronger net profits? Here are two critical areas of consideration.

1. Weekly Throughput 

The main driver of your net profit in the fourth quarter is measured by your company’s Weekly Throughput, i.e., the amount of billable production work your company can produce (“put through”) each week.

Here is why this is so important: Even though you estimate for net profit with each and every sale, starting with your first sale in January, the fact is that all the profit from those sales goes towards covering your overhead (OH) until all of your overhead is paid for. Once your overhead is covered, you have reached what accountants call your “break-even” date.

Once you hit your break-even date – all the profit you then make from every sale goes straight to your bottom line. Not only the net profit, but also the operational profit (that previously went to pay for overhead) now goes straight to the bottom line. This date is generally hit right before or in the 4th quarter.

Do you know what your break-even date is? Have you reached it yet?

2. Operational Margin

My high performing clients are able to achieve an Operational Profit Margin in the upper 30%’s and 40+% depending on the type of business they are in (and how long they have been working with me). If your operational margin is, for example, 35%, then after you hit break-even, every dollar that gets produced will put at least 35 cents or more towards your bottom line! That is a lot!

To this end, the more sales that your team can produce and bill in this final quarter, the more net profit you will ultimately earn. Conversely, if you have too many hiccups this fall, you put your year-end net profit at risk.

Thus your drive for additional revenues to maximize your margins should be on your mind all the time, if you want to finish the year strong

Here are 12 Ways You Can Increase your Weekly Throughput and Year-end Revenue:

  1. Keep salespeople motivated to continue selling through December, using situational and year-end incentives. Having an increased backlog is good, it puts positive pressure on the crews, so they have more than enough work to chew through.
  2. Decrease the non-billable time (shop time, morning, travel, deli and gas stops, evening) so more time is spent on billable work.
  3. Decrease (eliminate) the unnecessary go-backs needed to complete a job by ensuring crews are properly equipped and dispatched, with trucks and tools operating smoothly.
  4. Ask crews to plan to be flexible in case of bad weather, working late or weekends, so you can hit your Weekly Throughput goals.
  5. Use overtime (OT) to get your extra backlogged work done; the incremental cost of OT will be more than offset by the additional operating profit that will drop straight to your bottom line. Do the math!
  6. Sell more fall and winter add-on services. Remember, enhancement sales can be sold at a higher margin than your standard work anyhow, so it is a double win.
  7. Walk every maintenance property and sell them services to be done now, or in the winter.  Find extra work that can be performed by crews already on maintenance properties.
  8. Sell holiday decor now to be done this fall. For example, how about selling front door arrangements as you see in the magazine Southern Living?
  9. Sell fireplaces and hardscapes to be started now (and completed during the winter).
  10. Raise next year’s hourly rate right now, and apply it to your fall work. Who says you have to wait till January to raise rates?
  11. Deliver your holiday presents to clients early, and they will likely give you more work to take care of.
  12. Incentivize your crews to increase their Weekly Throughput. Make crews accountable for their weekly production goals, and motivate them to be as efficient as possible. Share the winnings when they sprint through the finish line.

Connect the dots:

Many employees may not immediately grasp how sprinting through the finish, and ensuring a healthy net profit will benefit them and their families. Take the time to explain this to them by connecting the dots on how it benefits the company and how it benefits them directly. Using an incentive plan helps them see directly how it benefits them and creates a win/win situation for both of you.

(I love helping companies set up effective incentive plans because it is so win-win when done right!)

Your Challenge: Pull everyone together if you have not already done so, and explain to them which day in your calendar you hit break-even and how the production during the 4th quarter will help the company hit and beat its year-end profit goals, thus benefiting everyone.

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

Leadership Under 140 Characters

Here is a short tip for providing focused, effective leadership when work is busy.

Inc. Magazine is a great resource; last week it ran a short article on leadership that is applicable to everyone. Here is an excerpt.

The magazine shared a tweet from Elon Musk: “Incredibly proud of the SpaceX team for achieving this milestone in space! Next goal is reflight within 24 hours.”

Elon tweeted this the day after his company SpaceX successfully launched and recovered its first recycled rocket, Falcon 9.

Two lessons here, according to Inc. Magazine

  1. Focus on your employees’ accomplishments, not on your own.Show appreciation, make it specific and sincere. Celebrate your team and what they are achieving. Some leaders use “manage by exception” but that can become dispiriting when only the negatives are highlighted.
  1. Keep your team aligned to the next big thing. Promote a culture of continuous improvement and keep the team focused on the next challenge at hand.  Your team wants to grow, and they will achieve break throughs with your encouragement and direction.

Elon Musk’s tweet was very short, (under 140 characters,) but it said a lot about his leadership.

What is your leadership style? Do you put your people first? Or do your facial expressions, body language and frustrations create a mixed environment during the spring rush?

Jeffrey’s Breakthrough Idea: Leadership is simple when you keep it simple, and make it about your people.

Take Action: In spite of all the setbacks you will incur this spring, take time to highlight the win’s as they happen and keep your troops looking forward to the next challenge.

12 Opportunities to Improve Your Leadership

___1. SHARE YOUR VISION – Share your vision of the company: what you want the company to look like in 3 years +/-. Keep it simple with a couple of sentences or bullet points. End your vision statement with the benefits: WIIFE & C (What’s in it for employees & customers). Employees will LOVE hearing your vision and how it will benefit them. Repeat this in every meeting and put it up visually for all to see.

___2. HELP EMPLOYEES SET GOALS – Meet your employees biannually, monthly for key employees, and help them set goals that will grow their careers and help meet the company vision. Help them balance short- and long-term goals. Show them how to set SMART goals, and help them develop how-to plans. Hold them accountable. If you don’t teach this to them, who will?

___3. BE ACCESSIBLE – Give employees time to talk to you, even if they don’t report directly to you. Have work time where they see you, the leader, inspecting their work, and downtime where they can chat with you.

___4. SHARE THE NUMBERS – Hold your employees accountable to meeting the financial benchmarks of their crew and division. Share the goals with them and give them regular feedback on results. Information is empowering; success is intoxicating.

___5. CORRECT IN PRIVATE – When you give corrective feedback or get mad, do it in private or at least not in front of others. They will respect you for this.

___6. SHOW APPRECIATION – Paying your employees and giving them a job is no longer seen as appreciation. You have to say thanks, use their name (very powerful!) and give a specific attaboy. Show group appreciation too, verbally and with group events. BBQ anyone?

___7. ASK THEM WHAT THEY NEED FROM YOU – Ask them what they need from you especially if they are a direct report. If they report to someone under you, be careful not to undermine their direct supervisor, in which case, ask them what they need from the company.

___8. TAKE NOTES. If they give you suggestions, let them see you write it down. Close the loop with them: Let them know if and how you used their suggestion, or if you decided not to and why. Take small groups of employees to breakfast, and ask them how the company can add more value to clients. Take notes. Repeat and rinse.

___9. CUT WOOD, CARRY WATER. If you ask them to cut wood and carry water, let them see you do that too. It doesn’t have to be all the time, but once or twice, especially if it is awful work. If you want them to follow company ‘values’ and safety guidelines, you need to be seen following them as well.

___10. RAISE EXPECTATIONS. Leadership means showing your employees what is humanly possible – even personally, e.g., by giving them books to read and urging them to raise their game. Help them set short- and long-term personal goals, when you meet with them on business goal planning.

___11. GET PERSONAL. Since employees spend most of their waking adult life at work, be available to discuss personal issues if they need help or are feeling stuck personally. I do not mean you should become their friend – you should not. Simply be accessible and compassionate, without being nosy or pushy.

___12. TREAT EVERYONE DIFFERENTLY. This one is not easy, but it is the most important leadership point. Everyone wants to be treated special, i.e., acknowledged for their own strengths, needs, quirks and talents. Don’t rubber stamp how you handle each employee, find out what makes them tick.

RATE YOURSELF.

How do you score 0-3 on each of these?

0 = Not doing

1 = Needs improving

2 = Is in place or improving

3 = Doing consistently well.

What are the top 2 areas you want to improve in the next 6 weeks?

 

_______________________ & _______________________