lbtcadmin
12-30-2006, 06:08 PM
Lawn Care and Landscape Articles For Lawn Care Servicing
Key Figures To Know
By Phil Nilsson, Green Industry Consultant
www.nilssonbooks.com (http://www.nilssonbooks.com/)
Business owners tend to view their company operating results as something to be completed at year's end. Their financial statements, tax returns and other key business documents are covered annually to analyze how a business did from a historical perspective.
Although a year-end analysis is important, the problem lies in not knowing what is happening in the business over the short term. Also, once-a-year analysis does not give an owner time to turn his or her business around midyear if results are lower than expected.
What an owner needs to do is fill the gap of once-a-year reporting with short-term reporting. Short-term reporting, or key figures, indicates how a business is doing for a month, week or even a day. Key figures tell owners over the short term if a company is on track to fulfilling long-term goals without going through the expense or formality of preparing financial statements.
KEY FIGURES: THE BARE MINIMUMS..
The numbers we're after to measure short-term results need to be easy to obtain, apply and understand without doing endless research and without investing a lot of time. If you know one or two key figures as bare minimums, you can often fill in the blanks to the others. How often you want to know this information is up to you, but when I was in the landscape business I used to run tallies every day.
What was I looking for? ... What did I want to know?
I looked at sales, labor costs, direct costs, overhead and projected profit. At the end of each day, it took me about 15 minutes to figure out the results of that day. After figuring the daily results, I then transferred the information into a logbook. This book would eventually contain the outcome of each production day for an entire year.
Certain assumptions about the key figures had to be made to avoid the time and expense of actually looking at accounting records. Nevertheless, if you have two figures - sales and labor hours - that's all you need to get started filling in the blanks. This is generally true because certain expense categories "follow" along in ratios or percentages as a rule when compared to sales and labor costs.
THE THINGS YOU SHOULD KNOW.
Daily production or billable sales "created."
Direct payroll costs for the day.
Direct overhead costs for the day on daily labor.
All other overhead costs for the day, assigned to that one day.
Profit for the day.
This may seem like a lot of trouble to go through to get the key figures, but it is not very time consuming. To do get these answers, all you need is the sales figure and the payroll hours for one day. The rest of the numbers will fall into line by ratio. We want to know how much sales we did for the day and how much it cost to do those sales. Log all these numbers, run a year-to-date in your logbook, and you'll have a cumulative picture of where you are.
FINDING THE NUMBERS TO USE...
The daily payroll part is easy. Figure how many hours your employees worked and the average hourly pay to get the total payroll for that day. Enter this into your logbook. Sales for the day represents what was produced in billable work. If jobs are not billed because they are incomplete or in process, estimate the percentage of completion.
For fixed contracts, spike out known sales values for portions of the work completed such as mowing, pruning, edging and so on. Direct overhead costs are assumed to follow payroll costs and hours. Get this "hourly figure" by analyzing your financial statement to draw conclusions and come up with an hourly cost on average. Direct overhead costs are costs that happen because you did some work and "engaged" other expenses. When an employee comes to work, certain expense categories follow him or her around during that day - fuel, depreciation on equipment, supplies used, insurance on the vehicle, repairs to equipment and more. Those costs can be visualized as "on the road" costs or "at the job site" costs. All other overhead costs such as rent, utilities, advertising, general overhead and administrative costs can be visualized as "back at the shop" costs.
General overhead expenses are those that are not identified or related to payroll hours. They happen and cost you whether you have business activity or not. Split these out separately and come up with an estimate of the total production hours you expect to have for the entire working season. Yes, as you go along during the year you may have an increase or a decrease to production hours as new work comes in, but it's the best number you have at the time, so work with that number. As more than projected production hours go up, general overhead costs per hour go down, and vice versa.
THE END RESULT...
You will know how much sales you had for one day and what those sales cost the company to know what the profit was for the day. You can then figure out how much you have made for the season to that point and compare that number to where you thought you'd be at that point. Isn't that what you want to know?
Other
resources:
Sales Boosters (http://nilssonbooks.com/sales_booster_package.htm)
Job Estimating Package (http://nilssonbooks.com/job_estimating_package.htm)
FREE Job Pricing Guidelines (http://nilssonbooks.com/free_job_guidelines.htm)
New Business Startup Package (http://nilssonbooks.com/just_getting_started.htm)
Complete Operations management System (http://nilssonbooks.com/coms_package.htm)
Nilsson's Job Estimating System (http://nilssonbooks.com/job_estimating_package.htm)has everything you need to evaluate job site specifications & work required, figure costs, how to price ~ lawns, grounds maintenance, landscape installs. You'll get step - by - step instructions, bid proposal outlines & customer contracts, labor hours job times. You'll get job price guides to compare your prices with the going rates, overhead costs, materials, profit ratios. You'll set realistic prices, and job labor hours goals based on field tested, proven, time studied labor hours for every job you bid. You'll know how to evaluate every job for total work hours required, the price to charge for the job, the profit you'll make, best crew size, job costs. You'll also get add-on service check lists to help you maximize sales by upselling customers on additional property improvements.
(http://nilssonbooks.com/coms_package.htm)
Nilsson's FREE Job Pricing Guidelines
When it comes to pricing lawn and landscape jobsnobody has more landscape industry pricing information than Nilsson Associates, Green Industry Consultants. Nilsson's Job Price Guides covers lawn care bids, job bidding & estimating for tree care, irrigation installation & service, pavement sweeping & maintenance, snow plowing operations, landscaping and hardscaping job bids for both commercial & residential customers as well as real estate management, parks & recreation departments, municipalities, college and univeristy grounds. The prices cover; estimates & bids for grounds services, landscaping pricing estimates , estimating & bid the price seasonal work, year around commercial estimate contracts, price per square foot, best grounds maintenance & landscaping job to bid & pricing, price of lawn care, lawn mowing price, aeration pricing, lawns, commercial landscape job bid estimates, most all outdoor maintenance estimating & pricing, mulching prices, pricing chemicals, weeding & aerating pricing, fertilizer prices, prices for organic fertilizer, pricing weeds in beds, pricing pruning & trimming trees & shrubs, pricing commercial & residential snow plowing, hardscape pricing, pricing hydroseeding, irrigation service estimates for commercial & residential, pricing seeding lawns, pricing lawn sod, prices for slit seeding lawns, pricing edging lawn beds, spring cleanup prices, pricing fall cleanups, hourly price of pressure washing walks & patios, pricing trees, stump grinding prices, price for gutter cleaning, lawn dethatching price, price for shoveling snow, pricing salting, price for sanding.
For more information: Click Here for FREE Job Pricing Guidelines (http://nilssonbooks.com/free_job_guidelines.htm)
http://nilssonbooks.com/guarantee.gifNilsson Associates has the information you need to operate your business and make it a success. We offer one of the Largest Resources available in the Green Industry on the internet. Everything from how to sharpen a mower blade to how to manage a small or large, simple or complex business doing millions in sales! You can keep your buisness small or grow it each year. It's up to you how far you go. Some are just interetsed in mowing lawns as a service, then add on pruning, planting, trimming, shrubs, trees, plowing snow, and getting into bidding and estimating grounds maintenance, landscape installations, hardscapes, patios, retaining walls and waterscapes.
No mattter what services you want to offer, we have the technical and managment information you need that will save you time and money getting started. Take a look at our extensive line of books, audios, videos and employee training materials in English and Spanish. Start at the Nilsson Associatres home page www.nilssonbooks.com (http://www.nilssonbooks.com/) and scroll down the left side of the home page to locate the business problem you want a solution to. The index includes all these categories dealing with just about all lawn care, the best mowers, how to maximize profits in mowing, job bidding & pricing, what equipment to buy, lawns, grass, chemicals, fertilizers, pesticides, herbicides, landscape company operations, irrigation, snow plowing, planting, pavement services and many others.
The instruction you will receive is affordable, and highly focused training that really works! And ... The ongoing personal support from our Industry Experts is the Best Professional Management & Ownership Training Program in the Industry. With us assisting you every step of the way, your business will be up and running fast, making money, organized to win, separate itself from the competition, and on the "Path To A Rewarding Future."
Last edited by lbtcadmin : 10-19-2006 at 08:52 PM.
http://hispaniclawnforum.com/banners/jobestpakbanpn.gif (http://nilssonbooks.com/job_estimating_package.htm)
Key Figures To Know
By Phil Nilsson, Green Industry Consultant
www.nilssonbooks.com (http://www.nilssonbooks.com/)
Business owners tend to view their company operating results as something to be completed at year's end. Their financial statements, tax returns and other key business documents are covered annually to analyze how a business did from a historical perspective.
Although a year-end analysis is important, the problem lies in not knowing what is happening in the business over the short term. Also, once-a-year analysis does not give an owner time to turn his or her business around midyear if results are lower than expected.
What an owner needs to do is fill the gap of once-a-year reporting with short-term reporting. Short-term reporting, or key figures, indicates how a business is doing for a month, week or even a day. Key figures tell owners over the short term if a company is on track to fulfilling long-term goals without going through the expense or formality of preparing financial statements.
KEY FIGURES: THE BARE MINIMUMS..
The numbers we're after to measure short-term results need to be easy to obtain, apply and understand without doing endless research and without investing a lot of time. If you know one or two key figures as bare minimums, you can often fill in the blanks to the others. How often you want to know this information is up to you, but when I was in the landscape business I used to run tallies every day.
What was I looking for? ... What did I want to know?
I looked at sales, labor costs, direct costs, overhead and projected profit. At the end of each day, it took me about 15 minutes to figure out the results of that day. After figuring the daily results, I then transferred the information into a logbook. This book would eventually contain the outcome of each production day for an entire year.
Certain assumptions about the key figures had to be made to avoid the time and expense of actually looking at accounting records. Nevertheless, if you have two figures - sales and labor hours - that's all you need to get started filling in the blanks. This is generally true because certain expense categories "follow" along in ratios or percentages as a rule when compared to sales and labor costs.
THE THINGS YOU SHOULD KNOW.
Daily production or billable sales "created."
Direct payroll costs for the day.
Direct overhead costs for the day on daily labor.
All other overhead costs for the day, assigned to that one day.
Profit for the day.
This may seem like a lot of trouble to go through to get the key figures, but it is not very time consuming. To do get these answers, all you need is the sales figure and the payroll hours for one day. The rest of the numbers will fall into line by ratio. We want to know how much sales we did for the day and how much it cost to do those sales. Log all these numbers, run a year-to-date in your logbook, and you'll have a cumulative picture of where you are.
FINDING THE NUMBERS TO USE...
The daily payroll part is easy. Figure how many hours your employees worked and the average hourly pay to get the total payroll for that day. Enter this into your logbook. Sales for the day represents what was produced in billable work. If jobs are not billed because they are incomplete or in process, estimate the percentage of completion.
For fixed contracts, spike out known sales values for portions of the work completed such as mowing, pruning, edging and so on. Direct overhead costs are assumed to follow payroll costs and hours. Get this "hourly figure" by analyzing your financial statement to draw conclusions and come up with an hourly cost on average. Direct overhead costs are costs that happen because you did some work and "engaged" other expenses. When an employee comes to work, certain expense categories follow him or her around during that day - fuel, depreciation on equipment, supplies used, insurance on the vehicle, repairs to equipment and more. Those costs can be visualized as "on the road" costs or "at the job site" costs. All other overhead costs such as rent, utilities, advertising, general overhead and administrative costs can be visualized as "back at the shop" costs.
General overhead expenses are those that are not identified or related to payroll hours. They happen and cost you whether you have business activity or not. Split these out separately and come up with an estimate of the total production hours you expect to have for the entire working season. Yes, as you go along during the year you may have an increase or a decrease to production hours as new work comes in, but it's the best number you have at the time, so work with that number. As more than projected production hours go up, general overhead costs per hour go down, and vice versa.
THE END RESULT...
You will know how much sales you had for one day and what those sales cost the company to know what the profit was for the day. You can then figure out how much you have made for the season to that point and compare that number to where you thought you'd be at that point. Isn't that what you want to know?
Other
resources:
Sales Boosters (http://nilssonbooks.com/sales_booster_package.htm)
Job Estimating Package (http://nilssonbooks.com/job_estimating_package.htm)
FREE Job Pricing Guidelines (http://nilssonbooks.com/free_job_guidelines.htm)
New Business Startup Package (http://nilssonbooks.com/just_getting_started.htm)
Complete Operations management System (http://nilssonbooks.com/coms_package.htm)
Nilsson's Job Estimating System (http://nilssonbooks.com/job_estimating_package.htm)has everything you need to evaluate job site specifications & work required, figure costs, how to price ~ lawns, grounds maintenance, landscape installs. You'll get step - by - step instructions, bid proposal outlines & customer contracts, labor hours job times. You'll get job price guides to compare your prices with the going rates, overhead costs, materials, profit ratios. You'll set realistic prices, and job labor hours goals based on field tested, proven, time studied labor hours for every job you bid. You'll know how to evaluate every job for total work hours required, the price to charge for the job, the profit you'll make, best crew size, job costs. You'll also get add-on service check lists to help you maximize sales by upselling customers on additional property improvements.
(http://nilssonbooks.com/coms_package.htm)
Nilsson's FREE Job Pricing Guidelines
When it comes to pricing lawn and landscape jobsnobody has more landscape industry pricing information than Nilsson Associates, Green Industry Consultants. Nilsson's Job Price Guides covers lawn care bids, job bidding & estimating for tree care, irrigation installation & service, pavement sweeping & maintenance, snow plowing operations, landscaping and hardscaping job bids for both commercial & residential customers as well as real estate management, parks & recreation departments, municipalities, college and univeristy grounds. The prices cover; estimates & bids for grounds services, landscaping pricing estimates , estimating & bid the price seasonal work, year around commercial estimate contracts, price per square foot, best grounds maintenance & landscaping job to bid & pricing, price of lawn care, lawn mowing price, aeration pricing, lawns, commercial landscape job bid estimates, most all outdoor maintenance estimating & pricing, mulching prices, pricing chemicals, weeding & aerating pricing, fertilizer prices, prices for organic fertilizer, pricing weeds in beds, pricing pruning & trimming trees & shrubs, pricing commercial & residential snow plowing, hardscape pricing, pricing hydroseeding, irrigation service estimates for commercial & residential, pricing seeding lawns, pricing lawn sod, prices for slit seeding lawns, pricing edging lawn beds, spring cleanup prices, pricing fall cleanups, hourly price of pressure washing walks & patios, pricing trees, stump grinding prices, price for gutter cleaning, lawn dethatching price, price for shoveling snow, pricing salting, price for sanding.
For more information: Click Here for FREE Job Pricing Guidelines (http://nilssonbooks.com/free_job_guidelines.htm)
http://nilssonbooks.com/guarantee.gifNilsson Associates has the information you need to operate your business and make it a success. We offer one of the Largest Resources available in the Green Industry on the internet. Everything from how to sharpen a mower blade to how to manage a small or large, simple or complex business doing millions in sales! You can keep your buisness small or grow it each year. It's up to you how far you go. Some are just interetsed in mowing lawns as a service, then add on pruning, planting, trimming, shrubs, trees, plowing snow, and getting into bidding and estimating grounds maintenance, landscape installations, hardscapes, patios, retaining walls and waterscapes.
No mattter what services you want to offer, we have the technical and managment information you need that will save you time and money getting started. Take a look at our extensive line of books, audios, videos and employee training materials in English and Spanish. Start at the Nilsson Associatres home page www.nilssonbooks.com (http://www.nilssonbooks.com/) and scroll down the left side of the home page to locate the business problem you want a solution to. The index includes all these categories dealing with just about all lawn care, the best mowers, how to maximize profits in mowing, job bidding & pricing, what equipment to buy, lawns, grass, chemicals, fertilizers, pesticides, herbicides, landscape company operations, irrigation, snow plowing, planting, pavement services and many others.
The instruction you will receive is affordable, and highly focused training that really works! And ... The ongoing personal support from our Industry Experts is the Best Professional Management & Ownership Training Program in the Industry. With us assisting you every step of the way, your business will be up and running fast, making money, organized to win, separate itself from the competition, and on the "Path To A Rewarding Future."
Last edited by lbtcadmin : 10-19-2006 at 08:52 PM.
http://hispaniclawnforum.com/banners/jobestpakbanpn.gif (http://nilssonbooks.com/job_estimating_package.htm)