One of our forum members shared with us his insight into the importance of job tracking. I think his insights will be very helpful and lead you on a proper path. If you would like to join in on this discussion further, visit this discussion at the Gopher Lawn Care Business Forum.
It’s time to start the year end preparation for the next year supplies and materials. This can be good if done properly.
Do you track materials you purchase throughout the season such as mulch or fertilizer? If not, you should, and here is why.
- In order for you to grow your business you must set realistic goals and here is how you can achieve those goals.
- If you’re not tracking how much product you purchase, how are you to know how much or how little to buy for the next season?
- If you do know your one step ahead and then you should set a goal and prepare for it. This means what you bought in product last season you should increase 20-30% each year until you reach your customer base goal.
Knowing how much materials used on a job/customer will help you for the next season, making you more efficent and raising profit margins. Growing you business. Setting goals gives you the incentive to attract more customers. Be relistic when setting these goals, some call it baby steps I call it setting a customer percentage increase or CPI for short.
Without tracking, how are you to know if your growing or not? Most that do not track will never make it in lawn care business. 80% will fail in the first 3 years of starting their lawn care business.
I track everything, fuel, cell phones, mulch, ferts, weed control, right down to the pants we purchased. I can tell you how many ‘Moon Shadows’ we bought last year and these are our trade mark plant. The total was 46. I can tell you how much we spent on pavers and wall block on each job. This comes from job costing or known as tracking.
Why is this so important? Well let’s say:
- First it is profitable when taking your books to the accountant, because if he/she has a shoe box full of recepts and has to go through them to sort it all out just to do your taxes, you just lost money because their going to charge you for the extra time it took them to figure out what is what.
- Second, again how are you going to be profitable in not knowing how much material you used and cost of it, and how are you going to set your CPI to that service.
Even more important is that you will fine extra money in the bank and think wow we are doin great. You may find yourself asking can I afford that new Z turn or that new mini skid-steer I was wanting this year? So off to the bank you go and the first thing the loan officer asks is I need 2 years of tax returns and a P & L. Opps you didn’t track or do proper basic bookkeeping and now your P & L looks like, well I don’t have to say it. So now your back looking at them saying well this is what I came up with on the P & L. Here is the total amount of jobs we did and here is where we paid all of our bills and here’s what we got in the account so I guess this is my profit. This might work but I personally don’t care for a ‘might.’ I am more of a yes/no, right/wrong type of person, no gray. I don’t have room for it in running my lawn care business.
When you are persenting yourself at the bank as a lawn care business owner, you should at the very least appear to be professional and have proper basic accounting practices. This means just because they have known you at the bank for some time dosn’t mean they know what kind of business person you are when it come to handling business finances. Saying it and doing it is two different things. You’ll find most bankers are like Missiouri, the “Show Me” state.
Bottom line is proper accounting practices and keeping up to date with them will make you more efficent and profitable for time spent. If your spending 3-4-5 hours a day just doing paper work and trying to catch up on the accounting then you need to work on time management. Proper time management can be benifical to everyone espcially the family. Set a time schedule and stick to it. My schedule is 8am-6pm M-F and every other Sat 8am-noon. After that I don’t work on business stuff.
If you lack the accounting skills to be proficient then check with your local Library for fee computer classes in accounting.