Time is your inventory. They calculate time, improve efficiency to save time, and pay technicians for how productively they use time.
Are you protecting your time by managing expenses, setting prices right, and paying a fair wage?
“Time is our inventory, just like electronics is inventory for Best Buy,” said Adam Linnemann, president of Linnemann Lawn Care in Columbia, Illinois. “How does Best Buy protect its inventory? They have a till system, a security person at the door and cameras. They watch over their inventory. We need to monitor our inventory to make sure we are billing as much as possible, reducing the non-billable time and ensuring that (your) team is properly recording the time and not using the time. ”
You know the old saying: time is money. Unfortunately, many lawn care workers find this out the hard way when treating a ministry as a loss-maker to get work (bye-bye, profit) or not budgeting carefully and spending more than they deserve.
“If you don’t plan or budget, emergencies can arise and you aren’t prepared or have the resources to deal with them,” said David Jennett, president of Green Valley Pest Control & Lawn Care, Creston, Iowa.
Lawn maintenance prices may differ from landscaping services such as design and installation. You are dealing with different materials and a different division of labor – usually a technician and truck rather than a crew of three. The billing cycle is also different, based on a lawn care program versus more frequent visits for mowing or week-long construction projects. While all landscaping services sell time, the type of lawn care you need to maintain requires specific planning.
As you study the benchmarking charts on page B4 of this guide, consider these insights from lawn care workers explaining how to buy materials, rate services, pay their employees, and increase fees.
Invest in inputs
In early winter, Dayna Macbeth, Operations Manager at Fit Turf in Denver, Colorado, sends a letter to regional vendors and suppliers. “I reach out to those I want to do business with and let them know about the products we want to use,” she says.
Macbeth collects estimates and compares them. “I have them compete in a way,” she says. “I could say, ‘I’d love to get this weed killer from you, but it’s $ 5 more a gallon so we might spend a few thousand dollars more buying it from you.’ Often times I can get them or a local manager to lower the price. ”
That year, Fit Turf saved $ 3,000 in seeds due to Macbeth’s due diligence.
“You have to ask,” Are you ready? “She says.” Even if a price is $ 0.10 less per pound, we’re saving money as a company. ”
By ordering early, Linnemann saves up to 20% of the costs for lawn care material. He visits supplier fairs where he can pre-order products for the year. “We look at what we’ve used in the past and what we’ll need for the coming season and we get those prices fixed,” he says.
Linnemann estimates he spends about $ 80,000 annually on herbicides, pesticides, and grass seeds. Despite the early order obligation, he is not obliged to pay for the products until the shipments are delivered. He receives materials as needed throughout the growing season.
Since Linnemann has agreed a 60-day term with his supplier and pays for pre-ordered materials only after they are shipped, he can collect service invoices and apply these dollars to his invoice instead of using a line of credit. “By enabling customers to invoice and collect payments from them on time, we can cover costs more easily than devouring that (material) invoice in advance,” he says.
Again the message is: just ask.
“Sometimes you just have to ask if a provider is willing to give you extended terms, and that can ease your cash flow,” says Linnemann.
Jennett buys fertilizer in the winter before emergence and pays a flat fee. “We buy our spray herbicides when we need them,” he says. The same applies to maggot control.
Equipment is “drive till it dies,” says Jennett, reporting that the company focuses on the oldest pieces of equipment each year.
Linnemann adds, “Make sure you get your equipment costs back so that one day you can replace them.” By pricing equipment costs you can replace trucks, spreaders, sprayers, hoses and rollers, and ride-on machines.
Price it right
How much do you make per 1,000 square feet of property serviced? This is how Macbeth and Fit Turf founder / President Paul Wagner see the pricing.
“The biggest mistake most lawn care companies make is underpricing. Some companies will use lawn fertilization as a loss maker. As soon as they get the customer, they sell other services, ”says Wagner.
“Lawn care has to be profitable,” he continues. “So in our market, we like to make $ 14-15 per 1,000 square feet with a profit margin of 20%.”
In order to determine how much he charges customers for lawn care, Linnemann calculated the production rates for 100 properties of various sizes. “We measure this online and determine the number of square meters. Then we keep track of how long we need to treat each property, ”he says. “So if a yard is 10,000 square feet and it takes us 30 minutes, we’re going to take that back and say, ‘How many thousand square feet can we do in that time?'”
Basically, Linnemann takes an average of these production times and assigns a price per square foot. Then he adds up material costs, equipment costs, and travel time, also taking into account the company’s overhead. Using landscaping software, the output will provide prices that match the company’s profitability goal as long as the numbers entered are correct.
Jennett uses an Excel spreadsheet to calculate the cost and come up with a fair price for lawn care services. The formula includes: materials, average labor cost, and material cost.
“As the lawn size increases, the price per square meter drops because we see the efficiency and cost of doing business,” he says.
“If you don’t plan or budget, emergencies can arise and you are not prepared or have the resources to deal with them.” David Jennett, President of Green Valley Pest Control & Lawn Care
Pay to attract good people
Good help is hard to find. And depending on the market, it can be difficult to afford great help. As important as understanding that lawn care is about selling time, it’s also about delivering quality – and that takes talent.
“This is an expensive market,” Macbeth said of Denver, adding that Fit Turf pays a little more than the competition. Lawn care technicians get around $ 20 an hour, and tree care specialists make between $ 19 and $ 30, depending on their qualifications.
“We have an incentive-based pay structure for technicians,” says Macbeth, noting that they are paid hourly but can work unlimited overtime as long as they are efficient. This payment comes as a bonus. The company also offers a welcome bonus. “If you do a full season with us, you’ll end up with $ 1,000,” she says. “If you come back after winter you will get $ 500.”
A referral program pays technicians $ 300 for each quality recruit hired. Fit Turf pays $ 150 after hiring and $ 150 more if the team member is still on board after three months.
Another way to receive and provide quality service is to get reviews from customers online. The technicians are provided with rating cards with “Thank you” on the front and feedback requested on the back. “Every time a technician gets a verified five-star rating on their name, they earn $ 50,” says Macbeth.
Last year a team member made $ 200 in just a few weeks. In addition, technicians can earn a 10% commission on the sales force on their behalf. “We have a unique compensation structure for our region,” says Macbeth. Anyone who has worked for the company for five years or more will receive 100% of their health insurance premiums, valued at $ 400 for individuals and $ 800 for families.
“This is really good for keeping,” says Macbeth. “It helps us hold on to the great guys we have on our team.”
To work out an ideal wage for his area, Jennett calls other business owners in his area to find out what their average hourly wage is. Because many of these owners are lawn care customers, they have an open relationship and they don’t mind sharing that type of information, he says. “There are a few manufacturers in town that we get and employers like fast food restaurants and service companies like plumbing and electrics,” he says.
Linnemann determines remuneration based on certifications, work ethic, employment history, flexibility and availability. For each additional license, technicians can earn about $ 1 more per hour. The company includes training materials and tests. “You just have to ask and register,” says Linnemann. “We pay for everything, that’s why they want to excel in the industry.”
Overall, from purchasing materials to pricing to paying people, accuracy is key, according to Linnemann. He says, “The biggest thing for us is that the software we use has a budgeting tool.”
Comments are closed.