- How to Create and Track a Budget
- Improve Efficiency to Combat Labor Shortages in the Landscape Industry
- Level Up Your Landscape Operations with Business Management Software
- The Importance of Having Your Business Organized and How Landscape Business Software Can Help
- How to Use Technology to Save on Landscape Labor Costs
How to Create and Track a Budget
Attributed to: Dave Francis, senior marketing manager at Toro
If you’re just starting out or you’re relatively new to the landscaping business, creating a budget may not be at the top of your list of priorities. But the simple fact is that you should have a budget for your known expenses.
A budget is a critical tool for a landscaping contractor. It not only helps you make sure you’re on track to meet your goals each month, but also helps you plan for the future. Knowing your numbers is also key to pricing jobs accurately and making sure you’re hitting your profit margins. A landscape business budget template or business management software like Toro’s Horizon360® is a great place to start.
The Importance of Tracking Actual Expenses Against What You’ve Budgeted
Another benefit of having a budget is being able to track when your actual expenses exceed what you were expecting for the month.
By comparing your actual expenses against what you have budgeted, you can see where your challenges are and make adjustments to make timely decisions before you run out of financial resources.
Direct Expenses Versus Overhead
When creating and tracking your budget, be sure to categorize your expenses as direct expenses or overhead. A lawn care business budget template should help you track your direct expenses and overhead separately.
Direct expenses are the expenses you have as a result of normal operations as a landscaping contractor. This includes things like materials, labor, fuel and other costs of running equipment. These costs are variable and often fluctuate from month to month based on the volume of work you do.
Overhead represents the ongoing costs that are required to run your business. This includes rent, utilities and insurance on your facility, as well as office equipment and supplies, and management and administrative salaries. These costs typically remain the same, no matter how much work you’re doing.
Apply Overhead to the Work You Do and Understand Your True Costs
As a landscaping contractor, you need to know how much it costs you to do the work so you know how much to charge customers. Rather than simply calculating labor and materials and marking it up, it’s important to take your overhead into account. Otherwise, you run the risk of pricing your services too low to meet your profit goals — or even too high, which could make you less competitive.
For accurate pricing, some amount of overhead should be allocated to each job. To do this, add up your weekly overhead costs and divide that total by the number of hours of direct labor you average per week. Multiply that amount by the number of hours you estimate the job will take and add it to your estimate.
Let Software Do the Heavy Lifting
If you’re looking for a landscape business budget template, Toro’s Horizon360 business management software is the perfect solution because it can do all of this for you. In fact, Horizon360 can help you manage budgets, track profitability and calculate overhead at the customer, job and/or crew level.
In addition to job tracking and scheduling, Horizon360 includes powerful tools for analyzing your costs and expenses to help you optimize pricing. It’s easy to use and navigate, and expert support is available by phone, email or chat. Streamline your business and plan for the future by managing your budget with Horizon360. Request a demo and see what it can do for you.
Improve Efficiency to Combat Labor Shortages in the Landscape Industry
By: Dave Francis, senior marketing manager at Toro
Fortunately for landscape contractors, as homeowners spent more time at home they looked to professionals to improve and maintain exterior spaces and that trend has not yet slowed. However, the seasonal nature of landscape work has always made hiring the right people difficult, but the global pandemic has worsened labor shortages.
One benefit of the ongoing, incoming work is that — with an efficient operation — contractors are able to pay higher wages. Attracting the right talent will mean you have the best team to get the work done.
Use these three tactics to grow your business and increase efficiency.
Consider Your Equipment Strategy
Which pieces of your fleet are providing the most value? Should anything be replaced or repaired to make operations run more efficiently? Be sure to ask your employees who use the equipment day-in and day-out. Strategically work to align your equipment with what's needed to achieve your goals.
Strengthen Client Relationships
Focus on building your relationship with current clients. Those that haven't scaled back services are an opportunity for growth. Do they know your full set of offerings? Do you have a vision for their exterior space? Even if they don't add on more services right away, you've established a relationship and opened the door for future growth.
Obtain vital information using landscape management software to help drive profit. This technology helps pinpoint inefficiencies, provides ways to improve, and frees up time for important tasks. Combining this data with business management software allows you to see what is actually profitable and make the best decisions for you and your business.
Toro's business management software, Horizon360®, is a great example of how to gain efficiency. You can track your crews' whereabouts, drive behavior, productivity and schedules with the software and small tracking devices.
By optimizing your operations, you can spend your dollars in the most-needed places, like employees wages to attract great labor. Additionally, you can get more done with less labor by increasing productivity. Technology puts you a step above other contractors who aren't focused on efficiency.
Level Up Your Landscape Operations with Business Management Software
Attributed to: Dave Francis, senior marketing manager at Toro
Owning and operating a lawn maintenance and landscaping business is complex. To do it successfully, it takes the right tools and resources. However, our research shows 57% of contractors still use paper logbooks to manage their work.
Equipment tracking, enhanced customer communications and connecting crews can set you apart from the competition. We launched Horizon360TM to make it possible.
Simple and Effective
Making an impact doesn’t have to be complicated. Horizon360’s navigation makes it easy to locate the schedule, create a new job, or import invoices into Quickbooks®Online. It’s easy for your crew too with notifications for relevant new jobs and same-day schedule changes with no extra effort from you. Use Horizon360 to:
- Manage employees, crew and equipment
- Create and manage recurring jobs
- Maintain customer information
- Manage customer jobs
- Schedule and assign work
- Track completed and uncompleted work
- Track crews and equipment
- Analyze crew and asset productivity
- Manage budgets
- Track profitability
- Calculate overhead at the customer, job and/or crew level
- Automate invoicing
- Analyze finances
- View and size potential customer properties remotely
- Create estimates
- Manage leads
Data that Matters
Can you improve route scheduling, equipment, or pricing structure? By looking at your data and insights in Horizon360, you can confidently make decisions that affect productivity, your bottom line and profit margins. You can also sync your customer, employee, and expense data in Quickbooks®Online with the click of a button.
Equipment & Crew Tracking
Track every piece of machinery that has a standard 12-volt battery, no matter the brand, with the easy-install tracking device for vehicles and equipment. See exactly when and how long equipment is used and how long the crew is on a specific job.
Cameron Duncan, owner of GrassMaster Lawn Service in Poplar Bluff, Missouri explains, "Our favorite feature of the Horizon360 app is the ability to track our equipment in real-time and clock in and out of job sites automatically. It allows us to see how long our equipment is sitting, how long it is working, and how long we are spending between job sites."
Installing and using the tracking devices is easy and the data can make a noticable difference in how the crew operates.
Preparation is Key
Plan ahead for unexpected events, like a snowstorm or emergency repairs. Enter clients and locations in advance so when the time comes, assigning crew members to jobs with efficient routes gets them up and running as quickly as possible.
When weather days, snow removal, changes in service and other events happen, every minute impacts productivity. It’s simple to build efficient routes for jobs with no known date. These on-demand jobs can also be added to existing routes. Edit jobs and routes, and notify your team in real time.
Do the leg work in advance and you’ll make keeping your business schedule flexible and efficient look easy. The more prepared you are, the more satisfied customers you’ll have at the end of the day.
The Horizon360 app allows the team to see schedules, important notifications and field notes. Horizon360 will automatically track jobs and turn them into invoices waiting for your approval. Job notes and proof-of-service photos can all be added to the invoice so you & your customers know exactly what happened on every job.
Support as Needed
Should you have questions along the way, Toro team members are available to answer questions via chat, phone, or email. Support & training is unlimited and free.
Take your operations to the next level while making things easier on yourself and your team with Horizon360.
QuickBooks® is a registered trademark of Intuit, Inc.
The Importance of Having Your Business Organized and How Landscape Business Software Can Help
Set up your business for long-term success with the organization needed to understand its inner workings, increase profits, and impress your customers.
While it is possible to track some items of your business manually, using landscape business software makes it fast and easy to monitor not only what you’re currently tracking, and also provide important business insights for you to take action on.
Understand your Business
As a landscape contractor, the better your information is, the more confident you can be in your business decisions.
It’s important to start with a baseline for how your business is performing. If a certain type of job isn’t profitable, it doesn’t make sense to increase your number of similar jobs. If a crew is less efficient, what are the possible reasons? If there is room for improvement in routing, billing, or cutting costs, you’ll want to make changes.
The fastest and easiest way to get organized is using landscape business software — like Horizon360. The software will help you get a handle on your margins all the way down to the specific job or client and it will help you know which crews and pieces of equipment are the most efficient. You can easily adjust routes and jobs with real-time updates, and you can get a better picture of all costs and profits.
When you’re organized and using landscape business software, you see benefits in day-to-day operations, like knowing where your crews are and for how long, updating routes and jobs and sending real-time updates, and sharing field notes and proof-of-service photos with customers. You’ll also see benefits over time by getting insights on how changes affect productivity and opportunities to become more profitable.
Make It More Profitable
Once you have a good understanding of where your business stands, you can then determine the most logical places to improve and grow and the best times to do so. Your goals may be around:
- New business
- Expanding services with existing clients
- Growing your team
- Changing the type of jobs your team specializes in
- Upgrading your fleet
- Building on insights realized through your landscape business software
Not all goals are created equal. By understanding your current business, you’ll be able to set goals that are based on data, which is significantly better than a gut feeling. If you haven’t heard of SMART goals, let us introduce you. "SMART" is an acronym for individual pieces of a goal that can help you create and meet your landscape business goals. Each contains important characteristics so you can hit your milestones.
- Specific. Specify the who, the what, and the how of the goal. This portion of your goal assigns specific action to specific people using a specific method.
- Measurable. Assign a specific percentage of change, number, dollar amount, or other measurable indicator to your goal. This portion allows you to determine if you are successful.
- Attainable. Check to make sure your goal is realistic and attainable. Look to your landscape business software for insights when developing your goal. Outline the insights and data that shows the goal can be achieved.
- Relevant. Determine if your goal is relevant to your specific business. Once organized, you’ll have a better understanding of which opportunities have the greatest potential to positively impact your business.
- Time-Bound. Assign a time frame to the goal. This will provide motivation for action to achieve the goal. Check to ensure this is attainable and relevant.
Organizing your business is a necessary step to setting and achieving your goals. Intuition is good, but the power of data is great. It gives you the information you need to set SMART goals and the confidence to set your crews in motion, knowing they can be successful.
Impress Your Clients
Put your best foot forward with clients both short- and long-term. By using landscape and lawn care business software to organize your business, it’s easy to provide value-added features like:
- Proof-of-service photos
- Automated payments
- Quick contracts
- More accurate bids, which you can turn into jobs
Your business will look more professional and increase your customers’ confidence in your services.
By organizing your business, you’ll also be able to make better decisions on which customer jobs are best for business and what price points you need to hit to be successful. Gaining a deeper understanding of your business, setting yourself up for future success, and ensuring your customers are confident in your services are all crucial to the long-term health of your business. Landscape business software makes it easier to do all three.
How to Use Technology to Save on Landscape Labor Costs
Landscape labor costs are one of the most critical pieces of the profit puzzle and one of the hardest to control. Technology is enabling landscape contractors to manage their businesses — including landscaping labor — better than ever.
The data-driven insights boost your bottom line. The technology makes it possible to track productivity, analyze costs and expenses, optimize routes and save on landscape labor costs. Best of all, the technology is easy to use.
Move Your Margins
Making money is all about managing money. To do that you have to understand your profit margins.
To start, let’s talk about the money you make in sales. Undoubtedly that total is an important number, but it really doesn’t mean a lot on its own. The next step is to subtract the cost of anything spent on a job, including materials, equipment, landscaping labor and any other relevant expenses. This gets you to your gross profit. Finally, subtract all additional expenses — often overhead items like phones, vehicles, office space and other recurring costs — from your revenue to reach your net income, a true indicator of profitability.
To increase your net income, you have to move your margins, and there are a few ways to do that favorably:
- increase your rates
- decrease your costs
- become more efficient
- some combination of the three
Keep Your Head Above Water
Don’t make assumptions or look the other way when expenses come in. It may seem overwhelming, but it doesn’t have to be hard to stay on top of it all. Lean into technology to help manage all your expenses. Horizon360 makes it incredibly easy to sync customer, employee and expense data with QuickBooks® Online.
Separate your expenses into costs related to materials and services — like landscaping labor costs — and those related to overhead. Make sure you are accounting for all of your income. Take a look, what is your labor cost relative to your revenue with other expenses removed? Can you afford to pay more to attract the landscaping labor talent you need?
Calculate expenses and income all the way down to the type of job or the client and you’ll be able to easily see what jobs are the most profitable for your business. Then you can make smart decisions about what jobs to take and accurately price to ensure you’re meeting your goals.
Accurately tracking income and expenses by job is the best way for landscape contractors to know if they are hitting profit margins and understanding their opportunities for growth. If you bury your head in the sand, you won’t see those opportunities walking by.
Go Beyond the Competition
It makes sense to be careful about your expenses. Analyze which ones are worth it and which are a drain on your business. It’s also important to ensure you’re charging an adequate amount to not only stay afloat, but also to achieve your goals, without pricing yourself out of your market.
Horizon360 can help you better analyze your numbers to make sure you’re hitting your margins, but it is also great at optimizing your landscape labor costs. Here is where you can differentiate yourself from other landscape contractors in terms of profitability.
Think about your business as it exists today. Are there places you can find efficiencies in landscape labor costs using technology?
- Are your crew members running the most efficient routes? Know definitively that you are scheduling efficient routes, saving both time and fuel.
- Where are your crew members? Did they follow the assigned routes? Are you worried about burnout because they never take a break, or are you worried that those breaks stretched on too long or perhaps took them on an unapproved detour? Track employee and equipment productivity.
- Are some crews more efficient than others? Is it worth upgrading or adding equipment to help them become more efficient? Optimize efficiency across crews, equipment and customers.
- Are crew members bringing in additional business by upselling or spreading the word? Can they create a work order right when the customer requests the work?
- If the weather changes or there’s a change to a schedule, is it easy to alert your crew? Easily flex schedules to add or edit on-demand jobs and push updates to crews in real time.
- Is it easy for your team to check in and out? Enable employees to clock in/out from a mobile device or a tablet in a shop. Track, edit and approve work hours and sync the information with payroll.
- Does all of the work make it through to invoicing and payment? Avoid lost or forgotten jobs and missed invoices.
The real superpower of Horizon360 is the ability to turn your business into a machine that makes everyone’s lives easier. It makes work easier for your crew, it shows more value to your clients, and it frees you up to focus on profitability and growth.
Charge and Pay Appropriately
Once you know your total revenue and costs as well as profits per job, you can safely adjust your pricing and wages. Determine if you could and should charge more on specific jobs. At the same time, analyze if you could pick up more business if you are willing and able to drop any prices.
It’s not only the money coming in that can be adjusted. With the right data, you’ll be able to take a look at your landscape labor costs and determine if they need to be adjusted up or down. If you can’t stay afloat with current wages and there is nowhere else to cut costs, you’ll need to lower wages, or pay new employees a lower rate. On the flip side, if you have healthy margins, you can raise wages or offer bonus incentives to employees, which can also help attract and keep the best talent.
Don’t Stop Now
From those first confident decisions technology enables you to make, you’ll be bettering your business. It’s important to note, there is no set-it-and-forget-it solution. It is leaps and bounds easier to make good landscape business decisions with Horizon360. But to achieve ongoing optimal results from your landscaping labor cost investments, you need to stay tuned in to what the data and your crews are telling you.
Look at each job and ask the team to see if there are opportunities to increase efficiency and better distribute work within each crew and across crews, keeping their wellbeing in mind. Gain buy-in and great ideas for the future. How you use technology and how you interact with your staff play a huge role in your future success.
Frequently Asked Questions
How do I calculate lawn care and landscape profits?
To calculate lawn care and landscape profits, subtract all costs from revenue to determine net profits. If possible, do this on a per-job basis so you can determine which jobs are the most profitable. Lawn care and landscaping business software can help make this an easy process.
Why should I calculate lawn care and landscape profits?
Calculating lawn care and landscape profits allows you to make informed decisions on how to run your business, which jobs to pursue and what to charge for those jobs.
How much should I charge for a lawn care or landscape job?
How much you charge for a lawn care or landscape job depends on the expected income, expected costs, the desired profit margin, and what your research says your client will pay.
How do I make my lawn care and landscaping business profitable?
By tracking and analyzing revenue and costs, you will be able to see what jobs bring in money, what expenses are worth the investment, and how you can optimize your operations to have profitable margins inline with your goals.