Open Association of Landscape Industries
Getting on top of the business
For a while now, I've been feeling that the business has been running me rather than me being in control. I've been out working in customers gardens, doing estimates, landscaping jobs just like all of you who come onto this website. I've also felt that we have not been making as much money as we should have been and almost treading water.
So I sat down at 6 in the morning yesterday with a cup of coffee and thought I wonder where I've been going wrong. I started looking at the running costs which isn't too hard as they are pretty static and it was a fairly easy process. Then I started to look at the cost of wages over the next year with tax and ni included which then gave me the total outgoings. Then it made me think well what could our turnover be for the next year and then I went on to the break even point and then profit.
This whole process took me an hour at the most and it was so enlightening because it made me see where I have been making mistakes. It has also made me see where I can make improvements within the business. I feel now by doing this process, I am back in control, I also understand now that to run a business, you have to work on it and not in it.
Replies to This Discussion
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PRO MemberPermalink Reply by Gary RK on -
Lisa, go look in the key business objective group.
There are some excellent posts and details of other key financial ratio's that help monitor your business.
I learnt a while ago that to succeed you need to balance working in the business with working on the business.
It's a hard balance to strike in the early days.
I now delegate certain functions to 'others' - sure it costs, but I can do better with my time than pulling my hair out, wasting time and still getting it wrong ;-)
It had always been my desire to run a business, so I've got the best of both worlds - running a business, with good staff in a trade I enjoy.
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PRO MemberPermalink Reply by Gardens4u.co.uk on -
its always good to re -evaluate, asses and calculate debs / incomes etc.
too many people just carry on being 'busy fools' ive heard the expression.
you have to stop , think, look at where you are and where / what you want to do if possible.
good to be a boss , but i think i can manage to earn more on my own . less trouble, less risk and less headache. you can also find yourself giving work away to staff and losing out on your own wage !!
great if lots of big jobs or lots regular work staff can do no doubt.
plus paperwork / tax/ n.i / insurance can make it not worthwhile.
IF YOU PUT UP PRICES 25% (OR HOLD THEM IS BEST AT THE MOMENT) SAY YOU LOSE 10% CLIENTS : YOU ARE STILL EARNING THE SAME BUT DOING LESS WORK !!
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PRO MemberPermalink Reply by Gardens4u.co.uk on -
my truck is paid . saved a grand on repayments .... still worth a lot .
dont think it was a bad thing john ... as you have said : less worry , reliable , good for business , holds value.
but realize its worth' to you , now you have a chance to buy a well looked after vehicle under market value ?
vw van - cant go Wrong .............. as an economist said the other day - WE ARE MAROONED . so get the Anchor out captain ..
j.p grass roots h&g said:hi lisa
im glad your on top of things
me myself have had a very busy year but i feel some things have got out of hand , my regret 3 years ago was leasing a van which i find does get expensive . so next year the lease is up so iam going to buy the van off the dealer , hich in effect reduces my bills a bit , i have raised prices on contracts next year so iam going to be better off , fuel prices fluctuate so theres nothing i can do there , but hopefully next year will be just as profitable asthis year .
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Permalink Reply by Busy Bee Garden Services Limited on -
We do a very crude monthly set of figures on top of the normal book keeping which is simply income-expenses = profit or loss just to make sure we are not trading badly, it gives us a view of how the business performed in the last 30 days. But agree very easy to get stuck into the normal day-to day stuff and not the financials.
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Permalink Reply by Fenlandphil on -
Interesting post Lisa. I find it is the unpredictable that is the biggest problem in running a business, the sods law effect. In my own experience the fewer staff you have the fewer problems generally.
As for vehicles they are a big drain on resources, leasing can have its' attractions but it is a regular chunk of cash going out of a business every month before you have earned a penny to pay for it.
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Permalink Reply by Lisa Valentine on -
I didn't post this in the key business objectives group as it really made me think. I do generally keep on top of receipts and invoicing so I've been thinking well I'm doing the paperwork and keeping the spreadsheets up to date, however, I have not had a good look at the real fundamentals of the business. It was interesting as we have just let go of two people and had 2 new people but they are doing more hours and we have raised our prices as well. Before, I was making a profit after taking a wage but the business felt very static and it was interesting to see the other morning exactly where I was going wrong
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PRO MemberPermalink Reply by Jen@A&J Owenwindows&gardens on -
Totally agrees about the sods law factor and about vehicles. A mistake vehicle purchase last year cost us a total of £4500 - the damn thing wasn't even worth that much. In hindsight we should have cut and run and dumped the thing at the first sign of trouble. A lesson well learned and a mistake never to be repeated.
Fenlandphil said:Interesting post Lisa. I find it is the unpredictable that is the biggest problem in running a business, the sods law effect. In my own experience the fewer staff you have the fewer problems generally.
As for vehicles they are a big drain on resources, leasing can have its' attractions but it is a regular chunk of cash going out of a business every month before you have earned a penny to pay for it.
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PRO MemberPermalink Reply by Rowly Hill on -
Sounds as though you were suffering from "Treadmill Syndrome" Lisa but you've had a wake up call and now your on your way to pushing the STOP button and turning yourself from a Treadmill business owner to a Ladder B.O.
The former works very hard but in business terms stands still whilst the latter may or may not work as hard but progresses their business in all areas.
Most of us with small business's will find it very hard to change our focus within the business and in some small way break free so we can work on getting things back on track so we can move things forward.
Making a full assessment of the current business position is the starting point and then working out how much time you will need to take out and away from a hands on role to manage the business properly.
Breaking tasks into monthly ( management accounting, reviewing business plans, setting actions for the next month) and possibly annual tasks would also be a good way to go.
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Permalink Reply by John on -
Can you be a bit more specific Lisa about where you were going wrong ?
Lisa Valentine said:I didn't post this in the key business objectives group as it really made me think. I do generally keep on top of receipts and invoicing so I've been thinking well I'm doing the paperwork and keeping the spreadsheets up to date, however, I have not had a good look at the real fundamentals of the business. It was interesting as we have just let go of two people and had 2 new people but they are doing more hours and we have raised our prices as well. Before, I was making a profit after taking a wage but the business felt very static and it was interesting to see the other morning exactly where I was going wrong
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