Stay in the Green: 5 Tips to Manage Your Landscaping Company’s Budget
The Right Budget Can Help You Grow
No matter the size of your landscaping company–whether you’re the sole employee or you manage a team of hundreds–mastering your budget is one of the most important skills you can learn. As a sole proprietor, your finances are fairly straightforward: you need to purchase quality equipment, fuel for your vehicles and tools, and personal protection gear, and set aside some cash for taxes and unexpected expenses. If you’re leading a large team, your responsibilities are greatly expanded when you factor in payroll costs and individual employee needs. In both situations, managing your expenses and understanding your income is crucial for sustainable growth.
We understand that you are likely more passionate about proper lawn care and maintenance than you are about accounting, but fear not! Managing your company’s expenses is not as scary as it may seem. Read on for a few no-nonsense tips to help you maintain a steady income flow.
Balancing Your Income and Expenses
Budgeting isn’t just about restricting your spending; it’s also about optimizing the cash flow that’s coming your way. With a little common sense, you can find the perfect balance that can make running your business a lot simpler.
Price Your Services Right
Pricing your landscaping services can be more difficult than you anticipated when you started your business. Price yourself too high and the average homeowner won’t be able to afford your services; but if you price yourself too low, you won’t be making the money you deserve for your hard work, and you may also be indicating to potential customers that your services aren’t worth as much as other companies’.
The basic formula for properly pricing your lawn care services measures the physical size of the job, the complexity of tasks needed, labor costs, equipment, and overhead. But how do you get to the right dollar figure for each of these line items? It’s a good idea to become familiar with the national industry standard as well as the average pricing of your competitors in the area. You should account for the type of clientele you’re trying to attract.
Additionally, keep in mind that you will need to adjust your prices in the future to account for increasing overhead costs, additional labor costs from new team members, etc. Don’t stay stagnant, or you run the risk of significantly reducing your profits.
Separate Your Personal Finances From Your Business Finances
This may seem fairly obvious, but sometimes small business owners–especially sole proprietors–tend to let all of their finances pool in one place. Sure, it’s easier to look at your whole financial situation in one place, but when it comes time to file your taxes, it can be a real hassle to discern the personal purchases from the business ones. One easy way to keep track of this is by getting separate credit cards for your personal and business expenses. A trusted CPA can help guide you in the right direction. And speaking of which…
Work With a CPA
Specialists exist for a reason! You don’t have to get a certificate in accounting in order to run your landscaping business. A good CPA can do so much more than file your taxes every April. Your CPA partner should carry out tasks that guide you to the ultimate goals of accumulating wealth and continuing to grow. You may ultimately find that your CPA becomes a valuable part of your team as they prepare your financial statements and maintain your cash flow.
Make Partnerships With Local Vendors
A huge part of growing your landscaping business involves maintaining and repairing your equipment. You simply cannot afford to buy new commercial equipment at the first sign of wear and tear; rather, it’s in your best interest to do what you can to make sure each piece of machinery can last for years to come. By establishing a relationship with a mower maintenance shop in Longwood (or your local area), you can give your equipment extra longevity and potentially get the best deals on parts and service! A great maintenance and repair shop always puts your success at the forefront of their priorities.
An effective organization system can help you streamline your ordering process and help you ensure that you have enough materials–fuels, oils, fertilizer, mulch, and so on–without overspending in any one category. Maintain a spreadsheet that compares your average usage of each material with the supply you have on hand. Be sure to revisit this spreadsheet frequently, as material costs and demand can fluctuate quite often.
Here at Gator Mower Parts, we offer the best service in the area to help keep our commercial partners in business. We would love to partner with you! To learn more, give us a call at 407-260-1292 today.