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Budgeting for Bigger Returns

Mountain View Landscapes and Lawncare taps into LandOpt to improve its 2013 revenue-producing opportunities
By Mike Crummy


Steve Corrigan, even after more than 30 years as a respected landscape business owner, knew his company wasn't living up to its potential in selling its share of maintenance work. Even so, he couldn't quite figure out why. It frustrated him. Each year he developed a budget and everything seemed to be in place to become a more potent force in its western Massachusetts market, yet it still fell short of expectations. That's changing as Corrigan says he's finally learning how to really get into budgeting and better integrating it with marketing and sales, and more accurately and regularly measure and track his firm's key financial goals.


Mountain View's management team. Steve Corrigan, kneeling, has learned how to better integrate budgeting with marketing and sales, and more accurately measure and track key financial goals with the help of LandOpt.
PHOTO COURTESY OF MOUNTAIN VIEW LANDSCAPES AND LAWNCARE.

He now admits that, regardless of how many years you've been in business, you have to keep looking for better ways to do business. And it all starts with budgeting and building a better preseason plan to sell, track and execute work, he says.

Corrigan, president of Mountain View Landscapes and Lawncare, Inc., Chicopee, Mass., didn't have childhood aspirations of owning a landscaping company, but 36 years ago he began cutting grass to pay his way through college, where he was majoring in business. As his small lawn maintenance business evolved, Corrigan decided to change his major to landscape technology. He had found his permanent career path.

In his company's early years, Corrigan took on two close friends as partners, and Mountain View grew from predominantly a grounds maintenance business to a company that generated about 80 percent of its revenue by providing commercial landscape construction projects. In 2005, the partners amicably parted ways, with Corrigan becoming the sole owner of Mountain View.

Though he had enjoyed success in building up one of the most respected landscaping companies in western Massachusetts, Corrigan recognized that more could be done.

"Our biggest challenge was trying to grow our grounds maintenance business," says Corrigan. "We would grow, and then we would lose. We just couldn't seem to retain and grow that side of the business at a steady rate. I wanted to find a means and method to help us gain continuous growth in that area."

In early 2009, Corrigan was introduced to LandOpt, LLC, a service organization that licenses the use of proven business systems for a large network of landscape contractors. Believing that LandOpt's tools and systems would help achieve that elusive growth in the commercial grounds maintenance division, as well as support overall company growth, Corrigan joined the LandOpt Network in November that same year.

"When we made the decision to go with LandOpt, it wasn't about the processes being new," says Corrigan. "It was that sales, marketing, developing a financial plan, measurement and everything else was together in one package. It was a logical structure that we could see was going to take us to another level."

Mountain View quickly launched into transformation training and implementing a new CRM system. And because the transition was taking place in November, the company also dove right into its first annual budget in the new system.

"We had always been very savvy with budgets," says Corrigan. "But the LandOpt planning process was unique, and certainly different from what we had done in the past. The most intense aspect of it off the bat was adapting to planning out leads and sales activity. That was an area where we were lacking. Fortunately, our experience helped us get up to speed in that short window of time faster than somebody who hadn't dealt with budgets previously."

Taking a new approach toward an annual plan can be intimidating, but it's one that contractors don't have to face alone. Licensees work closely with a dedicated success coach for assistance both initially and over the long term through various daily and weekly interactions, either on the phone, online or in person. "Having the background support and coaching has really made this relationship successful," says Corrigan.

Start by gathering info

The actual process of annual financial planning for Mountain View starts with good, old-fashioned information gathering, or "pre-planning homework." There are certain costs every contractor knows will become a part of the financial plan, such as wages for field employees and administrative staff. Before new sales are even considered, any backlog of work that's known to be coming into the next year should be accounted for, as should any long-term maintenance agreements or expected renewals.

As preliminary numbers are plugged into the system and other details are added, the financial picture for the year comes into better focus. From there it's a matter of setting goals and making projections for the year ahead.

"The biggest challenge is forecasting that additional work we'll be doing, identifying that growth factor," says Corrigan. "Naturally, that part of the financial plan marries into our overall strategic plan. Our goal is to set certain benchmarks. Generally we're looking to grow net sales by 15 to 25 percent per year, either from new clients or existing customers through projects and enhancements. We might also want to add a certain number of new employees or crews. So we need to earmark when those sales are going to happen and when we're going to earn the revenue on those sales so we can execute new hires or other areas of the plan."

Determining exactly when sales will take place requires enough discipline on its own, but it's only part of the equation. Mountain View also needs to identify the mix of work that will be needed to achieve their growth targets.

"Particularly with our project work, the past couple years we've been a little too aggressive and haven't met our goals," says Corrigan. "The good news is that we've learned a lot about work flows from year to year, so our projections are becoming more accurate."

Tracking against goals

Once a new year begins, the LandOpt financial system is set up to make it easy for Mountain View to see how individual portions of the plan are progressing, in addition to what the big picture looks like. As hard data is entered, the system constantly updates its projections, allowing potential planning adjustments to be made when necessary.

One part of the financial plan is a sales plan that includes quarterly goals for the company's dedicated salespeople. Through the CRM process, Corrigan can measure sales efforts and see if they're aligning with the sales goals set in the original budget.

"Both on the sales front and revenue front, every month we submit our actuals, line item by line item," says Corrigan.

Within the financial plan building and monitoring process, Mountain View can drill down to details such as how much a maintenance/mow crew costs, or the man-hours and revenue associated with a particular account. The details make it easier to look down the road to see if targets will or won't be met, particularly when certain external factors come into play. For instance, with last winter being low on snow, Mountain View's snow operation came up short, but landscape work was able to begin four weeks early. Having a detailed, integrated overall plan allowed for an adjustment to occur without much hassle.

"Obviously nobody wants to have a shortfall on their projections," says Corrigan. "But if your financial plan and budget are set up properly, they'll show you not just the down revenue, but also your savings in equipment costs and labor that were budgeted specifically for that work that didn't come through. You can get a better view of the bottom line right away. Conversely, if you wind up with more revenue, you can also see the other financial implications that go with it."

Corrigan says that the detailed history his company has compiled the last couple years have made the planning process easier each year. Considerations like average account size and the number of sales proposals needed to reach their goals have become more quantifiable as Mountain View has gradually gained a more thorough understanding through experience.

"It's a fine-tuned approach," says the owner. "Going forward, we have more accurate history numbers to work with because of the way we're tracking everything. The first year the goal was to have the plan prepared by the end of December. This year our financial plan will likely be done in the first week of December, thanks to our knowledge speeding up the process."

Mountain View's financial planning system hasn't taken long to yield results. According to Corrigan, the company's book of business is up 30 percent from three years ago.

"We were always trying to grow this piece of business, and our relationship with LandOpt and the network finally gave us a mechanism to grow it," he adds. "I'm expecting the financial planning process to be even more beneficial as we continue, and hopefully we'll see that growth percentage keep climbing year after year."

Mike Crummy is a writer with The Promersberger Company in Fargo, N.D.