Owners are responsible for managing their businesses while also maintaining and increasing profitability. Every owner discharges these duties differently. If you are an owner, now is a good time to check up on the performance of your primary responsibilities and make changes to ensure you manage your company properly. One of your most important duties is overseeing your company’s departments, starting with your company finances.
Your company’s operating system should track the financial progress of your company daily, monthly, quarterly and annually. As the owner, you should be able to review all revenue, accounts and expenses anytime. The cash position and expense due dates should be easily identifiable so plans for meeting them can be made in advance. The budget should align revenue and expenses expected and can be revised up or down as the year progresses.
Finally, require all department heads to provide their individual budgets to you so you can study and approve them before completing your company’s budget. Large companies in other industries usually establish their annual budgets in late fall. But the seasonal aspects of our industry cause many of us to delay the budget process. The earlier you can nail down your budget, the better and more beneficial management information can be.
Your marketing and sales plans
By this time of the year—mid-winter—your marketing and sales plans should be firmly in place and going full blast. Are your marketing results meeting your expectations? You won’t know how successful they are in generating sales unless you track them.
Most landscape companies assign an individual with business-creation experience to head up marketing. Your marketing and sales team members should be working in tandem as revenue creators. Marketing creates sales opportunities and carries an expense for doing that. Sales create the revenue stream on which the company operates and, ultimately, its profit.
Your sales division has expenses such as salaries, commissions and related expenses. Watch both your marketing and sales expenses and track them as a percentage of total income. Don’t hesitate to tweak your marketing efforts to get more sales bang for your buck. Never budget increases in any division without clearly identifying the corresponding return on investment.
Make it a policy for account managers and sales representatives to provide projections for your review, approval and inclusion in the budget. Challenge your sales reps to increase sales and require them to submit plans to acquire new accounts. Require account managers to submit plans to manage services to their clients as efficiently and cost effectively as possible. Review the amount of revenue managers and sales people have managed in past years, then ask them to up that amount while maintaining quality results.
Reduce administrative expenses
Revisit your administrative staff with an eye to consolidating responsibilities. You may be able to streamline receivable and payable administration, as well as reduce your support staff budget, by using CRM systems. As you review the customer relations responsibilities within this department, consider assigning account managers or sales reps to take on more customer interaction. This will reduce administrative expenses and bring more customer communication activity to the right people. Can you use voice mail to replace a receptionist in your company? This may frustrate some callers, but it saves expenses and reduces the company’s cost to operate and service clients.
Machines and people
Your shop and fleets represent a significant operating expense in company finances. Mechanic wages can add to your shop’s expense. A common mistake in this industry is owners having too many technicians. Your company needs quality technical support, of course, but don’t overdo it. A motivated, skilled individual who understands the business aspects of the shop and fleet management is far better than relying on a couple of wrench monkeys. Implement a systematic equipment maintenance tracking software system to help you identify replacement intervals and report hours of use.
While many of you start out thinking you can do everything that needs to be done to keep your company running profitably, you eventually realize you can’t do it alone. That’s when you begin challenging department heads to increase efficiency and contribute to the company’s growth while you keep a sharp eye on company finances and your employees’ performance.