Time is your inventory. They calculate time, improve efficiency to save time, and pay technicians for how productively they use their time.
Are you protecting your time by managing your expenses, pricing appropriately, and paying a fair wage?
“Time is our inventory, just like electronics is inventory for Best Buy,” said Adam Linnemann, president of Linnemann Lawn Care in Columbia, Illinois. “How does Best Buy protect its inventory? They have a till system, a security guard at the door and cameras. They watch over their inventory. We need to monitor our inventory, so we need to make sure we are billing as much as possible, reducing non-billable time, and making sure (your) team is tracking time correctly and not wasting time. ”
You know the old saying that time is money. Unfortunately, many lawn care workers experience this the hard way when treating a loss leader service to get work (bye, profit) or not budgeting carefully and end up spending more than they deserve.
“If you don’t plan or budget, emergencies can arise and you aren’t prepared or have the resources to deal with them,” said David Jennett, president, Green Valley Pest Control & Lawn Care, Creston, Iowa.
Lawn maintenance prices may differ from landscaping such as design and installation. You have to deal with different materials and a different division of labor – usually a technician and a truck instead of a three-man crew. The billing cycle is also different, based on a lawn care program versus more frequent visits for mowing or week-long construction projects. While all landscaping services sell time, the nature of lawn maintenance requires certain planning.
As you study the benchmarking charts on page B4 of this guide, consider these insights from lawn care professionals explaining how to buy materials, price services, pay employees, and increase fees.
Investing in inputs
In early winter, Dayna Macbeth, Operations Manager at Fit Turf in Denver, Colorado, sends a letter to dealers and suppliers in the area. “I reach out to those I want to do business with and let them know about the products we want to use,” she says.
Macbeth collects estimates and compares them. “I have them compete in a way,” she says. “I could say, ‘I’d love to get this weed killer from you, but it costs $ 5 more a gallon so we could end up spending a few thousand dollars more buying it from you.’ Often times I can get them or a local manager to lower the price. ”
That year, Fit Turf saved $ 3,000 in seeds as a result of Macbeth’s due diligence.
“You have to ask, ‘Are you ready?’” She says. “Even if the price per pound is $ 0.10 lower, we’re saving money as a company.”
By ordering early, Linnemann saves up to 20% of the material costs for lawn care. He attends supplier fairs where he has the opportunity to pre-order products for the year. “We look at what we’ve used in the past and what we’ll need for the coming season, and we keep those prices fixed,” he says.
Linnemann estimates that around $ 80,000 is spent annually on herbicides, pesticides, and grass seeds. Despite the early order confirmation, he is not obliged to pay for the products until the consignments have been delivered. During the entire growing season he receives materials as needed.
Since Linnemann has worked out 60-day terms with his supplier and doesn’t pay for pre-ordered materials until they are shipped, he can collect service invoices and apply those dollars to his invoice instead of using a credit line. “By making it possible for us to invoice customers and collect payments on time, we can cover costs more easily instead of swallowing this (material) invoice into advance payments,” he says.
Here, too, the message is: just ask.
“Sometimes you just need to ask whether a provider is willing to grant you extended terms, and that can relieve your cash flow,” says Linnemann.
Jennett buys pre-emergence fertilizer in winter and pays a flat rate. “We buy our spray herbicides as needed,” he says. The same goes for the grub control.
Equipment is “drive it till it dies,” says Jennett, saying the company focuses on the oldest pieces of equipment each year.
Linnemann adds, “Make sure you cover your equipment costs so that one day you can replace them.” By factoring equipment costs into your pricing, you are ready to replace trucks, spreaders, syringes, hoses and reels, and ride-on machines .
Price right
How much do you earn per 1,000 square meters of managed property? This is how Macbeth and Fit Turf founder / President Paul Wagner see the pricing.
“The biggest mistake most lawn care companies make is undervaluation, and some companies will use lawn manure as a loss guide – once they have the customer, they sell other services,” says Wagner.
“Lawn care has to be profitable,” he continues. “So in our market, we like to make $ 14-15 per 1,000 square feet with a profit margin of 20%.”
In order to determine how much he bills his customers for lawn care, Linnemann has compiled the production rates for 100 objects of different sizes. “We measure these online and get the square footage, then we keep track of how long it takes to treat each property,” he says. “So if a garden is 10,000 square feet and it takes us 30 minutes, we’ll take that back and say, ‘How many thousand square feet can we create in that time.'”
Basically, Linnemann takes an average of these production times and awards a price per square meter. Then he adds material costs, equipment costs, and travel time, which are also incorporated into the company’s overhead costs. Using landscaping software, as long as the “input” numbers are correct, the output provides pricing that is in line with the company’s profitability goal.
Jennett relies on an Excel spreadsheet to calculate expenses and come up with a fair price for lawn care services. The formula includes: materials, average labor cost, and material cost.
“The bigger the lawn, the lower the price per square meter because we recognize the efficiency and the cost of doing business,” he says.
“If you don’t plan or budget, emergencies can arise and you aren’t prepared or have the resources to deal with them.” David Jennett, President, Green Valley Pest Control & Lawn Care
Pay to attract good people
Good help is hard to find. And depending on the market, it can be difficult to afford a lot of help. But just as important as understanding that lawn care is about selling time, it is also about delivering quality – and that takes talent.
“This is an expensive market,” Macbeth says of Denver, adding that Fit Turf pays a little more than the competition. Lawn care technicians make about $ 20 an hour, and tree care specialists make between $ 19 and $ 30, depending on their qualifications.
“We have an incentive-based pay structure for technicians,” says Macbeth, noting that they are paid hourly but can get unlimited overtime as long as they are efficient. This payment comes as a bonus. The company also offers a welcome bonus. “If you do a full season with us, you’ll end up with $ 1,000,” she says. “If you come back after winter, you will get $ 500.”
A referral program pays technicians $ 300 for each quality recruit hired. Fit Turf pays $ 150 after hiring and $ 150 more if the team member is still on board after three months.
Another way to earn and provide quality services is to get reviews from customers online. Technicians are provided with rating cards that say “thank you” on the front and ask for feedback on the back. “Every time a technician gets a verified five-star rating on their name, they earn $ 50,” says Macbeth.
Last year, a team member made $ 200 in just a few weeks. In addition, technicians can earn a 10% commission on the sales force on their behalf. “We have a unique pay structure for our region,” says Macbeth, noting that anyone who has worked for the company for five years or more receives 100% of their health insurance premiums, valued at $ 400 for individuals and $ 800 for Families receives.
“This is really great for bonding,” says Macbeth. “It helps us hold on to the great guys we have on our team.”
To estimate the ideal wage rate for his area, Jennett calls other business owners in his area to find out their average hourly wages. Because many of these owners are lawn care customers, they have an open relationship and they don’t mind sharing that type of information, he says. “There are a few manufacturers in town that we can reach and employers like fast food restaurants and service companies like plumbing and electronics,” he says.
Linnemann determines the wage rate based on certifications, work ethic, employment history, flexibility and availability. For each additional license, technicians can earn about $ 1 more per hour. The company covers training materials and tests. “All you have to do is ask and register,” says Linnemann. “We pay for everything, so it’s important that you want to excel in the industry.”
Overall, according to Linnemann, from purchasing materials to pricing and paying employees, accuracy is the key. He says: “The biggest thing for us is that the software we use has a budgeting tool.”
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