it is not a surprise landscaping companies experienced record growth in 2020. As social distancing and safe haven as a nation, home improvement projects have become a mainstay – and it makes sense. With more free time and the lack of a change of scenery, people needed something new to watch. Overall, we’ve seen a huge increase in the number of people who have chosen to make the most of their land.
With that in mind, now is the time for landscaping business owners to invest in technologies that will grow their businesses and their bottom line. With the right software tools, accounting and budgeting become assets rather than liabilities.
Of course, budgeting in the green industry is notoriously difficult. Work is seasonal, demand can be unpredictable, and staffing is dynamic in nature. All of these things make financing, especially through traditional bank loans, difficult to obtain. Add to this the highly competitive nature of outdoor home services, and having money when it is needed most becomes an ongoing issue, especially for small and medium businesses.
Fortunately, there are options. These options include government assistance and small business loans, but more importantly, there are also improved business processes that take the guesswork out of controlling costs. After all, an injection of cash can be a big help, but it’s not as helpful as adopting a long term solution to budgeting.
A better approach needs to be built around precision. But “improved processes” doesn’t mean more hours spent checking timesheets or looking at spreadsheets. More work is the last thing most business owners have time for in their schedule. To understand how software can be an effective (and easy) solution, let’s take a look at the issues it faces.
The profitability of any project depends on the initial offer. Bid too much, lose the customer. Bid too little and you eat the difference. When aggressive competition drives down offers, it makes things even more difficult. What is needed is clear data on the costs of a job. Managers should ask themselves a series of questions when bidding on projects. For example, how long exactly does it take to complete specific gardening and landscaping tasks? Is it different from employee to employee? It’s one thing to be “fairly sure” about the answers to questions like these, but it’s another to have hard data. Basing an offer on hard data can separate a profitable offer from a loss.
There are two big challenges in landscaping for payroll accuracy. One is the distributed nature of work. How do you keep track of what employees are doing on multiple sites simultaneously? With the large number of places your team is dispersed throughout the day, this task can seem daunting. It’s not that you should expect them to be dishonest, but if you use old-fashioned methods like paper timesheets or texting, discrepancies can arise.
The other major obstacle is seasonality. Most crews need to strengthen their ranks with 1099 employees during busy seasons in spring and summer – and they often make staffing decisions on the fly due to changes in weather. These elements make payroll a much bigger challenge than for companies that pay a fixed number of employees the same amount of money each week or month.
Having access to real-time cost data, as opposed to days or weeks after the fact, is absolutely essential. Unfortunately, most companies only have the latter because they are stuck using analog methods. Imagine that your team went over 75% of the budget, but only 50% with the necessary work. Obviously a reassessment is needed to make sure you can be profitable.
But by the time they take a close look at the numbers, the opportunity to reallocate resources or renegotiate has passed if they are using analog methods. Effective cost control puts owners in control with data on what’s going on now.
How technology solves these problems
The right software can meet these challenges. Today there are a few specialized mobile apps that manage time and location tracking and then feed that data into payroll systems. This temporal data is also used to provide fast and accurate real-time views of labor costs on each project.
When choosing between potential solutions, there are some things to keep in mind. For example, what is the ease of use factor? Was it created with the end user in mind? The design should be simple and intuitive – not full of little texts and endless options.
For business owners who face the budgeting challenges outlined above, now is the time to jump on the technology-based cost control bandwagon. While most areas have experienced a dramatic slowdown in 2020 due to COVID-19, landscaping and lawn care moved in the opposite direction, and continued growth is expected. Getting the most out of it starts with leaving old problems in the dust. The grass is definitely greener on the other side.
Editor’s Note: This guest post was written by Nic De Bonis, CEO of Workyard