Knowing your numbers is essential to doing good business. Indeed, you need to have a good understanding of your business performance in order to make critical decisions. But when it comes to making real-time decisions, you need to have metrics at your fingertips. Unfortunately, most companies don’t see metrics until the end of the month when they run reports. At this point, it is too late to make changes to work that has already been completed.
Being able to look at daily metrics is the differentiator between landscaping companies that take their business to the next level and those that remain stagnant.
Real-time job costing
One of the most important things you should do is review the real-time job cost (for your current jobs) so you can make changes to keep the job profitable. There are five main data points to track to do this: labor, materials, equipment, subcontractor expenses, and overhead. If you track these numbers and review day-to-day operations, you’ll be able to provide your team with insight into what’s needed to achieve your goals.
Ultimately, it’s about staying on top of how close your estimated costs are to your actual costs so you can make changes, if necessary, to get a job back on track. It doesn’t do you any good to find out that a job has cost you money after it’s already finished.
Looking at cash flow
Ongoing cash flow analysis is also important for a profitable operation. You need to know exactly how much money is coming into your business as well as how much is going out. A healthy cash flow is essential for a healthy business. And just like costing, regularly reviewing cash flow will allow you to make quick, real-time decisions that can impact your financial success.
Using a daily cash report is a better practice than using a checkbook or online bank balance. The latter two do not take into account outstanding checks.
Control business expenses
While this is part of cash flow, it’s important to point out that having all business expenses under control, including the “small ones”, will make a huge difference to your success. This is what we call “financial awareness”. The more financial knowledge you have, the better. If you don’t get your spending under control, you can start to negatively impact an otherwise profitable business.
Daily spend tracking lets you analyze whether money is being spent in the best possible way for your business. You will also be prepared for tax season, which will make it easier to go through this period.
The value of visual reports
When it comes to all those numbers, you want a quick and easy way to look them up. Reading a ton of data can take a long time. That’s why many successful businesses are turning to visual reporting. It is a process of extrapolating data and formatting it into readable formats, such as tables and graphs. This will allow you to make quick decisions based on the information you have.
While many landscaping businesses still use spreadsheets and printouts to review data, upgrading to a landscape business software solution for your business will allow you to review daily measurements and also use visual reporting tools to make quick decisions. The goal is to be able to have real-time information in front of you at the push of a button.
A tool like Asset can help you produce daily reports and view financial data in real time. With everything at your fingertips, you can make smarter decisions for your business.