Expense or Investment? Rethinking Your Budget
June 22, 2022
For many Green Industry companies, this is a common theme. There’s a tension between “making hay” during the growing season and trying to balance expenses. I get it.
But I think for many of us, we’re looking at the equation of “expense” all wrong. Often, there are times we can, and should, look at something as an opportunity to invest in the company’s growth. Here are three areas where we need to see the chance to invest rather than an expense.
Investment in people is not overhead
I once worked in a Green company where the supervisors had a fair amount of paperwork to do. They had to document training, fill out time cards, and do all the paperwork for any incidents that came through. Often, during rainy days when the crews weren’t in the field, they’d all sit in their shared office and furiously work through this stack of paper. Once, the owner of the company walked in to see them all sitting there, filling out the paperwork that his company required, and he simply said “Wow, there’s a lot of overhead in this room,” and walked out.
In fairness, this was a really good place to work. I also don’t think the owner had any sense of the weight of his words, and how demoralizing they sounded. These guys were just trying to do the job he’d asked them to do!
Don’t make people feel like a burden
You, owner, CEO, President of the company, ops manager, sales manager – I’m talking to you. You need to show gratitude and value the contributions your team is making. Investing in your team with a word of gratitude will go a long, long way.
I once had a conversation with my manager at a landscape company I worked at and said that an upcoming concert would be a great show to see. A week later, he handed me tickets for the very concert I’d offhandedly mentioned. He said, “I think you’ve done a really good job over the last year or so, and I just wanted you to know that I noticed.” I’d follow that guy to the moon without a helmet now if he asked.
We also need to prioritize training for our teams. I heard a quote once where two managers at XYZ Widget Corporation were talking (it’s an illustration – deal with it). The first manager says “What if we invest in training people, and then they leave?” The second manager says “What if we don’t invest in training them, and they stay?”
As this article in Birmingham Business Journal states, “A training program focused on improving work performance skills can provide that kind of work force [a skilled and motivated work force], but only when management views employee training and development as an investment, not an expense.” (This article is nearly 20 years old; this isn’t a new concept.)
Create a robust training plan for your team. Invest time and money into it, and I promise you’ll reap the rewards of it in customer satisfaction, word-of-mouth referrals, and happy team members. (This will also make recruiting easier, but that’s another blog.)
Investment in equipment is not a budgetary line item
I once lived in an apartment where there were just two units. It was an old farmhouse that was split into ground-floor and 2nd-story apartments, and the neighbor upstairs and I were responsible for the yard work; mowing, trimming shrubs, etc.
The driveway was up against the backyard of another single-family home, and the homeowner had a row of shrubs planted to give some privacy. It was a weird mix of arborvitae, Rose-of-Sharon, and something I still never identified. It would grow out each season, by about mid-Summer, into the driveway so you could barely get a vehicle through.
In there, however, there was definitely some poison ivy. Both the upstairs neighbor and I are highly allergic (yes, I know it’s ironic I work in Green and I’m severely allergic to poison). So, we contracted the trimming and debris removal out to other companies.
In the first year, I hired the company. I contracted a larger, local company. The guy showed up in a single truck with a trailer, a gas-powered hedge trimmer with an extension pole (the shrubs were about 9’-10’ high), tarps, a rake, blower, and hand shears for thicker branches. He was well trained (see point #1 above), and had the proper equipment, so he managed the job himself and was done in about 2 hours.
The second year, my neighbor picked out the contractor. He called some “Chuck with a Truck” he found in the local newspaper (I didn’t know people still did that) who mentioned “affordable” in the ad copy. It turned out to be slightly more expensive than the first company, but he was paying the bill, so I didn’t mind.
This guy showed up with 3 other employees, electric shrub trimmers, no extension cord (I supplied, along with the power), an electric blower, more rakes than I’ve ever seen, and several pairs of loppers, AND a very dangerous-looking step ladder. They had to scrape everything off the ground and throw it over their shoulder level into the back of a lifted pickup. It took them almost 3 hours to complete the same job.
How to apply this
Here’s the point; the second guy had a lower profit margin on the job. He wasn’t equipped as well, so he spent more money on salary than necessary. (Incidentally, this is also why he has to charge more.) With an investment in the proper equipment, you’ll get to more billable jobs during your season than if you try to cheap out on it and just hire more people. Besides, it’s not like hiring is really easy right now.
The Great Pyramids of Giza may have been built entirely by hand, but you know what? I’m sure the Pharaohs would have had them using a crane and an excavator if they were available.
Investment in technology is not a monthly expense.
Okay, I’m aware this is going to sound self-serving coming from a SaaS company, but hear me out. It’s the same principle as the last point – time is money.
If you have a recurring service (lawn care, tree care, etc.), and your schedulers can’t see the year’s work in front of them, you’ve got a problem. You’ll end up with missed applications, customer service headaches, and canceled jobs.
What about your Sales team? How long does it take for them to generate a proposal? If you don’t know the answer, there’s a problem. Do you know what they’re not doing every minute they’re spending drawing up proposals or talking to the schedulers to find out when Mrs. Jones’s azaleas are getting planted? They’re not selling, which is what you hired them to do!
This is why many companies have shifted to an Inside Sales team for services based on square footage, like lawn care or pest control. It’s not just because it’s more convenient for the client (usually this is the case). It’s also because they can get “in front” of more potential clients in a day. This is literally the same thing – leveraging existing technology to save your Sales team time and allow them to speak to more people in a day. Why wouldn’t you consider software that would allow you to do the same thing?
Do the math
Do the math for yourself. How much money did you leave on the table last year because you sold it, but couldn’t get it produced due to scheduling errors? How much are you paying your Sales team hourly to generate proposals? If the answer to either is “More than a software solution would cost me each month,” then you’re leaving profit on the table for your business.
Dig into your numbers. See if there’s a solution, any solution (not just software) that will help. It could be an excavator, a new truck, or tablets with cellular signal (so your crews can communicate with the office via email or software) – there are lots of technological investments that will save you money in the long run.
Many Lawn Care, Tree Care, and Landscape businesses need to seriously reconsider how they approach spending money. Ask yourself – do I view this as an expense, or as an opportunity to invest in the future growth of my business?