Why Good Reporting is Critical
July 19, 2022
This is the first part of our seven-part series on Reporting for your Green Industry Business.
Let’s get this out of the way right now – I know reporting isn’t the sexiest thing we do in our Industry. Men and women get out of bed and go to work because they enjoy planting annuals or climbing a massive tree, not because they’re excited to stare at a spreadsheet. I get it.
However, using reporting is a necessary function of running a successful business. You have to keep track of “your numbers” to make money and keep the lights on.
In this series, we’ll examine what reports you should be looking at based on your role in the company. We’ll take a deeper look at what numbers you should look at if you’re an Owner or CEO, Office Manager, or Operations/Production Manager at any Green Industry company.
But first – why do you need the numbers? And what do you need to know about those numbers?
Why Do I Need To Check Reports?
Reports are the sum total of mission-critical data for your business. They tell you lots of information about what is happening in your business, where it’s happening, and how it impacts the rest of your business.
For example, let’s say you’re an Office Manager. If you’re not keeping track of your receivables, you’ll have no idea when you’re getting paid for the work you’ve completed. If you’re not getting cash flow into the business, you might have an awkward few hours on payday when you have to explain to everyone in the company that there’s no money to pay them.
This is often called “data-driven decision making” or “DDDM.” According to datapine, “Data based decision making provides businesses with the capabilities to generate real time insights and predictions to optimize their performance. Like this, they can test the success of different strategies and make informed business decisions for sustainable growth.”
Here are some other great reasons to check your reports on a regular basis.
Make better reactive – and proactive – decisions
In terms of decision-making, you’ll probably start out as a “reactive” decision-maker when you begin checking your reports regularly.
For example, if you notice a Sales rep has a really poor close rate and discover they’re overbidding their jobs, you can do some reactive coaching.
If you notice a massive uptick in the backlog for your PHC programs after the appearance of a new invasive pest, however, you can make a proactive decision to focus more marketing efforts on treating landscapes for this bug.
Thinking about what your reporting means, the story it’s telling you about the state of your business, and current market trends will keep your business efforts on track and give you a competitive advantage.
Business growth opportunities
Knowing your “numbers” will also help you to know which types of business you should pursue. According to the Harvard Business School Online, “Given enough practice and the right types and quantities of data, it’s possible to leverage it in a more proactive way—for example, by identifying business opportunities before your competition does, or by detecting threats before they grow too serious.”
Many businesses in the Green Industry, especially “full-service” landscapers, end up trying to do everything a customer asks them to do. Sure, we’ll do tree pruning, landscape design, fertilize the lawn AND the flower beds, and do your snow removal!
And while you may even make money on that individual customer, it’s more than likely you’re not making money on each service line. Perhaps your Lawn Care department performs best because they have higher profit margins. Or maybe your Design/Build crews are most profitable because you’re great at bidding and selling it, and the crews are crazy efficient.
Your reporting shows which of these lines to actively focus on expanding, which helps you grow the business overall. Chances are good you’re offering something to customers that you’re not really making money with. Seeing that through the data will allow you to reallocate internal resources (money spent on salary and materials) to service lines that make you more money.
Importance of accurate data
It’s awesome to pull reports and use those to make decisions. But there’s a caveat to this – the data has to be the right data.
What does that mean? It means that you must standardize a process across your entire company on how critical data is entered. If everyone has a slightly different way of entering the data they’re responsible for (like multiple crews tracking time, for example), you’ll get wildly varying results. As a result, your reporting suffers.
Consistency of these processes and inputs is crucial. You need to move leads to proposals, reject proposals that are dead, make sure your teams are using timesheets accurately, etc. in order to get good info OUT of your system.
If that information is flawed, you’ll be making the wrong decision. The right decision based on the wrong data is still the wrong decision for your business.
What to look for?
The thing you really want to try to identify in all this data is trends. What is happening? When is it happening? Where is it happening? And you use those trends to try and determine why things are happening the way they are.
I’ll give you an example. I worked with an Operations Manager who tracked the number of service calls we had to perform. He looked at several things, however.
- What was the overall trend, year over year? Were we getting better or worse?
- What time of year were those calls coming? If they were all coming in late August into September, he knew there might be high grub populations, for example.
- Where were those calls coming from? If there were a disproportionate number of calls from one geographical area, he could drill down further. Was there a localized problem, like a weather pattern that caused a disease outbreak? Or was there a training issue that needed to be addressed with that particular technician?
He and I worked closely together (I was in marketing for the company at that time). We’d identify trends (like disease outbreaks or lack of rain in a particular area of our market), and send an email to those customers who were likely impacted.
Looking at the numbers allowed us to be proactive.
You need to have standard processes for the input of data into your business management software.
You should make decisions for your business based on what the data says. Try to remove your biases, look at the numbers, and make great decisions that keep your business running for years to come.
This data will help you make decisions both proactively and reactively that help your business grow. You can also use that data to look for growth opportunities that no one else in your business (or your competition) has yet identified.
Continue to Part 2 in this series – Why Tracking Profit Matters (1 of 2 for Owners)