[Monroe Porter]

Well I see my old PRO Forum buddy is giving quoting me and I received and email regarding a possible reply so here I am. As an industry consultant, I am pretty buried time wise but I don't mind now and then offering some opinions. What I did is take the time to make a pretty long post but forgive me if I do not have time to enter into an internet debate.

The only point I want to clear up is regarding Bill's comments is regarding a computer. I think a company of ten employees definitely needs to use a computer but they need to track the info in a simple format and keep it useful. I find many landscape companies have lots of info but do not do a good job of using it and many times it is not in a useful format. I also agree with Bill that you can do it by hand but a simple spreadsheet can run the math so much quicker.

The software industry has changed a lot in the last ten years and accounting programs like QuickBooks has more and more info a contractor can use. It is a better software package than one might purchase for 20k in 1980. The cost of cheaper software is making it harder and harder for special industry packages to keep up. My comment is that you just need to keep it simple. Focus on the big picture and don't look for a magic system. Software, cell phones and other tech stuff will not take the place of you being a leader.

You should run a profit and loss statement and balance sheet each month. It should compare year to date last year to this year. You should do simple job costing but look at the trends so you know where you make and lose money. Only looking at one job at a time is not very useful. You want to adapt your business according to the strategic information you generate. If you are losing money on sod, then raise your sod prices. If you make good money on pavers, promote more paver work.

One of the greatest values of computers is that they force discipline. In the old days you could generate a paycheck without social security number. With computers, no number, no check. Now the bookkeeper does not go nuts at year end trying to sort it all out and find the social security number.

I have been a consultant for nearly 30 years, since 1976. I have worked with a lot of industry even outside of the landscape, painting and roofing industries, which I currently run networking groups for. In the early 80's we wrote estimating guides for people like the concrete pumping industry and changed how they price work, we helped change how plumbing and hvac service companies look at billable and non-billable time. We also did a lot of work in the portable toilet business and that is why I told one of my chemical application PROSULT guys, that his business was just that process in reverse. Same truck, same routing, just one puts it out, the other takes it out. You have a route, a truck, customer service etc. Well why go into all of this? Of all the trades I have ever worked with, landscapers are the most difficult to get to take the time to pour through and learn the numbers. I have thought a lot about why this and would offer some comments. Please don't be offended by what I have to say, maybe my message may not apply to you. Remember I am talking about the broader industry as a whole.

Landscapers seem to come in two flavors(of course this is an extreme over simplification of it) The grass mowers who are the Frito Bandito kind of guy running from job to job, not trade focused and very entrepreneurial and the installers who tend to be designers and tree lovers.

I think the grass mowers tend to be very entrepreneruial and deal cutters. Mow this, maintain this, move snow, hustlers really. Their personality is to hustle work. The thrill of the hunt, not lets look at the numbers. To make matters worse, if you work hard and hustle, you can generate a fair amount of success for a guy with a mower and make 50k or up a year. It is when they get off the mower the numbers are so hard to make work and since so many people in the industry are kids with a lawn mower, they convince themselves they cannot raise prices.

The landscape installers are very visual folks, many with a design or horticult background. Many love the industry and unlike other contractors such as painting and roofing, which can be perceived by the public as a step above mildew and tar, has a certain amount of societal respect. However this love of the business and diversity of products can bury installers in a sea of time buying, designing and selling jobs that is very hard to get compesated for. Being visual also impacts learning and that is why landcapers must visit other people. This one of the reasons people succeed in our networking concept as they can visit other people and see how they are doing. Landscape installers must know how long it takes to design and sell jobs and control that costs.

Diversity also hurts the industry. One of the founding principles for successful business is what is your core competency? 3M uses innovation and research, Walmart purchasing and inventory control, and PROOF Management its ability to use simple and common sense business approaches. To truly succeed, it is important to stay with what you know. Landscapers seem to let the customers and diversity drive the market. Yes, we can cut your lawn, apply chemicals, trim trees, install irrigation, plant trees, do decks, retaining walls, lay sod, push snow, apply chemical salt and by the way we are thinking of Christmas lighting decor. Such complexity drives up overhead and confuses the process of making money.

Because landscaping is so entrepreneurial it seems to be full of magic bullet systems and solutions. There is no magic bullet and being distracted by the idea of the month and keep you from succeeding. In 1987 we started a networking group for painting contractors. At that time I had traveled over a million miles teaching seminars and I did not need to see any more airports. The business started gradually and because I did not need the networking money to live on, we learned a lot and adapted in the process. One of the greatest things I learned is that contractors don't need more ideas, equipment, software or other stuff. They just need to implement what they already know. So the same guys meeting year after year drives accountability and each group puts goals up. Contractors are also lonely, so making friends means you want to see others in your group succeed. One of the reasons I do not post as much on the internet is that there is little or no accountability. Anyone can be a giant in there own mind as they post stuff. Busy business people info they can use and trust. They get bored with all the BS and opinions that don't count.

Industry practices of trippling the price of a tree and so much per square foot or cut mistakenly create the image that people are making more money than they do and they are not really looking at the big picture. People also justify buying new equipment when they really can't afford to. One of my basic business philosophies is that you need to make money to grow, now grow to make money. We have landscape people who do as little as 300k a year in their business make 100k income from it. If you are not making money at 200k in sales, you probably won't make money at a million. Growth is not your friend. The more your grow, the people, cash, equipment, and leads needs grow also.

So where am I going with all this? You have to take time to do learn the numbers. No matter how good you at other things, that is the foundation that will drive your business success. It is not hard but you just have to take the time to do it, until people do, they are driving with no road map. You actually do not have to dig through the files and numbers yourself, someone who works for you can but you must understand what answers you are looking for.

What is ironic, is that many people see me as a numbers guru. I would tell you that is probably my weakest management skill but I am good at because I work at it and force the clients to take the medicine. Knowing the numbers is the first step to business success and if you do not take time to learn and use them, all else is much harder than it need be. For example, firing a foreman can be tough but if you know day in and day out that person is losing money on their jobs, it is a matter of facts not emotion.

So I am not againts systems, what I am against is complexity that misses the big picture. If a palm works for you, use it but it is just a tool, not the answer for solving your business problems.

My messages is pretty simple. If you work too many hours and don't make enough money, it is probably a business structure issue, not a gadget or new idea issue. Don't let the stress of your working too many hours and not making any money cause you to try magic bullets or the greatest manager who will help or whatever. Your stress is a symptom of a problem and failure to fix that problem and only through bandaids at it, will just make it worse.

If you would like to know more about our networking groups and talk to me personally, simply call me at 800 864-0284.

Monroe Porter
PROOF Management-PROSULT Networking Groups
www.proofman.com

[Paul]

Ok so we have 3 classes of people in the industry.

The owner operator
The designer
The manager

Starting with the Owner Operator, one that wants to stay small, feels he can't get the same quality from others as he gives, worried about his prices because the guy down the street charges $5 less than he does.

The Designer, prides himself on the quality of his design, makes sure every detail of the job is perfect, knows every tree, shrub and perennial, and is hands on at every turn of his company.

The Manager, he makes sure things are done on time. He fights suppliers, construction schedules, LA's, weather, and anything else that can go wrong.

I fit into the last category, I could careless how a plan is drawn, what material that is used. My job is to install it as shown on the plan. The job comes down to how much time it's going to take and to use the best people and tools to get it done. I watch the bottom line. Not of each job but of the whole company. I just don't rely on my computer but it gives me a daily or weekly or monthly report of what is happening. My estimates show how much time I figured from passed history of doing that type of work along with prices that I purchased material to fuel that is used to complete it. Overhead is worked up from last years along with what is projected for this years. I unlike others figure my salary in from the start so my bottom line starts with a minus every year. Profits are rolled back into the company for things like new equipment or or improvements. My accountant comes in every quarter and I have a meeting with him at the end of the year along with my tax attorney.

As I said before my time costs money not only for me but for the company. If I can do it any faster with a new program or gadget I'll demo it, if it works great if not it with be returned.

[Paul]

I should have added this in before, The company don't do anything but installs, and thats limited too we don't do irrigation, or mowing. Large Tree work is subbed out, we did do mass dirt work but the larger excavator in the area have limited that to very special work.

[Terry D]

Monroe is full of good sense. i hated it when he quit posting on the PRO forum, we are lucky to have him drop in here for us.

He used to get so pissed that a landscaper wouldn't hesitiate to drop 30K into a pick-up truck but frown at paying $3,000 to learn how to run a business.........so true.

[agla]

Excellent post.

[Lawn Lad]

The toughest thing for me to do is look at things simply. I tend to overcomplicate. I've searched for the magic bullet as Monroe puts it... but have found that being smaller before larger and concentrating on running the business tighter and smarter is a lot wiser and easier than growing for the sake of growth.

We're in the process of trying to simplify our paperwork/systems. I've adapted the mentality that if I can't sustain an action long term, I won't begin doing it. Just because it seems like a good idea and I think I can do something this week/month or this one time, if I can't sustain a policy or method of operation, I won't do it. This has helped to cut the fat and keep me focused. We still wander here and there a little, but being more focused has brought better profits with less headaches.

Scheduling/planning are my biggest weaknesses. Until I overcome this problem I won't grow the company significantly since I will just be chasing my tail.

I think one thing that is worthy of mention, and often an overused cliche represents the sentiment.... the definition of insanity is doing the same thing over and over expecting different results.

In order to overcome a weakness you have, first you have to be willing to identify it and then want to change it. Being able to change often takes outside influences to help in the process. Simply leaving personal change to discipline and will power is tough. If we all had will power 50% of American's wouldn't be overweight, nobody would smoke and we'd all exercise 30 minutes four days a week. Seek help from others when trying to change habits, learn new managment techniques, etc. The point was made earlier that spending $30K on a pick up truck is made without a second thought but spending $3 or $5 K on professional development through classes, consultants or otherwise is often scorned.

It's tough to overcome your weaknesses, but the best way to do is to take them head and conquer them so you no longer over compensate in other ways to make up for them. You loose balance in your business when you try to make up for it in other ways. Outsourcing is another good method to gain professional expertise at a lower cost. I've hired my accountant to take on more of the quick books training and oversight to help me get to the point where we can believe our P&L's. It's a process and doesn't happen over night. Just start working on it if you want to see changes.

By the way... great thread. Glad to have Monroe's comments/thoughts here.

[Bill Schwab]

Lawn Lad:

You have some great points in your post. If one cannot identify what need be changed, then it is not possible to see a change must be made.

What I have done is taken a steno pad and wrote titles of takes money, makes money on top. Tools and equipment to use in the field are under the makes money catagory, with an asterisk
next to frequently used vs collects dust most of the year. Anything that collected dust was sold off and we rent if needed.
Pick up trucks were definitley on the make money side.

On the takes money side, was seminar fees, computers ansd software, most tech items, and most anything that claimed to save time. The reason I did it this way is because there are thousands of software/tech companies who claim to revolutionize how you do business. This misleading sales pitches of how much time and money you will save are thrown arouind on a regular basis to gain sales. The reality of it all, in the size operation we ran at the time, and the size many cmpanies begin with, is scheduling and even QB software does not intially save you that time that is so frequently boasted. We got rid of our scheduling software and kept QB, and are going to upgrade to Contractor Edition and use a $20.00 white board to schedule work. It only fails when marker runs out of ink, it does not hold our company hostage as softwares can and will often do, and works so well I cannot say enough about it.

There will and is rapidly comming a time, when our operations will make sense to add more tech gizmos, and a person who will operate them so we can effectivley see numbers and schedule jobs efficiently.

Based on past experiences, I place adding a network low on my list of priorities, as this is defintily on the "takes money" side of my list. Equipment on the other hand that can and will reduce the one wild card we all have (labor) is most always worth the investment so long as that equipmwnt is fitted properly to your operation. You can also go crazy on equipment, and I catagorize this as "extension to manhood" items. Items you don'y really need all the time, but man, is it cool to let everyone see it sitting on your jobsite or trailer. I think one of the biggest mistakes lawn companies make is the ever increasing need to buy the biggest baddest Z rider ever made, when all they really need is a couple Standers, or walk behinds. Or that construction company, just starting who absolutely has to own thier own skid steer before they have a compactor or brick saw.

Every situation is different, but one thing is pretty standard. most companies began with a wheel barrow and a pick up truck. Weigh your new purchases very carefully. With only one job running at a time, there is no need for a network of technolgy, 4 programs for design, bookkeeping and scheduling, or alike. You can run just as efficiently using a .10 pen and .01 piece of paper and save the money for in field money making tools.

[jwholden]

I read Monroe Porter's article in the April issue of Pro today and agree with him 100% about the three types of customers; the "give me's", "maybe's", and "no's". This is becoming clearer and clearer to me the longer I am in business.

I particularly liked his solution to dealing with questionable leads.

I'm not trying to put words in Mr. Porter's mouth, but I recommend you read his piece in the April issue of Pro if it's still on the shelf.

[Rex Mann]

I would much rather have a solid "NO" from a prospect than a "MAYBE". A no, albeit not want I want, allows me to know how to proceed. A no gets filed away in dead leads. Where a definite very solid maybe gets filed.....well.....where? To me a maybe is a euphemism for "we are shopping for the cheapest price".

Now, I put all my maybe's into the dead lead file. I waste no more time on them.

Anyone have a link to the article?

Peace,


Rex

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