How Efficient is Your Landscape Company?
One of the stereotypical characters found in old sitcoms was the fussbudget-y, super-uptight ‘efficiency expert,’ usually a skinny, highstrung fellow in a buttoned-down suit and bow tie, hired to come into an office and ‘improve’ things. All he really did, though, was cause chaos, at least until he got his comeuppance at the end of the half-hour, when everything went back to normal.
But in the real world, efficiency is no joke. Any business needs to run as lean and mean as it can in order to stay afloat and, hopefully, make a profit.
Landscape operations are no exception. You might, or might not, want to hire an expert to help you increase your company’s efficiency. Or, all you might need is to make some simple adjustments in the way you’re doing things.
Have a budget and a strategic plan
Lawrence Coronis is a green-industry business consultant and leadership coach who works out of Wilton, New Hampshire. He’s called in when a contractor needs the kind of advice only someone with more than 30 years of experience running his own successful operation can give.
“A landscape company is a very hectic business,” said Coronis. “Every day, we’re at the mercy of the weather, and that can cause us to change plans suddenly. We don’t always have the best help, because we’re dealing with laborers, who don’t always show up. And we’re handling living things—plants.”
There’s so much going on every day in a landscape business. As a result, company owners can get consumed with running around putting out fires, instead of creating more fireproof plans.
“A lot of contractors are highly skilled technicians, great at horticulture, building patios or designing landscapes, but that doesn’t mean they’re necessarily good business people,” said Coronis. “That’s a whole different acumen.”
One of his main missions is to get owners to see that every minute not spent doing revenue-accruing work is costing them money. To get the point across, he uses these numbers: if your company’s average year-end profit is three percent, then just 14.4 minutes of each eight-hour day is profit. If it’s six percent, then 28.8 minutes of the day represents profit. At nine percent, the number of minutes spent making money is still just 43.2.
Shocking, isn’t it? Obviously, you need to increase the amount of time you spend earning money. To do that, you need a strategic plan, with a budget as a road map.
Rob Kennedy is general manager of landscaping at Jaxtimer Landscaping, LLC, in Cape Cod, Massachusetts. He convinced the owner that it was time to bring in Coronis.
“The biggest difference he made for us was in helping to create a budget. Our old chart of accounts was crazy—there were 1,000 columns. He simplified it, and now it’s easy to track things, and get reports.”
Do job costing
“A lot of contractors don’t accurately track their non-billable time,” said Coronis. “And even if they are tracking it, and doing job costing for each client, they aren’t communicating that information to the foremen and the crews very well.”
Tom Morris, co-owner and president of Morris Lawn Maintenance in Hampden, Virginia, is very aware of his non-billable time. “When we go to a job where we stay all day, we do well,” he said.
“But on the days where we’re hopping from job to job, with a lot of small residential stuff, it’ll take us down to 55 percent billable time. The non-billable hours are what kill us.”
This is why job costing is so critical.
Kennedy explains how it’s done. “When we do an estimate, we plug in how many man-hours the job is going to take. The foreman will have a job costing sheet, and every day, he’ll input how many man-hours were used, and sees how many are left to complete the job.”
“Say we’re doing a ten-zone irrigation installation. The foreman knows that he has 47 man-hours to get the job done. On day one, the crew puts in 18 hours. After that first day, the foreman knows whether or not there’ll be an issue with that time budget. It’s good to get to the problem early, rather than wait until the end, and find out you’re 30 hours over.”
For maintenance work, Coronis suggests using a scorecard system to track the time it takes the crews to service each client. They should be posted under each foreman’s name, in the scheduling room, where both managers and crew members can see them.
Here’s how they work. A mowing client is budgeted at five man-hours, but this week, the scorecard shows that the crew took six-and-a-quarter hours to finish. The following week, the same crew took only four-and-ahalf hours.
“The scorecards are powerful,” Coronis says. “You’ll start noticing patterns, and get clued into things, like, ‘Maybe we need to help this new guy; he’s slowing that crew down.’ It’ll never be perfect, because some weeks are very hot, or wet, or the grass is very tall, and takes longer to cut.”
Jaxtimer uses the scorecard system. “Each foreman can see exactly how he’s doing, compared to the others,” said Kennedy. “It really gets them thinking about how they can be more efficient.”
Routing and scheduling needs attention, too. “Scheduling is key,” said Kennedy. “Every Thursday, I have a production meeting with my management team, where we make up a schedule, and put it on clipboards in the foremen’s room.”
In the morning, the foremen pick up the clipboards. Listed on them is where they’re going, which vehicles they’ll be taking, and what materials will be needed.
As for routing, it’s important to spend time thinking about the shortest, most efficient paths to the properties being serviced. Software is available that can help you do this.
A routing program is just one example of the new technology that’s been developed for the green industry. Bruce K. Wilson, owner and principal at Bruce Wilson & Company, a green industry management consulting practice advises contractors to adopt it.
Morris is using GPS technology to cut ‘windshield time,’ the unproductive minutes spent driving to and from jobs—or elsewhere. “We’ve installed these units in all of our trucks. It gives us breadcrumb trails, so we can go back and determine whether our routing is accurate, or if there are stops that aren’t being accounted for.”
The GPS tracking made a big difference between what his employees used to get away with, and how they behave now that they know they’re accountable. “It’s amazing how many 7- 11 stops we had,” said Morris.
Jaxtimer is going to start implementing a geofencing and timekeeping program this August.
More and more companies are using technology like this. If you’re not taking advantage of new innovations, but your competitors are, aren’t you giving them an edge?
Hire the right people
One of the mistakes Coronis made early on in his own business was in failing to hire a highly recommended foreman, because the man wanted more money than he was willing to give him.
“You need to hire and retain the best people you can find, even if they cost a premium, especially at the foreman level. With a strong foreman, you’ll have higher quality work, better customer satisfaction and fewer callbacks.
The dividends go far beyond any extra cost.”
When a company’s morning startup is less like a race and more like a lazy Sunday, with people standing around drinking coffee, “That’s just a symptom,” said Wilson.
“The root cause of that is a dysfunctional management team. They’re disorganized, and so the business is, too.”
If the owners or managers themselves show up at the last minute and aren’t prepared for the day, their lack of preparation spills over to the crews, who are then late leaving the starting gate. The day’s just started, and the owner’s already lost money.
Contrast this with Morris’s approach. At the end of each day, crew members start prepping for the next one. They fill up their vehicles and gas cans at the company’s own gas pump, eliminating the travel time to gas stations. Maintenance on vehicles and equipment is done at night.
When the guys clock in the next morning, their routes are already figured out. They’ve got about 15 minutes to grab their paperwork, load up a couple mowers and a handful of hand tools, and be on the trucks, ready to go.
To get around having to spend time loading and unloading equipment at the day’s end, Coronis suggests giving each crew its own enclosed trailer. A side benefit is that the sides function as mobile billboards for the business.
The tools in each trailer are colorcoded for the foreman who’s responsible for them. This cuts down on the ‘someone took my blower’ problem.
“They’re a big improvement over the old open trailers that we had to unload every night,” Kennedy said. “That was a big time-waster.”
Ditch that aging equipment
Your equipment could be dragging down your productivity. Some companies have a ‘use-it-’til-it-dies’ mindset.
Wilson says that’s a mistake. For one thing, as landscape machinery continues to evolve, it keeps getting better, faster and more fuel-efficient.
“Companies that live with aging fleets have more lost time due to unproductive equipment and breakdowns,” he said. “The outfits that are always buying and leasing new equipment, turning them in after they’ve racked up a certain number of hours, are just more efficient. Old, beat-up equipment kills efficiency.”
It also affects morale. It’s a more subtle factor, hard to measure, but Wilson says people who are given good equipment to use feel better about their jobs, and work harder and faster.
Ask for help
If, after taking a good, hard look at your operation, you think you might benefit from some advice, there are several ways you can get it. Joining peer groups such as the National Association of Landscape Professionals (NALP) or your local or state trade group will put you in contact with other contractors who’ve been where you are.
Or, you may decide that it’s time to bring in a consultant like Coronis or Wilson. Doing so has paid off for Jaxtimer. “Our company’s going through the roof,” said Kennedy. “Sales are way ahead of projections, and our company culture and morale have taken an uptick. It’s really turned our company around.”
How efficient is your operation?