Carolina CAT and the North Carolina Nursery and Landscaping Association (NCNLA) hosted a Landscape Management Workshop in February, which offered participants the opportunity to learn how to make the most of their landscape business. The two-day event, held at Carolina CAT’s facility in Charlotte, N.C., was designed to give landscape contractors and nursery managers the guidance and know-how they need to optimize their business operations, become more sustainable and as a result, more successful.
“Every contractor should start their year with a plan for profit, not just a hope,” explained Mike Lysecki, director, Landscape Management Network. “This plan is a simple operating budget which guides the owner to set profitable goals for sales and expenses. In just a few hours, owners are seeing problems that have escaped them for years. Based on this profitable plan, we’ll also show them how to create their own pricing system, customized for their own numbers, that recovers their costs, their overhead and returns a fair profit. Far too many contractors work all year — and they work hard — only to hope there’s profit left at the end of the year. There’s no reason to just hope when it’s so simple to build a plan to improve your success rate.”
Lysecki said that using their budget, every business can calculate exactly what it needs to charge for work, including rates for its crews and equipment, and markups for materials and subcontractors.
“Your budget starts with your direct costs — your labor, equipment, materials and subs, then your overhead costs. Once you have a profitable plan, you use your overhead budget to calculate how to price your jobs to cover your company’s costs and overhead — then you add profit. When you use a pricing system, any contractor can put their plan for profit into action, even if the owner itself isn’t pricing the work. Price your jobs following your system, hit your sales goals and manage your spending and your budget becomes reality. It’s a planning tool that enables contractors to better manage and control their businesses with real numbers instead of gut feelings and emotions.”
Carolina CAT Construction Sales Manager, Mike Tropsha, explained, “We were delighted to host this event, and are very proud of our partnership with the landscape and nursery industries. We believe the concepts presented in the seminar will improve our customers’ efficiency, help them understand and manage costs and ultimately provide them with a competitive advantage. We are determined to ensure our customers’ success by being a trusted partner, and are proud to be associated with an event that we believe will help our customers set themselves apart.”
According to Lysecki, prices are dropping, customers are shopping around more and the number of competitors is growing.
“The landscape industry, in particular, has low barriers to entry. Many laid off tradespersons in other sectors go on to start landscape businesses. To survive, and thrive, in this kind of competitive environment, you need to know exactly what your break-even is on every job. Far too many contractors price jobs based on history or instinct, without knowing for certain whether they’re actually making any money on the job. Then, to make things worse, their employees start working on the job without any goals to know whether the work is getting done on time and on budget. The quality of your business, and the quality of your life, improves dramatically when you can take control — when you know exactly when you’re making money, when you’re breaking even, and when its best to just walk away. Your budget is the ultimate system to help you read and react to changing economies, customers or competitors. With so many businesses operating without a budget, companies that understand how to use one enjoy an enormous competitive advantage.”
Lysecki said that local Caterpillar dealers, such as Carolina CAT, in partnership with state and national landscape associations sponsor most workshops.
“Every company uses a laptop and a web app so that creating a budget is simple. Each individual brings their own business numbers, they’re given a preparation package ahead of time, so that we work in reality. We’re not just talking about what they ’should’ be doing, we’re actually doing it with them. The instructors are contractors who guide attendees through the entire process from start to finish in two days. You finish your budget the first day. The second day you learn how to use your budget to create a pricing system, make informed decisions, motivate staff by paying-for-productivity and to monitor your company’s progress month-to-month.
“Having dealers like Carolina CAT host the workshop is a huge benefit to us and to the attendees,” Lysecki continued. “Not only do they minimize the costs for attendees, but they also inject some fun into the two days. We break from number crunching to clear our heads outside — Carolina CAT organized a skid steer obstacle course and several excavator dexterity challenges to get everyone up and moving again. Everyone from seasoned operators to bookkeepers took part and it was great fun.
“The workshops have been directed to the landscape industry, but contractors of all types have attended. If you’re in a service or contracting industry, then it doesn’t matter what service you’re providing — the budget and pricing systems are the same. The industry’s reaction has been almost overwhelming. We’ve done well over 100 workshops across North America and word-of-mouth is spreading fast. For most business owners, it’s the first time their company’s numbers have been broken down and explained to them in way that’s actually meaningful and, most importantly, useful to their business. Owners in this industry most often get into the business because they loved the industry and they were really good at doing the work. They are great at their trade, and can think on their feet, but most never went to school to learn how to operate a business. It’s really a unique and long-awaited opportunity for so many that attend,” Lysecki said.
“Landscaping is so much more than cutting lawns. It’s an extremely challenging field.” added Lysecki. “Our company, TBG Landscape, focuses on design-build projects, so it’s impossible to get bored. Every project is different and brings new challenges. In the same day, our crews will install 4-inch annuals by hand, then 40-foot trees with cranes and spades. We create stunning outdoor environments including trees and plants, steel structures, pools, custom carpentry, outdoor lighting and natural stone. We work with all the basic elements on earth, and all at one time.”
As for some of the biggest challenges in 2012, Lysecki said they include “raising the professionalism in the industry — differentiating reputable, professional contractors from so-called ’fly-by-night’ counterparts and utilizing some of the fast-emerging new technologies to allow contractors to work smarter and more productively. Price competition is a big sticking point in this industry, but no matter what your competition is charging, there’s room in every market for great companies. Our biggest enemy is often ourselves. If you can start with a plan for profit and eliminate wasted time lost to poor planning, poor preparation and poor execution, there’s room to compete on price and make a profit in any market.” said Lysecki.
Danielle O’Neill, events coordinator for Landscape Management, added, “One of the biggest answers is to set specific goals and have policies, processes and procedures that employees can follow. When goals are set and systems are in place, each person in the company is aware of their roles and responsibilities, and what needs to be done in order to achieve those goals. The owner’s expectations are common knowledge. Most contractors haven’t invested the time to create and implement systems in their workplace, and therefore, there’s nothing for their employees to follow. Employees are forced to lean on the owner for all the day-to-day problems and solutions, and an owner can only handle so much. When the owner is constantly putting out fires, he doesn’t have time to develop the business.”
O’Neill said that another way to landscape more profitably is to take the time to hire the right candidate for the job, the first time around.
“Many landscape contractors do not take the time nor do they have the resources to focus on a hiring process. When you take the time to find the best employee for the job early on in the season, it reduces the cost, headaches and re-training due to turnover throughout the remainder of the year.
“One of the biggest challenges is finding the right candidates early on in the season, and then developing and retaining those key employees throughout the year. As most landscaping is a seasonal business, the industry tends to see high turnover rates, but through training and development and an attractive incentive program, we strive to maintain key employees all year ’round,” O’Neill concluded.
Since 1926, Carolina CAT has been committed to the needs of its customers by providing superior parts, service and sales. Operating in eight locations throughout western North Carolina, Carolina CAT serves the construction, forestry, truck engine and power generation industries providing new, used and rental services. Seeing the value in the Landscape Management Workshop, Carolina CAT is considering another workshop later this spring.
Added Lysecki, “Whether you build or maintain landscapes, you’re creating an environment that your customer, and the general public, can enjoy for generations. It’s your “gift to the street” as a landscape architect so brilliantly summed up our industry. The challenge for landscape contractors is to create these gifts in win-win environment which rewards their customers, staff and themselves as owners. It’s not common in this industry to find companies who pull it all together. But a little business education goes a long way, and the letters and emails we get one and two years after the workshop prove that it can, and does, happen.”
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