Planning for Profit

“In the past we’d always done more elaborate functions like catered dinners and hockey game outings,” Vander Slik tells. “This past year we scaled it down and had a potluck right at our facility. It went over really well. To be honest I didn’t think it would be a hit, but it was—and I am glad to admit that I was wrong. I’ve learned that events like this don’t have to be big and flashy to be effective. Now we’re looking to do one or two of these potlucks a month. And I’ll tell you, doing two a month won’t cost us as much as one big outing had cost in the past. This has been a great change and a positive means of team building for our company.”

Teaching Your Employees About Profit

Most highly profitable contractors will attest that the biggest change you can make in your company is teaching employees about profit and how their performance can affect it. “Three or four years ago when the industry was really growing, topics like company profit were the elephant in the room,” Vander Slik says. “Now we’re having weekly meetings on where our numbers are.”

The concept of open-book management puzzled Vander Slik at first, but now he’s learned that when employees see the company’s goals, they want to help the company reach them.

The same type of culture shift is happening at Morin’s Landscaping. “The Working Smarter Training Challenge has helped create a huge awareness and understanding of our need to be efficient,” Morin says. “Employees are focused on costs like never before.”

At the crew level, there is a strong emphasis on man-hour goals. “We have a scoreboard in our dispatch room that account managers continually update,” Morin explains. The scoreboard shows budgeted vs. actual man-hours for each job. Everyone can see how everyone else is doing, creating an added incentive in the way of peer pressure.

At DJ’s Landscape Management, every department has its own production goals which tie into the company’s main goals of revenue and profit. “It’s important for all employees to understand that each area of the company plays an important role in our success,” Vander Slik says. “How does an individual crew help? By not having to go back to a property to fix something that was missed, or by not going over its budgeted hours, or by properly operating equipment that helps prevent unnecessary wear and tear and breakdowns.”

Incentives take it one step further, but can also create a level of complexity that can backfire on you. These contractors offer one word of advice: Keep it simple.

“In the past we’ve given out bonuses to everyone in the company,” Sellers says. “I’d usually take 10% of our net profit and distribute it according to attendance. Now I want to come up with something that rewards people for their productivity. The challenge is coming up with a plan that isn’t so complicated.”

“Right now we have quarterly incentives that help drive both top-line and bottom-line performance,” Vander Slik says. “We work off of historical data to create realistic projections. It’s working, because we beat our projections by 10% last summer.”

Although the challenges of fierce competition still persist, all three of these contractors agree that business conditions are improving.

Regardless, the internal changes they’ve implemented and profit awareness they’ve created are what will continue to lift their companies to new heights.

Learn how you can transform your company into a lean, productive and passionate organization that can continue to be competitive for years to come by visiting GreenIndustryPros.com/WorkingSmarter, or call 920-563-1614.