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Question: Do you have a recommendation for mobile time tracking for employee time and job time?
Answer: There are numerous systems on the market, and contractors using those systems often provide rave reviews. Check out some of them here: Stop Jobsite Profit Leaks.
Question: What would be the best treatment for grassy areas with ticks in northeast Wisconsin?
Answer: There are plenty of insecticides on the market that can help control ticks. But there are other things you can do to help your cause.
Ticks thrive in high-humidity environments. So try to keep the grass mowed nice and tight.
Question: What is the best formula to use that will help me figure out how many square feet a mower will mow in an hour?
Answer: We calculate our productivity at 80% to allow for overlap and trimming for a better quote of actual mowing productivity. Our calculations are done at a specific speed depending on the machine; we include productivity rates for all of our products in literature and on web pages.
We don't use transport speeds; we use actual mowing speeds. We do a conversion from MPH to Feet per Second. We multiply that by 60 to get it to a number for distance in a minute, and then 60 again to get it to distance for an hour. Then we multiply the width of cut in feet, giving us Square Feet Per Hour. We know that it is not likely you are going to get 100% cutting for the full width all the time due to overlap and trimming, so we calculate our mowing productivity rates at 80%. So then we multiply by 0.80 to get our actual productivity. You can then use that Square Feet per Hour or number to calculate Acres Per Hour ,or whatever area measurement you would like.
Here’s an example:
Machine Speed MPH = 8.5
Machine Speed FPS = 12.466667
Machine Speed FPM (12.466667 x 60) = 748
Machine Speed FPH (748 x 60) = 44,880
Machine Speed x Width (44,880 x 5 ft) = 224,400 Square Feet
Squared Feet x 80% (224,400 x 0.80) = 179,520 Square Feet per Hour
Information courtesy of Tony Weber with Schiller Grounds Care, maker of BOB-CAT brand mowers.
Question: We are a commercial grounds management, landscape and irrigation company. We have been in business 21 years with 20-plus full-time employees. As I determine whether or not to downsize certain aspects of our operation in our current economic environment, I was wondering if you have a formula for determining man-hour rates.
Answer: Many landscape contractors fail to correctly calculate their man-hour rate, resulting in either “over-pricing” or “working for a loss.” To figure out what you need to charge to stay competitive while also staying in the black, you need to identify three things: total labor hours you can bill in a month, what your labor costs are per hour, what your monthly overhead is.
Check out this quick video from PRO partner The American Landscape Maintenance Association (ALMA) that talks about how to determine your man-hour rate.
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Question: What can I say or do when bidding on commercial maintenance accounts knowing that the previous contractor didn't perform 90% of the spec bid requirements, and now the property owner compares my bid to that previous price?
Answer: The first suggestion is to walk the property with the prospect, pointing out the deviations to spec, and asking if he/she would like you to bid to the services being provided by the competitor, or according to the specs provided in the RFP. Make sure that you point out that the latter will be considerably more expensive, but also state that should the prospect have a budget limitation, you would be happy to design a program specifically to his/her needs.
If a site walk with the prospect isn’t possible, go ahead and walk the site yourself, camera in hand, photograph the deviations from spec, and in your proposal point out the discrepancies (with photos) with a price for duplicating the current service level, plus a proposal at the specified service level. Include a reminder that should budget be an issue, you would be happy to work with the client.
Never criticize a competitor because there is always collateral damage. Simply present you own attributes. When done well, you will always outsell the competition.
Special thanks to consultant Frank Ross of Three Point Group for taking the time to answer this question. For more information visit Three Point Group Consulting.
Question: If you are new to the business and have tried networking with some of the landscape contractors in your area, but they just won't share any information with you, how do you find out what the next guy is charging for his services?
Answer:
Here’s the thing: You need to figure out your own numbers. If you go ahead and charge $35 an hour when your real cost is $45 an hour, you are going to lose a lot of money.
Start with a simple expense budget. Include your truck, non-working owner’s salary, cell phone expenses, advertising and other basic overhead costs. Understand that these costs will change as your business grows and you spend less time in the field. Remember, most start-up landscapers are working two jobs: one in the field and one in the office.
Here’s an example. Keep in mind that this is only an example using very basic numbers—you need to run your own numbers to figure out your own scenario.
A truck with insurance, depreciation, gas and maintenance is going to cost you at least $8,000 a year. Throw in a mower and other tools and now you are looking at a minimum of $12,000 a year for trucks and equipment. (Gas and maintenance are really variable overhead items, but I am trying to keep this simple.) Of course, you can start out with used trucks and old equipment, but if you don’t put replacement costs into your price, you will never be able to buy new.
Even in a small company where you do the work yourself, you will have at least another $5,000 a year in non-field owner’s salary.
Cell and business phone is another $2,000.
Throw in other overhead costs like business license, office supplies and business insurance for another $3,000.
This puts us up around $22,000 a year.
Suppose you work 40 hours a week and 50 weeks a year. This equates to 2,000 billable hours. If you bill 2,000 hours a year, that’s $11 an hour for overhead ($22,000 divided by 2,000 hours).
Now let’s suppose you want to make $20 an hour. Now your cost is at $31 an hour ($20 an hour for you plus $11 an hour for overhead).
Throw in the seasonality of the business and you really may only bill 1,500 hours are year, making your overhead $14.67 an hour. Now you are at almost $35 an hour.
You are right, it can be difficult to determine what to charge because your competitors aren’t going to tell you. We teach a program that helps with this, and also cover it through our networking groups. Our “Knowing Your Numbers” CDs are also very helpful with pricing. Feel free to give me a call for some free advice.
Thanks to Monroe Porter of PROOF Management Consultants for answering this question. Email Monroe Porter or call (800) 864-0284.
Question: I have some bricks used for wall construction (they have holes in the middle) and was wondering if they would be serviceable as pavers if set in a 6-inch sand base with the solid side up. I have a lot of these bricks and would like to use them. Thanks, Bill Story of Rocky’s Lawn & Landscape
Answer: The answer would in most cases be no. The clay-face brick for vertical surfaces has not been fired long enough in the kiln to make it durable for pavement use. The face brick would typically start to swell and then crumble in most climates when used for pavements. The exception is always the climate. If dry enough and there is no freeze-thaw at the location they could actually last a long time. There is still a question of aesthetics and labor. To properly clean and set used bricks on edge (the no hole side) you get very little area covered with each brick and time, and even on a DIY project, time does have value. Photos always help in providing proper advice, so feel free to also visit The Hardscape Fourm
Stephen Jones, president of Pave Tech Inc.
Question: We’re three-quarters of the way through a very challenging year. What should I be doing right now to prepare my company for 2010?
Answer: Business is going to start picking up again next year, but it’s going to be a lot more challenging to earn that business. So when landscapers ask me for help these days, the first thing I tell them is to completely dissect their company and begin preparing for the worst-case scenario. The contractors who did that in the lead-up to this year are the ones who’ve done pretty well.
And it’s not just a review of your business. You need to do a personal review, as well. Many contractors got into this business because it’s easy-access. They are brilliant craftsmen but weak on business skills. This year scared the daylights out of them. They had to lay people off. They couldn’t get loans. A lot of them found out they didn’t have the stomach for all this.
Even though business will improve, there’s another dynamic at play. Both residential and commercial consumers have this certain fear. Am I hiring the right contractor? Am I paying too much? Do I really need all these services? Should I just put this money away in case I need it down the road?
Here’s the bottom line: You need to become a really good salesman. You need to convince customers that they should go ahead with the job—and that you’re the right person for them to hire. Yeah, you’ve always had to do this, but now you have to be really effective at selling service, responsiveness and value. Word of mouth is going to come back into play next year, and consumers are going to want to hear about your responsiveness and value, not just “boy he does good work.”
Aside from improving your selling skills, there are a few other areas I think you should look at.
LEADERSHIP – If you’re like most contractors, it’s going to take a lot of planning and effort to get your company moving forward again. Work won’t be handed to you like it maybe was in the past. Stay positive and keep fighting. You must inspire both yourself and your staff.
GROWTH – Don’t expect the dramatic growth spurts like you may have had in the past. You’re going to have to hustle and start planning for ways to grow right now. That’s why you need a strategic plan (like Jon Ewing just talked about). Where are we and how can we grow moving forward? You may need to try some new marketing tactics in order to find new customers—convincing them that now is a good time to invest money in their lawns and landscapes.
PEOPLE – Be very careful about who you hire going forward. Take your time. You need people who can multi-task and are willing to fight with you, not just collect a paycheck. The good news is that a lot of talented people are looking for work, so the labor pool you have to choose from is as strong as it’s been in a long time.
There’s no doubt that 2009 has been humbling for a lot of contractors. It has also opened up quite a few eyes. Things are going to get better in 2010, but it’s going to be very competitive. Start preparing for that now and you’re one step ahead of the game.
Thanks to green industry consultant Gary Goldman for answering this question. To contact Gary, call (508) 652-9771 or send an email to gmanaf@msn.com.
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