As the leaves start to fall and the season winds down, many landscaping business owners are thinking about wrapping up the year. But this is also the perfect time to look closely at where your money is slipping through the cracks. Profit leaks happen in every business. The difference between profitable companies and those that struggle is whether or not you take action to fix them.
When you identify and correct these leaks now, you can head into winter stronger and set yourself up for a more profitable spring. Here are some of the most common profit leaks I see in landscaping companies and how you can fix them before year's end.
Underpricing Services
When reviewing job costs, do not just look at totals.
One of the biggest leaks comes from pricing jobs too low. If your bids are not covering labor, materials, overhead, and profit, you are leaving money on the table. Take time this fall to review your pricing structure. Compare estimated job costs to actual costs. If your margins are thinner than expected, it is time to adjust your pricing model for next year.
Pro Tip: When reviewing job costs, do not just look at totals. Break it down by service type: mowing, cleanups, installs, snow work. You may find one area is consistently dragging down your profit while others are healthy. Adjust pricing or process on that service first.
More about profits on GreenIndustryPros.comFind Profits in Processes - A look at how one Tennessee dealer has preserved profits without raising prices. The secret’s in the work processes. Top Five Ways to Improve Lawncare Business Profits - In the landscape and lawn care industry, there’s always room to increase profits by simply selling more to your repeat customers. Expanding Your Company’s Service Portfolio for Offseason Profits - Check out this guide of how landscape professionals can expand their portfolio of services into other areas and/or seasons. |
Poor Tracking of Job Hours
Crews are the largest expense in your business. When job hours are not tracked accurately, labor overruns eat away at profit quickly. Make sure you are comparing estimated vs. actual hours for every project. Use tools like LMN or QuickBooks Time to keep your crew accountable. The goal is not to micromanage but to see patterns. If certain services or crews consistently run over, you need to re-price or retrain.
Uncontrolled Overhead Spending
Put a reminder in your calendar to review overhead expenses every quarter.
Fall is the season when many business owners realize how much they have spent on equipment, fuel, and other overhead. Take a hard look at your expenses. Do you have subscriptions or tools you are no longer using? Are there purchases that can wait until next year? Reducing even small recurring costs can protect your bottom line.
As Sahra Linnemann at The Green Executive says, “Count your pennies and the dollars will follow.” When you build the habit of paying attention to the small expenses, the bigger financial wins tend to follow naturally.
Pro Tip: Put a reminder in your calendar to review overhead expenses every quarter. Small recurring charges often go unnoticed. A quick 15-minute review can free up hundreds of dollars a month that go straight back into your profit account.
Ignoring Maintenance and Repairs
Equipment downtime is a hidden leak. Skipping maintenance might save money in the short term, but repairs and lost productivity cost much more later. Schedule end-of-season maintenance now so your trucks and equipment are ready for spring. Preventive care is one of the simplest ways to protect your profit.
Not Planning for Taxes
Taxes should not be a surprise. Profit First makes sure you are setting money aside regularly, but now is the time to double-check your allocations. Meet with your CPA before year-end. They can help you plan deductions, review payroll, and make sure you are not giving away more than necessary to Uncle Sam.
The Bottom Line
Profit leaks are not always obvious, but they are always costly. Fall is your chance to patch them up before the year closes. Take a few hours each week to review pricing, labor, overhead, and tax planning.
The more disciplined you are now, the easier next year will be.
