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Stop losing profits!



Are you throwing away potential profits? Or worse, doing jobs at a loss and not even realising? Maximising your returns from every job is critical, especially in the current economic environment


An unavoidable consequence of growing a successful landscaping business is that the owner gets squeezed for time. Staffing challenges, customer relationships to manage, bills to pay and quotes to prepare. It’s all go, all the time, and there is very little time to spare. Sound familiar?

Something we see far too often in this scenario are businesses that are so busy quoting and delivering work, that they don’t make the time to back cost and monitor the actual profits they’re making.


The ‘assumptions’ that you worked off when it was just you and a couple of staff probably don’t hold up now that your team has grown. More often than not, businesses are making far less than they think.


For example, a business owner we worked with recently had no idea what actual margins they were achieving. He thought they were achieving at least 33% profit, but that was based on feelings rather than facts. When we did some analysis, we discovered that the company was only achieving 25% (and they were wondering why things seemed to be getting tight, even though they were busier than ever).


With discussion, we agreed that the pricing process needed to change a bit and that the target margin needed to increase to a minimum of 35% (even though I was confident that they should be able to achieve at least 40%).


The new pricing process involved looking at the ‘real’ costs of delivering recent work, and ensuring they were pricing new jobs based on the teams actual level of productivity – not what it could/should have been (hint: his current, larger, team wasn’t as fast as he was when it was when it was just him and one other guy).


They implemented this and a follow up review has shown a new average margin of 47%! That’s nearly double the profit – for no more work. Imagine that in your business!


The result they achieved was in large part due to a more focused approach to ensuring jobs are not just won and delivered – but done so at an appropriate profit margin.


If you haven’t reviewed your actual profit margins in a while, I urge you to do so soon. In all likelihood, you’re leaving profit on the table that should be yours. Bottom line – you’re working harder than you have to, to achieve the results you’re getting.


If you’re not sure how to do this, and/or feel that there are other things that could be worked on to improve your profits, reach out to us and we can have a chat.


Also go and grab our free report from our website below – it’s called ‘5 Reasons Why You’re Working Too Hard – and Missing Out On Extra Profits’ – and if that title feels like it describes you, we know you’ll love it.




This article was written by Mark Skelly, a director of Red Hot Business Coaching and President of Hutt Valley Chamber of Commerce.


Keen to get in touch? Contact him via www.redhot.co.nz

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