Do you know where your money is coming from? Part 1

When we started working with Ryan at Mountview Landscaping, I asked him if he had a budget that they work from and review on a monthly basis, and was pleasantly surprised to hear his answer was yes. You may remember that we interviewed him last year about what they track, why they track it and the difference it has made in how the business is doing overall, as well as the impact it has made for him personally.

All of his insight was compiled into two blog posts and we felt it was worth revisiting. Check out part one below.

Grant: What do you currently measure on a weekly, monthly and annual basis and why?

Ryan: During the winter we track maintenance hours for snow, additional job hours from snow events, salt and ice melt product use on a weekly basis. This translates to lawn maintenance contracts during the summer season.  

We have people on a fixed schedule for snow with staff on duty 24/7. From a business point of view it just makes sense for us. We have people monitoring sites every single night so if we need to move a pile of snow, we have that scheduled already. If we get a small snow event that wasn’t forecasted we already have boots on the ground to put down ice or if snow melts during the day and freezes at night we have people who can take care of it proactively.

It protects us from a liability standpoint but also allows me as the business owner and our staff to sleep during the winter because they know when they are working. There are still large snow events where we will need all hands on deck but those are normally forecasted so our staff know in advance to expect a call. We lost a really great employee because of a lack of schedule one year and we made changes to prevent that from happening moving forward. 

Grant: How do you track all of this?

Ryan: We have a rolling hours spreadsheet. For example, we know we will have many more hours scheduled in August than we do in October. We have historical data and we break it down monthly and weekly. If we find we are 15% over budget in May we know we will probably be 20% over budget in August/September, so we can make adjustments sooner rather than later - when it’s too late to do anything about it. We’re currently working on adding AR/AP to our reporting as well.

Once the monthly invoicing has been completed we meet to review the P&L broken down by class (snow, construction, maintenance, lighting). We also look at our projected sales, our budget, sales goals for each division, where we’re at for the yearly goal so far, and check to see if everyone has been hitting their sales numbers.

We also measure what we’ve sold YTD and we compare it to what we were at last year as a percentage. Are we ahead? behind? It’s always at a percentage so it’s not about a dollar amount because I want sales goals to be up every year in dollars. If we increase it by 15,% for example, we need to hit what we did last year plus an additional 15%. If we hit $100,000 in March last year and we hit $100,000 in March this year, we’re actually behind by 15%

Twice a year we review the balance sheet as a management team and look at company net worth, how liquid is the company, etc - things that the bank is going to look at. We don't do much with the balance sheet on a monthly basis other than me reviewing it since it doesn't change much month to month.

We’ve been doing this for about a year and there is confidence in knowing your budget is right. The budget is the biggest thing for us and a large part of that is the man hours. We monitor hours we put in weekly and that tells us whether we are doing well or not. Knowing our hours also helps when it comes to estimates because we know the profit margin we are working with.

Click HERE for the rest of our interview with Ryan and more details on budgeting, profits and peace of mind. 

Questions? Email us at [email protected] or connect with us on Instagram @nextraconsulting