Balancing Your Expenses vs. Profitability

Owning and running a business is not for the faint of heart. It’s a constant balance between what you really need now to operate efficiently and with profit, verses what can wait.

So often, as a business consultant, I see business owners make the mistake of doing things out of reactivity based on an upcoming job, instead of taking the time to think the whole project through. Same for how they operate the whole business, what they need now to be efficient and profitable is not what they normally have in place.

The truth of the matter is, it’s all a fine line that has to be walked consistently. Expenses have to be balanced in order to sustain profitability. Which leads to the question – what does that look like exactly?

Profitability in the lawn care and landscape industry starts with recognizing three things:

  • Should you be paying rent for your building or owning it?
  • Does that piece of equipment really need to be bought or rented?
  • What should your overhead look like – in the office and in the field?

So let’s break each one of those down and do a deep dive on why they are important!

Renting vs. Owning a Company Building

At the start of a business, renting may be the best and/or only option. But once a business has been running for a while, it’s time to re-evaluate the situation. With interest rates at their all time lowest ever, it’s time to consider applying for a loan to own your own building. When you take this first step, you’ll be able to see what’s for sale in your area and see if purchasing can reduce what you are paying out monthly. Maybe it won’t be significant enough to take that leap, but then again, it may save you 10k a year. And that my friend, can make all the difference to a business! #taketheleap


Pro Tip: Start stashing away 1% of all your regular monthly sales income and put it in a “Building Account” at the bank. This will be your down payment!


To Purchase Equipment or To Not….. That Is THE Question

When considering whether or not to buy a piece of equipment, you should ask: “are we going to use this machine more than once?” If the answer to that is no, then rent it. You should also consider renting if you are only purchasing a piece of equipment for a job that is not a part of your normal services. Don’t just buy a piece of equipment to “buy” a piece of equipment.

Other things to keep in mind – make sure you are not too equipment heavy. If there’s an excess amount of equipment sitting around not being used, broken down, or just all around was not a good purchase from the start, then you are bleeding money. Get them cleaned up (or fixed) and sell them off.


Pro Tip: Don’t go out and buy a new piece of equipment for a “tax write off.” If you don’t need it, don’t buy it. If you’re accountant says you need to spend more money, pay yourself more. Don’t invest in something you don’t need just because someone else told you it was a good idea.


Overhead: Number of People You Need Based On Revenue

Think quality over quantity. Who do you really need in the office and out in the field in order to be effective, efficient and profitable?

The best way to answer this question is by looking at your revenue. Example: If there’s 4 sales people in your office and you are only doing a $1 million in revenue, then cut your number of sales people in half.

Another way to cut overhead is by implementing an industry specific software. With the right kind of software in place, one person can run the back end of your business successfully.

Lastly, consider chatbots. There’s a bot for everything now days. You can attach a bot to your website and anyone who pops on can request information. This is also a great option for quotes/measurements. Lawnbot is one of the bots that can measure a potential customers lawn online instead of sending a person out to the property, giving your business the ability to quote jobs on the go and in a quicker more efficient manner.

No matter what you decide to evaluate in your business, remember this, if you aren’t balancing your expenses and working toward profitability, then you’re working for nothing.


“A financially healthy company is a result of a series of small daily financial wins, not one big moment.” -Mike Michalowicz