“An industry leader is only as good as the lessons they learn early in their career.” -Adam Linnemann
Back in 2004, Linnemann Lawn Care and Landscape had the opportunity to bid on a job to maintain all of the Chili’s restaurant lawn care and landscaping. It was like a dream come true. Putting this bid in meant that my company would be known as the landscaping company who maintains 14 locations in the St. Louis area. Wow, what an opportunity…..or was it?
Looking back now, I can tell you that we lost a substantial amount of money. While I put in what I THOUGHT was my best estimate to service all the locations, it still did not afford us a profit on this type of job. When you are driving hundreds of miles to service all the locations in Illinois and Missouri, it takes more time, gas and effort than you realize.
So if you didn’t catch it, we got the job and serviced all 14 locations for Chili’s Bar and Grill in the St. Louis area, but before we realized it, we were bleeding money and had to make a decision on what to do next.
Takeaways from Chasing Top Line Sales:
What we know now that we did not truly understand back then, was that we had not taken into consideration cost, breakeven and selling price to EARN A PROFIT. There was so much unbillable driving time. When quoting this job, I had not taken into account all the time that would be spent driving from one location to another and it was eating away at my bottom line.
As you can see from the graphic, there’s so much I was not taking into consideration back then. And because of all the lessons I learned from this job, it’s now the example I use when teaching the Profit First Method and how to STOP chasing top line sales.
Don’t fall into the same trap! Instead, here’s my advice – If you’re a $200,000 company or even a $4,000,000 company, you need to REALLY know your numbers. The size of the company does not matter when it comes to PROFITABILITY. We’ve seen $4 Million companies that are not profitable at all.
What makes you profitable is understanding your numbers and evaluating how you are quoting jobs and using your teams to grow and scale the business. Here’s what one of our clients just told us…
He was able to negotiate his insurance cost down $12,000…what a huge win!
He is now paying himself regularly! Woot Woot!
He has set a really neat goal of buying a new Jeep with CASH from his Profit Account, and he’s well on his way!
He’s now getting a 30% deposit up front on landscape proposal for materials, getting another 20% the starting day of the job, 40% when half way through the job and the remainder 10% when the job is complete!
Profit First WORKS and brings CLARITY!
What you need to understand is that Profit First is NOT an accounting system. Profit First is a cash management tool that manages and channels human behavior. If you want to excel in your lawn care and landscaping business, you’ve got to stop chasing top line sales revenue and understand your COSTS.
Once you understand your costs and you start implementing the Profit First Method, you’ll be on track to making a profit.
Not sure how to get started? Join us in the Profit First for Landscapers Facebook Group. This is a FREE group where we teach business owner just like you how to setup and allocate their money into the proper accounts – we call this Allocation Day (the 15th and 25th of each month).
We’ve also got a FREE downloadable eBook you can read about how Profit First will change the way you do business in the green industry, so be sure to download that.
And if you still aren’t quite sure on the next step, join us at Kasel Rocks Landscaping Company in Allentown, Pennsylvania on July 10-12. We’re co-hosting a tour event with them to present Profit First For Landscapers in person and give a bit more in depth information on how Profit First works. If you are interested in learning how to become a more profitable business, this is the event for you! Private message us for details – serious inquiries only please as the tour is limited to 30 attendees 😀.