Change is a good thing!?
August 7, 2020
This spring and summer season will likely go down in our history books as one of the most surprising and challenging for entrepreneurs yet.
Together, we’ve navigated the ‘non-essential’ turmoil and crisis management of Covid-19 that weighed everyone down with uncertainty, panic and confusion. If I were to judge the success of adaptive strategies put in place, from the hundreds of conversations I’ve had with business entrepreneurs – especially contractors, I’d say that you all have earned your ‘stress management stripes’ – most with gold stars aplenty!
Through the past few months, as the impact and shock of the pandemic phases of community engagement have smoothed out, I set out to learn which of the ‘covid-required’ changed processes have actually turned out to be a benefit, and will continue going forward.
Let me explain where I’m coming from: Through months of weekly coffee chats in the Landscape Ontario Peer To Peer Network via zoom since mid March – I have learned that the pandemic shifted homeowner perception of the value in what we provide as a profession, driving up demand for our Members products and services.
Here are some examples recently discussed at a Peer Network online informal chat meeting with contractors to illustrate what I mean: I asked “what have you changed as a result of the pandemic, that your team and company will keep in place going forward – pandemic or no pandemic?”
- “A set of tools for each employee” - the positive effect seems to be that each employee takes better care of tools, leaves them behind on sites less often, tries to fix themselves if something breaks, or at the very least, asks for a replacement immediately (as opposed to leaving it in the bed of a truck or in a dark corner of the shop in a useless state of disrepair).
- “Handwashing stations in our enclosed trailers” – Appreciated by all staff, and used regularly, these are turning out to be a ‘must have’ that was never on the radar before.
- “The expectation of patience from our customers.” – In peak season, suddenly customers found patience and were willing to understand that we were doing our best. They didn’t move on give their work to the first company who could show up – they waited their turn and trusted they were on the list. I want to see this respect continue.
- “Using ‘cloud’ communication across the company” – Communication has improved… it’s more effective and efficient.
- “Staff taking their own vehicles to site” - In many cases, it’s more convenient for them to have their own vehicle handy all day, and makes scheduling maintenance sites of various sizes more efficient – we don’t have to have the same size crew show up on every site all day – they can start or finish or meet up mid day on bigger sites, then split up to do smaller ones where appropriate.
- “Answering the phone when it rings” – Through the pandemic, we were falling behind, and switched our process to put responding to phone calls as a priority. It seems that people want to talk to you more now than ever. (as of July) We’re booking into fall for irrigation installations and customers are willing to wait for our professional high-service focus. Our sales are through the roof.
This pandemic ‘season’ hasn’t been with its’ obvious challenges – especially managing the creeping in of complacency on PPE and physical distancing. I also asked the Peer Network members what the biggest challenges they are facing at this point. The most common concern is this: A second spiked wave of COVID-19 cases, causing another shut down to the core ‘essential/non-essential’ phase.
The epidemiologists have been consistently sharing the statistics of the probability that we may still have a bumpy ride ahead… which is a great reason to keep your red, amber and green budgets in mind. Yes, for many of you reading this, your sales are up and strong – which is great! I’ll ask you to remember, as I did the Peer Network members, to continue reviewing your numbers at month-end (at the very least) EVERY MONTH. With uncertainty still lingering in the air, it’s important to have a plan B and C, should things that are not within your control, create pressure on your company resources and cash flow.
I’m so proud of our Profession. I’m proud for all of you to have shown the grit and determination to keep moving forward in this unprecedented year! Pat yourselves on the back, celebrate successes, positive change and keep your eye on the prize – emerging successfully from this era as a viable company, with a viable, engaged team, and with viable profit.
Onwards!
Need help figuring out Plan B and Plan C? Get in touch and let’s talk.
Thank you for reading! Until next time.
Share this article with your peers
Other Articles That May Interest You:
It’s More About ‘Why’ Than ‘What’ you’ve done. Every now and then, I’ve thought about how many hours I’ve spent writing business columns and blogs since 2006. My guess is that I’ve written 200+ columns. Each column hovers around 1,000 words and takes a couple of hours to write, sometimes more. So, that’s like a 200,000 word essay – or a book (or two or three books worth – the average novel is about 70,000 words). And a lot of hours at the keyboard. But that’s WHAT I’ve done, not WHY. And since 2006, I’ve led and developed the Prosperity Partners Program for Landscape Ontario – two full day workshops about running a business - which I delivered to well over 800 business owners across the Province over about 8 years. That Program changed the trajectory for MANY small business owners. It also helped to provide a business blueprint for those aspiring to start a landscape business. But that’s WHAT I’ve done, not WHY. I know from 24 years of running my own landscape business, that it's easy to become overwhelmed with all of the responsibilities of running a business. And to feel alone. That’s why my husband Tim Kearney and I started the Peer-to-Peer Network for Landscape Ontario 11 years ago. And if I were counting the full day workshops and Summit’s I’ve delivered and facilitated for hundreds of Peer-to-Peer Network members, it would be north of 50 days – with another 150 days of prep and research. And a LOT of driving across the province. But that’s WHAT I’ve done, not WHY. And speaking of that landscape business of mine, we won 20 Landscape Ontario Awards of Excellence. But that’s WHAT I’ve done, not WHY. Since 2005, almost every year, I’ve been a speaker at the LO Congress Conference – to thousands of attendees, on topics ranging from engaging the team, business systems, setting goals, leadership and more. And as well, I’ve spoken at Landscape conferences and run full day workshops across the country. But that’s WHAT I’ve done, not WHY. I also sat on the Landscape Ontario Provincial Board of Directors and was elected to the Executive Committee. But that’s WHAT I’ve done, not WHY. Three years ago I took on the curriculum overhaul and continuous improvement delivery for the Employers of Choice program, with now over 300 business owners and managers working hard to implement that robust tool box for better HR management and employee engagement. But that’s WHAT I’ve done, not WHY. Focus On What's Happening Through You, Not To You. I recently read 'The Depressed Motivational Speaker by industry consultant, facilitator and long-time LO friend, Jim Paluch. And this month, I co-facilitated another Feature Congress Event with Jim for the Peer-to-Peer Network, to share some amazing strategies to build resilience under stress. The book is a must-read for business owners. One of the most striking themes for me in this story is “focus on what's happening through you, not to you”. This one simple phrase is so powerful. Without realizing it, I believe that's what I've managed to do, through lots of challenges and adversity in my own journey - always doing my best to show up with authentic advice, separated from my own stresses. Focusing on what has been happening through me rather than to me. Leaving A Legacy I never thought of my role writing blogs, or building and leading the PP, P2P or EOC programs, or speaking at Conferences, as creating a Legacy. That is until now. I don't think that we typically start our careers with the intention of legacy. I didn’t. And for me now, here it is – a time to take a look at my Landscape Ontario legacy. The essence of my ‘WHY has always been to help hard working business owners with fresh ideas and business tools, meaningful discussions, and sharing a new perspectives, with the hope that my ideas and words will build confidence and curiosity, making the path forward a bit easier, more rewarding, and more hopeful. That’s WHY. Because I believe there’s always improvement to aspire to, and the importance of being on a shared journey, together. When you look back on the lives that your career has touched, I'm guessing that you too are building your own legacy – but perhaps without realizing it – like I have. From the people that you've worked with, to the landscapes you've designed, or built, planted, pruned, cared for, enhanced, watered, fertilized, supplied, or illuminated, your legacy lies within. There are watershed moments in every career that are transformational. But we often don't recognize it at the time. Pride is our looking-glass in real-time. Legacy is our rear-view mirror. Perhaps you have heard the phrase, “it takes a community to raise a child”. I've been thinking a lot about the LO community in the past few months, and the 'children' (businesses) it has raised, both of mine included (Water’s Edge Landscaping and Consulting By Hart). This LO community has raised tens of thousands of 'children' in its’ 50 years. And just like you, here reading this Business Tips issue for maybe the first time, or the 200th, I'm grateful to be one of them. A Fond and Grateful Farewell to Landscape Ontario I am confident that all of the Landscape Ontario ‘whats’ I’ve done over the past 15+ years has offered solutions, and some inspiration to try something new for business owners and managers. And that my ‘why’ has helped many to realize that they’re never alone if they engage in all Landscape Ontario has to offer. After 200+ business column issues for Landscape Ontario, I have just submitted my last one. I am sadly retiring from all of my work with LO. I am grateful to have had the opportunity to inspire others to challenge hard working business owners and to have shared my hard-earned wisdom on running a business and a team. For your business and your team. That’s always been my ‘why’, and why I love being a business coach – which I will continue to do in the years ahead. I encourage you to take a moment to take stock of the legacy that you are building…. And to hone in on your ‘why’ vs your ‘what’. Onwards.
Every now and then, something comes across your desk or into your inbox that is worth paying attention to. If you’re a contractor who sells services to your customers, which include labour and materials, equipment and overhead costs, then this article is worth your time to read. Unless you are either entirely recession proof in your market, or aren’t trying to improve profit in your business. But if you are working hard to figure out a way to be more profitable, read on. Sometimes the most successful businesses have all of the cutting-edge technologies, software, apps, equipment and training. And some businesses have all of that, and still aren’t profitable enough to pay the owner well, build equity and an engaged, career-minded team. Enter J. Paul Lamarche, and his industry-altering pricing system. JPL’s estimating and pricing system was officially adopted by Landscape Ontario in 2005. In 2010, he wrote the book: What the Market will “Bare”. It is unique, because it is specific to landscaping, and is written in plain English. His system includes simplifying and explaining the most important factors in building a profitable business: Understand your true break-even costs (the point at which you neither lose nor make profit on a job). Creating a budget that includes all Overhead and Return on Investment. How to use a precise mathematical system based on division vs multiplication (don’t panic until at least you’ve checked it out!). How to record accurate overhead allocations, including items that are not part of your record keeping and/of cheque payment system. How to calculate return on Investment (ROI) for all vehicles and equipment. How to do a quick breakeven analysis when quoting a job (So that you know how low you can go on your price and avoid working for free – which is especially handy coming into a recessionary trending economy). How to deploy a simple, inexpensive estimating system using the calculator on your phone and a few important basics. In this easy-to-follow book, the main premise is that if your company has no debt load, then you’re more competitive and have a lower cost of doing business, which leads to more profit. The trick is how to get to no debt load (i.e. leased or financed vehicles/equipment) from where you are now, and stay there. When I first heard about JPL and his mathematical system 20 years ago, I went to a few seminars, glazed over when he started doing math on a white board, and left, thinking that I could figure it out on my own. Several hard and low-profit years later, I called him and hired him to come into my business as a consultant. It was 2007. I was 15 years into my landscape maintenance company with 20 employees, doing a million in sales, and made about 6% profit (EBITDA) after I’d paid myself fairly well. I wanted an exit strategy. I wanted to find a way to build value in my company, and have it run without me working 80-hour weeks. I wanted to prepare my business to sell. From the easy-to-use formula’s in this book I learned to build a budget, right-size the fleet and equipment, charge properly, eliminate ‘leakage’ on labour and materials, and gain ROI on my investment in the fleet. By 2014, I had only grown sales by 10% (by choice), but I reduced the number of staff by 25%, increased my own pay by 20%, upgraded the ‘fleet’ with no debt load, had a team of 3 managers (admin, sales and ops) running the day-to-day and increased profit (EBITDA) to 18%. By the time I sold the business that year, I was only at the office 1 day a week, and selling the higher end soft landscape projects 2 days a week on a 6-figure salary, with six figure profit on top. “What the Market will BARE” was my blueprint for success. At first, it was a bit daunting, but taking the time to go one chapter at a time, one example at a time, and learning the ‘math’ was well worth the effort for years to come. In this book, you’ll learn: How to calculate your overhead and ‘break-even’ How to calculate your true labour costs, including labour burden Benchmarks – and how they relate to your business Understanding the difference between markup and profit margin Setting a budget to guide your pricing Understanding Return on Investment Here’s just one example of a mistake in pricing that’s made by the majority of business owners, that this book teaches the reader to correct: You buy a load of plants for a project that cost you $1000. You decide that you want 30% profit on them. So, you take the $1000 you spent, and multiply it x 1.3 which = $1300. So you think you have a 30% profit on the plants. Right? But you don’t. $1000 (what you spent) divided by $1300 (what you charged) = 76.9%. So, if what you spent to buy the plants is 76.9% of what you sold them for to the customer, then the difference, 23.1%, is your profit. Wait. What??! Look at that again. You just short-changed yourself 6.9% (the 30% you want minus 6.9% you miscalculated), profit on your materials. For most companies who make less than 10% profit overall, this places them on the hairy edge of ‘lower than hoped for’ profit. However, if you were to read ‘What The Market Will “Bare”, you’ll understand that division is the key to profit margins, not multiplication – as used in the example above. Here’s the division example: You buy a load of plants for a project that cost you $1000. You decide that you want to make 30% profit on the plants. So, you take the $1000 you spent, and DIVIDE it by (100% - 30%), which equals 70%. ( This means you take $1000/.7), which = $1428.57 as the price to charge your customer. So you now have a 30% profit on the plants… the $1000 you spent on the plants = 70% of what you charged for them. This is just one example of simple corrections you will likely make to your business every year, sometimes every day, on pricing and profit by reading and applying this industry-endorsed pricing system. There are many more valuable lessons in the book, that will touch on and fix leakage in all corners of your operations, improve the decisions you make, and correct your pricing. On a personal note: Paul was not only my business coach, we became friends, meeting for lunch several times each year to ‘catch up’ on business, for over ten years. He helped me sell my landscape company, and he mentored me in setting up my consulting business. Sadly, Paul passed away in June of 2020 at the age of 70. His widow, Stella, has kindly offered to give all of the proceeds of the sale of Paul’s books to the Landscape Ontario Scholarship Fund, to support education of our newest up and coming landscape professionals. I hope that you purchase one, and improve the profit in your company.