In the green industry, spring is a vital time of the year. It’s during those few short months that you make the majority of your sales and determine how the rest of your year will go financially. Though beneficial to project your business prior to spring in order to establish goals, revenues costs, cash flow and projected profits, it’s equally as important to re-project after spring when you have actual numbers to work with.
Why should I re-project?
The biggest reason to re-project is to work with a more accurate cash flow statement and year-end revenue projection. When you perform a re-projection after the spring, you’ll be working with real sales, expenses and collections instead of estimates, giving you a much more accurate view of how you will end the year. By re-projecting, you’ll be able to better manage your expenses, redefine your execution plan, focus on an accurate cash flow statement, and impact the overall profitability of your business.
Manage your expenses
For many lawn care operators, summer can be the slowest time of year. Weekly production amounts drop, and so does cash flow. Labor, equipment, product, and trucks all cost money, and when cash is tight, it’s important to have an accurate overview of your expenses.
Re-projecting during this time is also important because your spring marketing investments and bulk lawn care products may be due soon. Re-projecting in order to know your costs will help you manage these bills. And, now that you have the real numbers, you can look into the variances in material costs; what you ordered and what you used, therefore discovering what your actual cost is.
With an up-to-date season summary by service, you’ll be equipped with real time production numbers and customer counts. Additionally, you’ll be able to see your labor cost and compare it to production to see how efficient your team has been. If necessary, you’ll have time to downsize or hire more.
Re-define your execution plan
Re-projecting allows you to fill in the gaps and execute. To do this, you have to continue to update your business plan regularly. The days of completing a business plan and then putting it in a drawer to gather dust are over. If your business plan is the roadmap to success, not reviewing and updating it would be like driving across the country without a map or GPS thinking you’ll find the way.
Focus on accurate cash flow statement
Not only is completing the work on time important, but collecting the money is, too. As a best practice for A/R, send out statements every 14 days so your customers know where their account stands with you and you are being paid on time. Good A/R ensures that you will not end up short at the end of month when cash flow gets tight.
Spring-Green places high value on staying ahead of schedule and monitoring production and cash flow amounts. We advise that all franchise owners complete a business plan and then review it with their Business Consultants, which is one of the many benefits of joining the Spring-Green franchise system.