Getting to 10% Profitability – The Profit Engine

By Greg Herring
Gears inside an engine

Don’t you get tired of people assuming that a landscape business is easy to operate?

 

You just need a truck, a lawnmower, and some people. Right?  Not quite. A landscape business has many challenges.

In every company’s collection of customers or properties, there are winners and losers. One key to increasing profitability is to identify them and analyze what makes them a winner or a loser. When you understand your winners and losers, then you can convert your losers to winners, or you can fire the losers. Many people I meet don’t want to fire their losers because they help “cover the overhead.”

Unfortunately, in the landscape industry “covering the overhead” doesn’t work. At best, it is a short term solution. At worst, it is a ticket to low profitability – where the profits do not compensate for the risk.

If this situation describes your company, don’t feel bad. You are not alone. The question is: What are you going to do about it?

 

The Herring Group Peer Benchmark Report for the Landscape Industry

My passion is for restoring life margin to business owners and helping people live well. I do this by helping CEOs, business owners and their managers optimize their company’s profitability – making sure the rewards make up for the risks. In the landscape industry, that reward or profit should be at least 10% of revenue.

For most landscape companies, that number looks unattainable. However, I have the reports to prove that it can be done. I recently completed the 2022 Landscape Industry Peer Benchmark Report. Of the more than 150 companies that participated in the report, 26% of the companies had a net profit greater than 10% of revenue. In the prior year, that figure was 24%. It can be done. [Updated Dec 2022.]

 

The Profit Engine, Landscape Management, Landscape business, The Herring Group, Greg Herring, CFO Coach, Lawn care business

The Profit Engine System

Because I have had several landscape companies as clients, I have been able to package my learnings into a system. I call this system, “The Profit Engine.” Like a real engine, it needs a few things to work.

  • A CEO or owner willing to make a commitment
  • Historical data
  • People who are willing to consider reality from a financial perspective

 

With those components, The Profit Engine process helps landscape companies significantly increase their profitability.

People make better decisions with better information. CEOs can distribute more decision-making to managers with greater confidence. Everyone will know the factors that are critical to making the company more profitable.

 

Want to know more? 

Learn more about our process to get landscape companies to 12% profit margin with our Path to 12% or reach out and see if we’re a good fit for your company.  

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