Trying to keep a finger on the pulse of a company’s financial health can be difficult for a lot of landscape business owners. Sometimes, the everyday tasks of the business just get in the way of keeping up with the financials. But ignoring that information can be detrimental to your success.
James Huston of J.R. Huston Consulting Inc., headquartered in Granby, Colorado, has more than 30 years of experience and has written numerous landscape industry books with lots of focus on financial health. At LANDSCAPES, he will be presenting the session “Financial Management: Benchmarks and Critical Numbers for Landscape and Lawn Care Companies,” which will help landscape business owners with these very struggles.
We’ve asked Huston to share some of his best tips with us today.
Financial Health Tip #1: Know Your Vital Signs
In the medical profession, vital signs are benchmarks from which doctors measure health, says Huston. But imagine if doctors were working without knowing what those numbers are. That would put them at a huge disadvantage for being able to gauge a patient’s health.
Yet, many landscape business owners go to work every day without any concept of where their company stands.
“It’s important to pay attention to your company’s vital signs,” Huston says. “It is these essential numbers that ultimately indicate the overall health of your business.”
Financial Health Tip #2: Make Sense of the Numbers
Of course, it’s not just enough to know those numbers—but you also need to know what to do with them, says Huston.
“The last thing that you need is a bunch of raw data that has no real meaning to you,” he adds. “During our session, we’ll also talk about how to understand the numbers that are most critical to your business and your success.”
Huston says this knowledge will allow landscape business owners to “self-diagnose issues and problems.”
“We’ll get down to the basics in which business owners will learn how to format data into profit and loss statements, bids and more,” Huston says. “Session attendees will receive a lot of Excel spreadsheets that will help them with some of this vital data formatting.”
Financial Health Tip #3: Be Willing to Change
Once you’re able to make good sense of the numbers that measure the health of your business, it may come time to make changes. Yet, many landscape business owners are resistant to this. With 30-plus years of experience, Huston has worked with many different companies and admits that regardless of size or success, change is hard—even when it’s necessary.
“The first time I go out to a business to consult, I often tell them that I’m likely going to affirm 90 to 95 percent of what they’re already doing,” Huston says. “But it’s that 5 to 10 percent that may be out of whack where we need to focus. You can be making a profit but still have room for change so that you can make even more profit.”
EDITOR’S NOTE: Want more business-building tips? Attend LANDSCAPES!