Throughout Caterpillar’s relationship with Landscape Management Network (LMN), we have had the opportunity to learn from many successful landscape business owners—including LMN founder Mark Bradley. In 1999, Bradley started TBG Landscape with an old lawnmower, a used truck and a dream of running his own landscape business. Eighteen years later, his company earns $50 million a year in sales, but with only half the staff of an average company that size. His secret? Better planning, better staff and a constant pursuit of efficiency.
We recently connected with him and asked him to share his “top 10” tips for running a more profitable landscaping company. And we hope you find this advice especially useful as you plan for 2018.
1. Each year, start with an operating budget – It’s easy to make the mistake of running a business hoping to make money, instead of knowing how to make money. An operating budget gives you the numbers you need to:
Set sales goals that will be profitable.
Recover all your equipment and overhead costs.
Base your decisions today on facts and data.
2. Estimate, don’t “guesstimate” – Most companies can estimate job costs, but don’t truly know their overhead, break even and true net profit on every project they price. You can’t hope to grow a consistently profitable business without an estimating system that ensures every job is priced correctly, and that can be taught and executed by others.
3. Turn estimates into job plans – Estimates must clearly identify how many man hours, the equipment, materials or other costs that are planned for the job. Once the estimate is sold, use that estimate as a “job planner” for crews. You don’t have to share costs and prices, but the crews must know how the project was planned (and sold) in order to get it done on time.
4. Maximize revenue per hour – Knowing your net profit on every job is critical, but so is knowing your revenue per hour. Calculate it by dividing the price of every job by the number of labor hours. Maximizing job revenue per hour helps grow a company’s sales without adding people or overhead. Some simple ways to maximize revenue per hour include:
Increase sales by doing jobs that use lots of materials (and/or expensive materials).
5. Share a scoreboard – It’s impossible to attract and maintain a great staff if no one knows how well they are performing at their job. Timesheet and job-tracking software gives crews real-time updates on estimate vs. actual hours, so everyone knows who is coming in on budget and who isn’t. It creates a competitive, success-driven work atmosphere that’s far more rewarding than just putting your head down and working hard every day.
6. Don’t be cheap on labor – When business owners don’t have a deep understanding of their numbers, we tend to make short-term decisions that are cost-driven, not profit-driven. For example – you hire staff at low wages because it saves payroll. But this can easily translate to a less-experienced crew. This can hurt your sales in the long run because your jobs go slower, and it may force you to spend more time fixing errors instead of growing the business.
7. Don’t be cheap on equipment – You may keep your old equipment because it’s paid for and you have no payments. Or you may buy equipment and tools with the lowest sticker price because you’re saving money. But cheap, old equipment breaks down, which starts a negative trickle effect. Your projects slow down and the schedules get off-track, so you fall short of sales goals and your crews get frustrated. The biggest cost of equipment breakdowns isn’t the repair, it’s the cost of lost production and payroll while working without the equipment. Equipment is usually cheaper than labor (per hour), as it can often perform the work much faster. To grow your business with fewer headaches, make sure you have the right, most dependable equipment for every job.
8. Improve your efficiency – Mistakes and problems are more expensive than you may realize. If you’re wasting an hour picking up materials that were missed or forgotten, then you’ve spent an hour of payroll. More importantly, you’ve lost an hour of revenue-producing labor, you’ve lost the revenue for any materials you could have installed in that hour, and you’ve lost an hour of overhead recovery and profit. Brainstorm reasons for wasted time with your crews, then focus on eliminating them. You’ll see your revenue, and profit, grow in a hurry.
9. Automate your office – Technology for the office is like equipment for the field. Use software and apps to eliminate paperwork, to streamline estimating and to reduce hundreds of the hours it takes to enter data. You’ll be able to grow your company without adding overhead.
10. Learn your numbers, teach some numbers – If you want to run a profitable business, it’s important for you to understand the numbers that drive your success. And once you have a good handle on your numbers, you need to teach your key staff how to understand those numbers, as well. Getting everyone on the same page will take some of the stress off your plate. You’ll also find your staff caring more about the bottom line, instead of just their pay checks.
I’m an Attachments Product Application & Sales Support Specialist for Caterpillar in North America. I have been with Caterpillar for five years including roles in the field as a dealer sales support representative and marketing support in the skid steer and small wheel loader product groups. I graduated from Iowa State University with degrees in Agricultural Business and Economics. Our goal is to provide a full portfolio of attachments for our customers to be more productive and versatile with their machines.
I am a Pre-Field Agriculture/Product Application Representative for Caterpillar. I recently graduated from North Carolina State University with a dual degree in Agriculture Business Management and Agriculture Science, concentrating in Leadership and Environmental Technologies. I focus primarily on the relationships between customers, dealers, and the product specialists for the Building Construction Products division. Growing up on a beef cattle farm, I have several years of machine operation experience and agricultural knowledge. Thomas Jefferson said it best in that, "Agriculture is our wisest pursuit, because it will in the end contribute most to real wealth, good morals, and happiness."
I’m a Compact Wheel Loader Product Application Specialist for Caterpillar in North America. I have 11 years of experience, including roles in the field as a dealer technical support representative, and as a distributor business model consultant. I graduated from North Carolina State University with a Mechanical Engineering Degree, and wanted a job where I didn't have to sit in front of a computer all day. This job allows me to get out and get my hands dirty, with the goal of providing solutions to customers’ machine needs.
I am a Marketing Communications Specialist for Caterpillar with over twelve years of experience marketing the Cat brand to customers in Latin and North America. My goal is to arm customers with the information needed to make well informed purchase decisions; to maximize the value of Cat machines by using an array of Cat Work Tool attachments; and to minimize the total cost of ownership by using Cat parts and Cat Dealer service.
I am an expert Operator and Application Specialist for Caterpillar concentrating on products used in the construction trades industry. I operate, evaluate and train on Cat machines and Work Tool Attachments worldwide. I have a Degree in Agricultural Engineering, Craftsman Certified and was named Apprentice of the Year 1981 at the University of East Anglia, UK.
I am the National Association Manager for Caterpillar and have responsibility for customer associations and partnerships in multiple industries for Caterpillar. I have 12 years of experience at Caterpillar, and have spent most of those years in the field with dealers and customers around North America. I have always had a passion for equipment and find myself fortunate to be able to work with dealers and customers almost every day.
I am a Product Application Specialist with 16 years of experience in the industry. As a Building Construction Products Global Trainer, I focus on training dealers and customers on machines, attachments and applications as it relates to the construction, agriculture and landscaping segments.
I have been with Caterpillar for more than eight years, working in various roles including a materials engineer, a filters product manager and my current position as a parts consultant. My job allows me the opportunity to work with Cat dealers and customers providing insight on how the use of quality filters and fluids results in better equipment performance and lower owning and operating costs.
I am a marketing and sales support professional for Caterpillar. In this role, I work with our marketing and customer service teams to support or dealers and customers, concentrating on our Small Wheel Loader, Skid Steer Loader, Mini Excavator and Dozer product groups. The exchange of ideas, information and opinions about equipment and how it’s used in various industries on forums such as this blog helps me fulfill my role at Caterpillar to the best of my ability.
I am the commercial/market consulting expert for all Caterpillar tires and rims with 14 years of experience. I provide guidance in the harsher work environments of mining and industrial/waste applications. Our goal is to turn our dealers and customers into knowledgeable and trusted resources with respect to tires and rims. Our group offers training, technical support and resources to develop a level of expertise within the Caterpillar value stream that is ordinarily reserved for tire companies and local tire service providers. Ultimately, we want to provide our customers with a total Cat solution from the ground up.
I am a Sales Support Manager for Cat Financial and have responsibility for ensuring that the right financial products are available to Cat customers who purchase, lease or rent to own. 8 of my 10 years with Caterpillar Financial have allowed customer and/or dealer interaction as part of my daily responsibilities including over 3.5 years as a Territory Manager. I take personal satisfaction in finding financial solutions that work for our customers and CAT dealers.
I’m a Telehandler Product Application Specialist for Caterpillar in North and South America. I have 13 years of experience, including roles in the field as a dealer service operations and technical support representative, and as a distributor business model consultant. My telehandler passion and focus is working with dealers and customers to maximize the versatility of the product through machine and operator training.
I am a Product and Application Specialist with over 35 years experience at Caterpillar. I focus on helping you to determine the best Cat machines, work tool attachments, and services for you to use in the building and general construction, landscaping, specialty trades, and agricultural industries.
I am a Senior Regional Insurance Marketing Manager with 16 years’ experience at Caterpillar Financial Insurance Services. I have the opportunity to work with 18 North American dealers providing risk management products and services that helps the Caterpillar Enterprise ( Caterpillar, Dealers and Customers) manage their business risk. Caterpillar Financial Insurance Services offers Extended Protection Plans for machines and engines, Physical Damage Insurance, Inventory Protection Plans, Dealer Property and Casualty, Risk Management, Marine Transit Insurance and Dealer Bonds.
Jeff Brown is a marketing professional for Caterpillar Skid Steer, Multi Terrain and Compact Track Loaders. Over Jeff's 12 years in the industry, he has visited with and studied the needs of customers across landscaping, construction, and agriculture segments. Delivering innovative solutions that solve customer's problems is Jeff's main focus.
I am a North American Product and Application Specialist for Caterpillar. In this role, I have had the opportunity to represent Caterpillar at various trade shows and train customers on new Small Wheel Loader content. I graduated from Purdue University in 2001 with a Mechanical Engineering degree and have spent the past 15 years with Caterpillar in various engineering roles. Growing up in the Mid-West, I have always loved the cold and the unique activities winter enables. Unfortunately, I had to give those up when I moved to North Carolina. I don't care what people say, you never get used to a hot climate.
I am a Filter and Fluid Marketing Consultant with over 14 years experience working at Caterpillar. My focus is to ensure customers understand the importance of using superior filtration and lubrication products in their equipment.
I am a Sales Support Manager with over nine years of experience in a variety of roles with Caterpillar Financial Services Corporation. Throughout my career, I have had the opportunity to gain experience in matching financial products and tailoring funding strategies to the specific needs of customers. This includes more than three years as a Territory Manager in Seattle partnered with N C Machinery, an authorized Cat dealer covering the states of Washington and Alaska.
Welcome to the Construction Trades Online Community!
This online discussion forum is for construction and landscape professionals to raise issues, voice opinions, gain insight and share knowledge so we can all build on each other's expertise.