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  • August 13, 2021

Managing Your Overhead Costs as Your Landscaping Business Grows

Most landscaping businesses start out as a simple one-man operation. You just need a truck and some basic tools, and a good knowledge of gardening and landscaping and you are ready to get started. Managing your overheads is fairly simple when the business is still small, but things change as you start to grow.

As your landscaping company becomes more successful and you are being offered more work than you can handle on your own, you may decide to start bringing more people on board. You might also decide to expand the range of services that you offer. This means paying more salaries, buying more equipment and vehicles, and putting more money into your marketing.

Managing the increased cost of your overheads properly is the key to sustained growth. But if you let costs spiral out of control, you will soon run into cash flow issues and the business will be in big trouble. Here’s how you can manage your overhead costs as your landscaping business grows.

Keep on Top of Bookkeeping

When it’s just you on your own, it’s fairly easy to keep track of expenses. You know what you have spent on a job and you know what you’re getting paid. But as the business grows and you have more expenses to deal with, you need to make sure that you keep on top of bookkeeping. Having a clear record of all of your outgoings and all payments received allows you to see exactly how much you are earning.

It’s important that you have a detailed budget to ensure that you are able to afford all of your overheads and you don’t spend more than you can afford. It may be best to invest in accounting software or even consider outsourcing your accounting to a third-party so you can easily keep track of your finances.

Price Jobs Accurately

Pricing your jobs accurately is so important because you need to incorporate all of your overheads into that price. If you undercut yourself, you still have to cover those costs, which means that your profits suffer. In some cases, you could even lose money on a job and that leaves you in a very difficult situation. So, make sure that your process for pricing jobs is accurate and you consider all of the costs involved. Estimate the time that the job will take very carefully too. Usually, it’s best to overestimate a little bit so you can account for any delays along the way. If things do get finished earlier than expected, it’s an extra bonus for the customer.

Manage Equipment and Maintenance Costs

Equipment and maintenance costs are one of the biggest overheads you have. It’s important that you look after any equipment properly and keep up with routine maintenance so you can avoid any expensive repairs. However, you should always budget for repairs and set aside money so you can cover the cost if you need to. It’s especially important that you find a good commercial vehicle repair service. You can click here to learn more about commercial vehicle repairs and see if it meets your commercial business needs. Equipment and vehicle downtime is very costly to your business because you can’t get jobs done until repairs are made. So, it’s crucial that you budget for this and you are always prepared to deal with any issues right away.

When it comes to buying new equipment, don’t go for the cheap option. You might think that you are saving money but it’s a false economy because it won’t last as long and it is more likely to have maintenance issues. You will make bigger savings in the long run if you invest in quality tools that last.

Staff Costs

As the business expands, your staff costs will grow. When it comes to hourly staff that are working on jobs, the expenses are easier to manage. You just need to make sure that you price jobs properly and account for all of the staff costs.

However, if you are expanding a lot and you need to hire managerial staff or a marketing team, you need to consider the costs more carefully. Even though the costs are fixed, you need to think about how much value those people are bringing to the company. If you are not seeing an increase in revenue as a result of hiring them, the cost of paying them slowly eats into your profit margins. So, always be thorough with your hiring process and consider whether you are seeing a good return on investment when bringing new people on board.

Marketing Costs

Word of mouth marketing and a simple social media strategy are enough to sustain a small landscaping business. However, if you want to grow the business, you need a more comprehensive marketing strategy in place. But marketing costs a lot of money and you need to decide on the most affordable way to handle it. Hiring your own in-house marketing team may not be the best way to go because you have to pay full salaries for an entire department. Outsourcing your marketing is often a more cost-effective option because you have access to a full team of marketing experts for a manageable monthly cost.

Regardless of how you decide to handle your marketing, you need to carefully budget your marketing spend. If you keep pouring money into marketing but you are not getting any new customers off the back of it, you’re wasting huge amounts of money. Finding a marketing specialist that has experience with landscaping companies can help you avoid this. But you still need to keep a close eye on your marketing budget and make adjustments and talk to them about making adjustments to the strategy if you are not seeing any tangible results.

A small landscaping business is fairly easy to manage, but as you start growing, things get a lot more complicated. Unless you can keep your overheads under control, your profits will suffer and you will soon find yourself in financial trouble.