Bullet-proofing your business in 2025

Business success is often seen in strictly quantifiable terms. The primary indicator of such success is the net profit margin measured in terms of dollars and as a percentage of revenue. You measure both with a calculator. On a personal level, you’d also measure success in terms of net worth. Is it increasing from year to year? If you are analyzing a business from a purely financial or investment perspective, this process makes sense. However, if you are analyzing a business that you own and that provides the livelihood for you, your family and your employees; a calculator, while being of value, does not measure everything that is important.

Quantifying the numbers in your business

We begin the quantifying process for your business by creating an annual budget that contains all the revenue and the related costs required to operate it in 2025. From this budget we obtain four things: two of these (labor burden and general and administrative overhead costs) are required to price your projects and services accurately; and two (field-labor man-hours per division and projected revenue per division) are required to measure whether you are achieving your revenue and field-labor goals for the year.

It is these four items that allow us to implement and measure my three-fold mantra: 1. Price it right! 2. Produce it right! 3. Produce enough of it! Once we complete your budget using accurate historical data from previous years, we then compare its numbers to green industry benchmarks such as general and administrative overhead costs, field-labor cost percentages, truck and field equipment cost percentages and so forth.

Next, we calculate hourly and daily field-labor rates for all your crews and services. For instance: $100 per man-hour and $1,000 per man-day for an irrigation service technician’s labor rate…or $55 per man-hour or $1,000 per crew-day for a two-man maintenance crew…or $110 per man-hour or $3,000 per crew-day for a three-man tree crew. These rates not only provide us with accurate rates for pricing our work, but they also provide us with the tools in the form of benchmarks and key performance indicators that tell managers and crews if they are performing adequately on a daily basis. There’s no mystery here. Managers, crews and technicians should know at the end of every day whether that day was a winner or a loser.

Measuring the non-quantifiable part of your business

The numbers side of the business and making a profit are obviously important. Individuals who are going broke usually do not enjoy doing so. In fact, if you are going broke and having a good time at it, I’d recommend seeing a psychiatrist — not a consultant.

Intuitive standards are just as real — I’d argue more so — as the more quantifiable ones. Quantifiable standards you learn and know by using a calculator and arithmetic. Intuitive ones you know by direct experience. For instance, you don’t need an HP 12c calculator to know if you are happy or not. You know if you are happy or anxious through direct experience. You don’t have to “run the numbers” to determine if you are enjoying your career. You may be able to reduce your stress level to some kind of measuring system, but you probably know that you are stressed out long before you see a report telling you so.

We’re talking about intuitive standards and critical numbers here. Yes, they are somewhat subjective and are capable of being manipulated chemically. Just as you can “cook” the books in business, you can “cook” your brain in life. My generation — the hippie one — made this discovery in the 1960s. You may cook some of these intuitive standards, but it’s usually a short-lived experience. Even if you do chemically alter the outcome, you’re still aiming for a standard — ecstasy, happiness, joy, etc. — even if it is for just a short period of time. You may crash and burn in the process due to your shortsightedness, but you are aiming for a benchmark, even if it’s a state of mind.

Conclusion

In order for you and your team to thrive in 2025 — I refer to it as “bullet-proofing” your business — you need to pay attention, not only to the numbers in your company but also to the intuitive side of it. Ask questions and pay attention to your own as well as to your team members’ stress levels. Do you and your team enjoy working together? Do you support one another? Are there toxic people in your business who you need to confront?

While net profit and net worth are important, if you and your team aren’t thriving and enjoying the business process, you need to face this reality and make changes. Like J. Paul Getty, as depicted in the movie “All the Money in the World,” you may be the richest person around, but what does that matter if you and the people around you are miserable?

Here’s not only to a prosperous 2025. Here’s also to a year where you thrive and enjoy the blessings that we share in this great country.

Travels with Jim follows Jim Huston around the country as he visits with landscapers and helps them understand their numbers to make smarter decisions. He can be reached at: jhuston@jrhuston.biz.