KPIs in relation to time

The most popular reason new clients call me in to analyze their business is to see how they compare to other companies in the green industry. They want me to benchmark their operation. I tell them that I’ll more than likely agree with 90-95% of what I see.

Think about it: If you’ve been in business for some time and are making money, you’re obviously doing something right. It’s the 5 to 10% that needs improvement. Once dealt with and corrected, this 5 to 10% can make a huge improvement on a company’s bottom line.

I use a proprietary MS Excel benchmarking & budgeting program that I’ve developed to analyze a company and its key performance indicators (KPIs). It’s during this process that I’m comparing a company’s services productivity to various time units. These time units vary but are usually man-hours or man-years.

Man-year KPIs per service sector. Man-year KPIs can be useful when comparing your crew and technician productivity to that commonly found throughout the industry. They can also be useful for establishing revenue goals and performance pay incentives. When setting such goals, I first calculate the daily revenue goals and then extend them through the whole season or year. Here are some that I think you might find useful. For all of these, adjust your season length and revenue goals accordingly.

Irrigation service technicians. A typical service technician bills out at about $75 per man-hour. This equates to $675 for a nine-man-hour day and does not include parts. With parts, this technician would probably bill a minimum of $800 per day. For a seven-month season, this would translate to sales in the vicinity of $121,000.

• Seven months x 4.333 weeks per month x five days per week x $800 = $121,324
• My total revenue per year (or season) for such a technician is a minimum of $100,000.
• My minimum net profit margin (NPM) per man-hour for this technician (with parts) is $18.

Lawn care technicians. I like to set a daily minimum revenue figure of $1,000 (with materials) for a lawn care technician. For a seven-month season, this would translate to sales in the vicinity of $150,000.

• Seven months x 4.333 weeks per month x five days per week x $1,000 = $151,655
• My total revenue per year for such a technician is a minimum of $150,000.
• My minimum NPM per man-hour for this technician is $31.25 ($125 per man-hour x .25 NPM).

General tree work. A three-man GTW crew usually bills $80 to 90 per man-hour or about $765 per man for a nine-hour day. This totals $2,295 per crew-day or roughly $48,000 per month. For a nine-month season, this would total approximately $432,000.

• Nine months x 4.333 weeks per month x five days per week x $2,295 = $447,490.
• Minus holidays and some rain days, this would be in the vicinity of $432,000.
• My total revenue per month for a three-man GTW crew is in the vicinity of $48,000
• My minimum NPM per man-hour is $17.00 ($85 x .2 NPM).

Mowing or maintenance crew member. My annual or seasonal revenue goal for a mowing or maintenance crew member is $55,000 to 70,000. This calculates as follows:

• $45 per man-hour x 9 man-hours per day x 21 days per month x 8 months = $68,040
• The minimum NPM KPI per man-hour is $4.50 ($45 x .1 NPM)

Landscape and irrigation installation crew members. Installation crews usually bill between $500 to $600 per man per day (without materials). At $60 per man-hour, this translates to $540 per man-day. This totals $11,340 per month ($540 x 21 days) or just over $100,000 for a nine-month season.

• My minimum annual revenue KPI for an installation crew member (with materials) is $135,000.
• My minimum NPM per man-hour (without materials) is as follows:
• $12 ($60 x .2 NPM) for residential work
• $9 ($60 x .15 NPM) for commercial work

Conclusion.

These seasonal revenue KPIs for your field crews and technicians can be helpful for comparing your business to others. However, you need to adjust my figures to your season length, and take into account holidays and rain days. While I see these KPIs throughout North America, you need to take into consideration your particular production methods and make any necessary seasonal adjustments.