Hit your mark

Knowing how much revenue each employee should generate for your business helps you plan for growth – and gives you a tool to gauge productivity. With a handful of simple numbers, Jim Huston says,

“You can quickly measure which crews are pulling their weight, and which are not.” Employee benchmarks allow you to take the temperature of your business, see how profitable you are in the field and determine whether your labor – your greatest expense – is coming in on budget, says Huston, green industry consultant and author of “How to Price Landscape & Irrigation Projects.”

Mike Callahan, president of Callahan’s Lawn Care in Rochester, N.Y., keeps a close eye on labor costs after suffering a $70,000 loss one year when he got lax with tracking. (Read more about that on page B9.)

“We know every time we send out a mowing crew, we need to do X dollars to recover our cost, and then we build in how much more work we need to do to get our profit margin,” he says. Callahan adds, “If you can’t track it, you have no idea if you are making money.”

Rudy Larsen knows the benchmarks each employee should hit at his maintenance firm, Lawn Butler, and he implemented a pay structure to position his people to blow those targets out of the water.

He and Callahan both use a piece-rate pay system, paying employees per job rather than by hour.

Typically, a maintenance crewmember should generate $60,000 in annual revenue. At Lawn Butler in Bountiful, Utah, a maintenance laborer will make an average of $80,000 to $90,000 per year for the company.

Callahan shoots for $70,000 to $80,000 of production per maintenance person, per year – a two-man crew produces between $150,000 and $200,000 annually.

But as Huston outlines in the following employee benchmarks, $60,000 per year for a maintenance laborer is your starting point.

If you beat this, you’re in even better shape. These numbers help landscapers answer the questions: Where do I stand? How can I grow?

For example, knowing an installation crewmember should bring in $100,000 in revenue per year, a company that wants to jump from $500,000 to $700,000 would need to add a two-man installation crew, and of course build a backlog of sales to keep that crew busy.