You Say You Want a Resolution

Lawn & Landscape spoke to several business consultants working in the green industry in an effort to compile a list of 25 solid New Years’ resolutions for our readers to adopt as they roll into a hopeful 2005. The following resolutions are in no specific order and will not apply to every business. However, we’re confident that every one will find at least one tip that helps them to step into 2005 on the right foot.

Now, repeat after me…

In 2005 I resolve to:

• Pay myself the right salary. This is a no-brainer according to Kevin Kehoe, owner-manager, Kehoe & Co., Laguna Niguel, Calif., who says that most landscape contractors are not paying themselves enough. “It makes you unhappy,” Kehoe says. “And as someone who works hard running a business, you deserve to be happy.”
• Apply a benchmark mentality to annual budgets and year-to-year analysis. Joe Skelton, a business consultant with Joe Skelton & Co., Roswell, Ga., asserts that creating benchmarks for a company’s financials is invaluable in tracking profits, budgets, and annual development of a company’s bottom line. It means recognizing a quantifiable marker with which a contractor can measure future budgets and profit margins – looking at the past to plan for the future.
• Fix my sales-to-production hand-off.  Kehoe says this resolution is most appropriate for the construction or design/build contractor. “Sometimes what a sales department hands over to production is confusing due to lack of detail,” he explains. “A lot of production hours can be wasted trying to figure it all out. Fix it so that the information getting to production is about 95-percent complete. In most companies, it’s closer to 70 percent and there is a 2- to 3-percent profit margin built in to fixing that process.”
• Develop a Web site. “If you haven’t done this already you need to do it soon,” says Rick Curlett, consultant, Curlett Consulting Group, Sunriver, Ore. “When you do, be sure to establish a customer bulletin board – it gives you the opportunity for live feedback. It’s a way for customers to communicate with you 24 hours a day. But you must also make a commitment to respond to those customers within 24 hours, maximum.”
• Deal with smaller employee-performance issues immediately instead of waiting until they become sizable problems. Employee problems do more than have an adverse affect your bottom line, Kehoe says. “They can sometimes lead to ugly lawsuits or employee morale breakers,” he says. Nipping them in the bud can help contractors avoid ugly, unproductive confrontations down the road.
• Hire and pay for real foremen. “Get someone who has the experience and you’ll have a better quality employee,” Kehoe says. “We’ve found that most people pay too little. If you pay them $11 or $12 an hour, you’ll probably make more money if you raise that to $13 or $14 for someone who knows the job. I’ve found that this pays back dividends because there will be fewer re-call problems and less customer defection. There’s less time lost to inefficiency.”
• Get rid of business lines that don’t make money. “That means sticking to the kinds of work that you do best and sub-contracting out the rest,” Kehoe says.
• Take employee orientation seriously. “Unbelievably, many companies don’t even have an orientation program in place,” Skelton says. He believes that this is an intrinsic part of starting off on the right foot with new employees because it introduces them to that company’s specific working culture and helps answer questions before they’re asked. It also sends the message that management is serious about developing a good relationship with new hires and employees throughout the organization.
• Share information and numbers with my managers and foremen. Kehoe says this boils down to simple common sense, but its something that too few business managers do. “Smart, informed people make smart, informed decisions in the field,” he says.
• Raise the price on money-losing and problem accounts. Kehoe says that many businesses have a few relationships with long-time customers who are priced too low and have been priced too low for some time. These kinds of customers, he says, can hurt business and affect the bottom line. “Raise prices on them this year and if they leave, they leave,” he says. “Even as painful as it may be to lose a long-term customer, you’ll find that it opens the door for all kinds of new opportunities – like new customers who are better for you. A difficult customer eats up part of your route and some of your crews’ time. Drop the problem customer and your crews can go off to new jobs.”
• Inventory my financial management systems. Skelton advises scrutinizing the way the company’s money is handled. “Look at all the tools you use,” he says. “This includes your profit and loss statements, your bidding and estimating system and your job-costing system.” Decide if these systems are doing the jobs they were put in place to do. “They’re the tools that will help you manage your business better, which makes them important.”
• Clean up the shop and find out what really goes on out there.  It’s a dirty job, but some organization may give you a new perspective on your inventory and equipment. “After you recover from the shock, you’ll discover ways to save lots of money employing preventive maintenance practices,” Kehoe says.
• Get involved in a peer group to network and learn about wearing multiple business hats effectively. Looking to peers in the industry is one of the best ways to accumulate new ideas for managing your business, Kehoe suggests. Getting involved in such groups helps build long-term relationships that may continually bring you support and advice from those who understand the business.
• Track and monitor hourly job costing on all jobs. “Compare revenues to hours on a job to achieve a budgeted rate,” Kehoe says. “This will help in holding managers accountable.”
• Develop and implement a comprehensive training program. “Most companies don’t have any training program,” Skelton says, noting that this is different from employee orientation. “You need to decide what to train, how to train and who will do the training.” He says that developing this kind of system does not take long and will save a lot of time in the future.
• Slay a sacred cow. Kehoe says that many business owners have one or two employees that have been “untouchable” for a little too long. The employee, though he may be good at what he does, causes other kinds of problems for the company. “The owner knows it in their gut,” he says. “If you’ve been holding on to them for two long, get rid of them.”
• Get rid of my accountant if I do not like the advice he gives.  Kehoe really can’t be much clearer with this advice.
• Improve customer retention. “Say, ‘I want to have a 90-percent retention rate in 2005,’” Curltett says. “Don’t wait until March or when renewal time comes around to get started on this. Start asking your customers questions on how you can retain them right away. Don’t ask the questions that will make you feel good. Ask four or five succinct questions that will return some hard data.”
• Stop complaining and worrying about what my competitors are doing. “It’s the wrong focal point for any business,” Kehoe says. “Focus instead on quality, customer care and costs.”
• Manage my cash better.  “Get bigger up-front deposits and bill ahead of your production curve,” Kehoe says. “Start collecting the check on the day the job is done and begin collection calls within 10 days.”
• Begin recruiting before there’s an actual need to hire. Skelton advises seeking the best employees possible before you need them so you’re not under-the-gun to find someone at the last minute when there is a dire vacancy in your staff.
• Hold employees accountable for equipment repairs and losses. Kehoe recommends conducting regular inspections of each crew and charging crews for any preventable damage.
• Begin to look at employees as valuable resources or human capital. “If you’ve focused on your people, built the very best team you can, trained them well and rewarded them for good performances, those people will provide your customers with a high level of customer satisfaction,” Skelton explains. “If you have satisfied, happy customers, they’re going to want to continue doing business with you.”
• Build a better budget. This is helpful for several cost-efficient reasons, but Kehoe stresses a budget’s important relationship to prices. “Most people use the same prices every year and if you don’t raise them you could lose profit by 2 or 3 percent,” he says.
• Respond to customer requests twice as fast as last year. “The time between the first phone call and getting that first proposal presentation out there is very important,” Kehoe explains. “Shortening the time between the customer’s call and delivering the job estimate can double your hit rate.”
• Get excited about my business again this year and set one big goal. Whether your goal involves cost-reduction, growth or landing one or two big new accounts, Kehoe stresses the importance of attitude. “If you get excited about it, so will everyone else,” he says.