Hey Mike Callahan here wanted to make a quick video about bottom-line profits. Whether the industry lawn care or home cleaning this video is applicable but industry stats for the lawn care industry is traditionally a four to six net percent profit margin paper-thin margins are very dangerous. What we’re seeing is a lot of clients that we’ve been talking to and working with is that they’re really close to that 15 to 20 percent holy grail of profit margin in landscape maintenance but where the bottom-line profits are getting left on the cutting room floor is the inability to address I call the imaginary estimate checklist so if you’re using an example of landscaping and mulch installation how we’re gonna break that down is first the depth of mulch so is it 1 inch 2 inch or 3 inch we’d have a separate production estimating process so we’re going on in multiplying behind the scenes in a price matrix the actual quantity needed based on the depth and the budgeted hours and cost and basing the product if there’s different types of product or using we have that built out behind the scenes. In addition we’re gonna go in and handle bed edging so maybe it is a per linear foot for hand edging or per linear foot for power edging we have two different production rates and we want to be able to count for that and create profitability. The next thing we’re doing is maybe going in for hand weeding of a bed that’s already been maintained or a bed that has not been maintained we have different production rates so instead of saying well it’s all gonna come out in the wash it doesn’t matter we just need to get a price out quickly well in my opinion that’s really a cheap excuse we need to spend the time upfront and define the estimating process for predictable profits and results and then the final part is what about the drive time mobilization so if you’re wondering why at the end of the year your profit margins are wendling down to single digits my guess is you are possibly not accounting for all the things you need to in your estimate and going in and accounting for each imaginary step in having a process like an on-site estimate form is going to be the key to success for creating bottom line profits that are double-digit and more and predictable that can be reported on, very similar in the home cleaning industry a lot of times where we’re working with folks in home cleaning and very political the lawn care as well is the dry time between the homes or commercial properties is not being accounted for and it’s very tough whether you’re paying in a piece rate pay system or hourly that those cleaners need to have some budgeted time for mobilization especially if you’re in an urban or city area where you need a place to actually park the cleaning vehicles that takes some time. So we’re looking at how do we just define a process of an imaginary checklist that the estimator or the office can use to create predictable production rate based estimating and the big ones are we need to define in them like a mulch example the different depths and how long that’ll take and the quantities needed the different products so if there’s arange you want to define each product with its cost the bed edging while you’re doing it by hand or by poweredge two different production times gonna be double the production with the power edger now there’s gonna be some additional cost for that machine and it needs we figured in there as well drivetime and mobilization so whether you’ve got the materials at your shop or you’re going to a nursery those things need to be accounted for but if it’s your ship don’t say oh well we got something in the yard and they just load it with our skid or our tractor that those times need to be taken care of in yard expense or yard time now maybe that’s already configured in your general administrative cost and it’s covered there and you don’t want to double dip but if you haven’t that should be applied for a time in that estimate behind the scenes and maybe removing or disposing debris as well. The idea in the video today is don’t just assume that everything is going to work out in the wash at the end of the day and we can throw a price on it and each job like you know this job needs a lot more weeding but the other ones didn’t so it’s all gonna come out in the wash predominately what you’re doing you’re setting yourself up for failure in that that happened in the early days in my businesses I thought it would all just kind of workout on average but it doesn’t in traditionally you do if you end up bidding that way and you win the least profitable jobs that way and traditionally the jobs that you aren’t suited to do you end up as well so it’s a compounding effect. The advice today is go out take the time to find each steps of the job create a production based estimating system on it based on square footage linear feet if you don’t know what that is yet that’s okay base it on your experience how many minutes or hours you think it’s gonna take but have a non-emotional way of plugging in the minutes or hours and when you pull up the estimate to calculate the price budgeted time and cost before profit. Hopefully things here in upstate New York open up I’m rocking some COVID hair with going on about ten weeks so you know hopefully things loosen up here in New York like they are in the rest of the country but if you are in New York or any the areas that are pretty much locked down still stay strong you know thankfully the service industry lawn care home cleaning are deemed essential and folks are out there making the money and helping their consumers have great-looking landscaping or clean homes as well. Comments or questions drop below hopefully it was helpful don’t erode your bottom line profits take the time to create a standardized estimating system based on a production of units or minutes of hours based on your experience if you don’t have a production rate based estimating system defined and built out quite yet