0:00 hey mike kelly here had a quick question
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submitted to callahan’s corner about
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what they should be tracking in their
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service business particularly a lawn
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care business they said mike what should
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we be tracking on a daily and weekly
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basis to outline success so i kind of
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want to start it out right now with the
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crazy inflation in gas prices and labor
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at an all-time high as far as wages uh
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there are some things we need to
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actually track for success um but a
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pre-note to that really is let’s go in
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and focus on the things that we can
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control now there’s going to be some
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things we want to track
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but what are we tracking right now on a
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daily and weekly basis that we can
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actually control we can’t control gas
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prices we can’t control the inflation
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but what we can
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control and track are certain key
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metrics in the business so we’re going
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to talk about gas prices and how we
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should look at that in a few minutes but
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the main things that i want to be
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looking at in my service business
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particularly a lawn care or a home
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cleaning company is going to look in
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at the biggest hitter right off the bat
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which is labor that’s going to count for
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about 60 percent of your expenses in
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your service business so what i’m going
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to recommend if you have not we need to
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build an estimating system um based on
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how long you think it’s going to take or
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production rate based estimating system
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but the key variable that we need from
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your estimates when we go to schedule a
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job is how long will it take
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or should it take for that job to be
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done now the crews need to see a
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budgeted time so we need to track budget
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versus actual the way that i would train
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this in the lawn care company uh with
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really good success especially when i
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was on the trucks training the guys and
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then when we trained our trainers they
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would do it this way but let’s say we
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have a
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full day of mowing today
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and we want more training those guys and
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girls on the crew what we’re going to do
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is take a large overview so you’ve had
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the budgeted time for the whole entire
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day so let’s say we’re working for 10
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hour days so we’re going to have 10
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hours budgeted time
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for the day so minus lunch 7-5 we’ve got
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a 10-hour day so the goal is we need to
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have all 30 or 33 lawns cut
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in 10 hours now that is going to seem
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extremely overwhelming for even a
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veteran person on that crew no matter
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the route density that we’d run 30 to 33
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lawns a day in our residential cruise
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we did that through route density so
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we’d say hey we’ve got 10 hours to get
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this done we need to be back at the shop
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at 10.
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let’s ignore the launch just for easy
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math but between seven we leave at seven
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we get there five we need it back to the
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shop by by five o’clock
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what i did is i broke down the schedule
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itself into quarters um and then i broke
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it down into hours the first thing we’re
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doing is we’re gonna set some short-term
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goals so if on average we need to cut
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three lawns or three and a half lawns an
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hour to hit that goal uh we labeled that
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out and basically i would sometimes when
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they first started print the schedules
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out so i could physically show them we’d
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use the mobiles from the clock in and
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out but i can physically show them that
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these are the three lawns
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at this point at 9 a.m we should be at
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and at 10 p.m we should be or 10 a.m we
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should be here at 11 am we should be
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here and at noon before we go to lunch
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we should be here but we’re giving them
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short-term executable goals now keep in
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mind in most areas of the country these
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the mowing early in the morning the
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lawns are going to be wet with dew um
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it’s going to take a little bit longer
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so we’re going to account for the
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slowness in the morning based on the
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conditions and the speed that should be
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picked up
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on there but we’re going to set short
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and long term goals so 10 hours for the
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day
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how many lawns per hour at 9 10 11 noon
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and so on
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and then break it up in quarters where
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we should be at the parts of the day
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that actually helped a lot
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and as you’re training your quality
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standard they’re going to get into a
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pace and be able to visually see where
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they’re at so as a business owner that’s
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how we actually start to institute that
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into the cruise with quality but at the
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end of each day we need to make sure
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there’s good start and stop times for
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every job and a budget first actually
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it’s on the shop wall the next day for
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accountability publicly and personally
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for those crew members with a quality
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standard so the first one is budget
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first actuals for the crews
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next one is we should be looking at on a
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weekly basis
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our new clients canceled clients
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and our net new clients in addition
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depending on the services that you are
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providing we also probably want to look
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at our monthly reoccurring revenue so
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how much reoccurring revenue for lawn
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mowing and fertilizing have we budgeted
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for and what’s the budget versus actual
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we also want to track the one-time sale
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so if you’re in design build or soft
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skates and you’re doing maybe some
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maintenance and design build want to
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break those out separately so we have a
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idea of what the recurring revenue is in
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the one-time revenue and the final thing
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that you’d be probably looking at here
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especially if you have a sales team is
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the opportunities that will close in the
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month in your sales pipeline
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and
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projected next month out
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or maybe quarter based on hardscapes but
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those are some key variables you want to
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look at but don’t get hung up in my
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opinion we’ve been through this in 2008
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uh with the recession we had and wicked
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gas prices in my company and in the
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beginning we started to get focused on
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the things that we couldn’t control like
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gas prices
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um and that’s not where you want to play
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and it’s only going to be two to three
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percent of your budget
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and we can also do a surcharge for gas
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and systematically go out now i’m going
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to recommend we’re coming up around july
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4th weekend uh we would run a job
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costing report so if our goal is 65
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dollars per man hour anybody below 65
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unless it was a commercial contract
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locked up we would actually do price
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increases on the customers not hitting
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that threshold but let’s say your goal
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is at 65 dollars per man hour and fuel
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continues to go the way it’s going and
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it probably will continue that way maybe
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you need to be at 67 or 68 per ml now we
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can systematically raise the prices on
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the clients that are not hitting that
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new financial break-even threshold so um
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a lot of content right there but these
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are the things that are kind of top of
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mind with that question submitted
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