Sales & Activities: How Your Landscaping Business Must Be Numbers on a Sheet of Paper
It’s an eye-opener to learn that 80% of a business should be composed of sales activities. Business consists of 5 areas: Lead Generation, Lead Nurture, Sales, Delivery, and Upselling. Only one area is listed as your service delivery, and the rest is sales. But as business owners, you often find yourself bogged down in Delivery. So if this is the ideal method of running your business, what then is needed to get you out of the day-to-day to allow yourself to focus on lead generation, lead nurturing, sales, and upselling?
It’s something to consider. Especially when finances are at stake. In life and in business, we battle against expenses every day. Expenses are a fact of life. It costs to be alive. I’ll repeat that: It costs to be alive. Paying mortgage / rent for shelter, paying for water, paying for food, etc. You are an expensive thing! So in life, our #1 concern is, “Am I bringing home enough money to cover the expenses of today and the expenses of tomorrow?”. As a business owner, you face that in business as well. So when you get bogged down in the day-to-day in your business, it’s taking you away from tasks like lead generation and lead nurturing, which are critical to make sure enough money is always coming in.
When us as accountants are tasked to review financial statements with you as our clients, I always emphasize that we should already know what the finances should look like if we are tracking the right numbers each week. Financial statement review is a monthly activity, but it’s really supposed to only serve as a confirmation of what you already know. What weekly numbers am I referring to here? I’m referring to key metrics like,
- “If a job/service was completed for a customer recently, what was the actual hours spent on the job versus the budgeted hours from the estimate?”
- “If a job/service is in-progress, what are the number of hours we’ve spent on the job so far versus what we budgeted for at this stage of the job / project?”
- “How many hours have we sold thus far in the current month? / Have we sold enough hours in the current month thus far?”
- “Where do each of our spending categories stand compared to our budgeted numbers? / Have we overspent in certain categories that were out of our control so that we can reduce spending in other areas?”
The answers to these questions are what really matter. If these are watched weekly, and all looked good for these, then the review of the financial statements acts only as a confirmation that things are going well. But consider there are the sales metrics that are critical to making sure enough hours will continue to be sold in future months. Examples of these are:
- “What is the revenue need of the organization to cover both expenses now and in the near future?”
- “What is our current average customer sale amount?”
- “How many new customers do we need to sell each month?”
- “What is our current closing percentage of booked call closing to a new customer?”
- “What is our current conversion-to-call for a new prospect on our list booking a call?”
- “How many appointments are needed in a single year, and how many are needed this month?”
- “How many appointments have we completed this month and how many more are needed to meet our goal / quota?”
- “How many prospects have we added to our database this month and how many more are needed to meet our goal / quota?”
With all these numbers mapped out, you can see how your business turns into numbers on a sheet of paper. As an accountant, it’s important to me that I communicate this to you. In order for me to guide you through your business finances, it’s important you understand what *activities* are required to create the finances you want.
If this type of accounting relationship is valuable to you, please contact me to discuss how we can work together.