Here’s what we’ve witnessed again and again working with hundreds of business owners in the landscaping industry for over 10 years…
The moment my clients start following this simple 3-step framework, this is what happens next:
- Financial clarity arrives,
- Profitability skyrockets,
- Decisions become strategic (rather than taking a ‘let’s-wing-it and see’ approach).
And we’re not talking about implementing complex money-proven management systems or hiring a team of top accountants and bookkeepers. Those are necessary, of course, but they come into play later in the equation for success. Do you want to know a real money secret?
Your habits and systems are paramount when it comes to financial success!
Before we explore these habits and systems in depth, let’s establish a common understanding: In the business world, there are two primary methods for companies to boost their profits. The first involves increasing revenue, which can be achieved through:
- Expanding product or service offerings
- Intensifying marketing or sales efforts
- Enhancing the customer experience
- Adjusting prices or entering new markets
- Implementing upselling and cross-selling techniques
- Leveraging technology or diversifying income streams
Alternatively, though less glamorous and frequently overlooked, is cost reduction and effective financial management. This is where our simple 3-step framework comes in.
We encourage these three steps for our clients to bring consistency and accountability to their finances. This 3-step framework has proven to work for startups and established businesses alike. Here’s where you start:
Step #1: Separate your business and personal expenses
For those yet to delve into the pages of Eric Ries’ “The Lean Startup,” I strongly urge you to do so. It emphasizes the importance of establishing systematic processes and continuous learning based on real data, which Ries refers to as the lean strategy.
In our context, the initial step of adopting a lean strategy for effective money management in your landscaping business is to separate personal and business finances. Here are six reasons why this step is crucial:
- It facilitates effortless tracking and management of business finances through accurate financial records.
- It simplifies tax reporting, minimizing the risk of errors during filing.
- It provides a clear insight into the business’s financial well-being, enabling more strategic, data-driven decision-making.
- It helps maintain the legal separation between the business and its owner, protecting personal assets from business liabilities.
- Streamlines the accounting process, saving time and reducing the complexity of financial management.
- Enables more precise budgeting and ensures the business is prepared for potential audits.
The list of benefits is extensive. This one fix alone will enable you to enjoy all these advantages without spending a single penny from your budget. Now, let’s proceed to step two.
Step #2: Be diligent in tracking revenue and expenses
Benjamin Franklin once said: “Beware of little expenses; a small leak will sink a great ship.”
This statement couldn’t be more financially accurate for your landscaping business. Precisely documenting not only your income but also your expenses is essential for efficiently managing cash flow and allocating resources. Meticulously tracking expenses can help identify and address existing budgetary leaks that might otherwise go unnoticed.
Step #3. Leverage reports for strategic decision-making
Once again, the best approach is always data-driven. Too many business owners believe that reports are a waste of time, who even reads them, right?
That’s the problem, right there. Ignoring real data in favor of gut feelings is a risky gamble. By regularly reviewing reports and understanding the insights they offer, you can uncover hidden opportunities within your business.
Reports can become your most powerful tool for spotting trends, making informed decisions, and planning strategically. Make it mandatory for your accounting team to provide you with regular reports—whether monthly, quarterly, or annually. Dedicate some time in your schedule to learn how to read and interpret data. Then, sit and watch how it helps you generate income and scale your business. Seems easy?
Good, that’s the whole point. Start Implementing these three steps today, and not only will your financial records be impeccable, but your landscaping business will soar.
