OPERATIONS
Monthly Strategic Questions 7. What do my financial statements say about my business? Your profit & loss, balance sheet, and cash flow statements work together. If your P & L shows profit but your cash flow from operations is negative, you have a collection problem. If sales are strong but your balance sheet shows growing debt, you may be growing too fast without the adequate capital.
If you don’ t feel comfortable with these statements, ask an accounting professional or business mentor for help. If you decide to apply for small business loans or financing, a lender may request financial statements. Be ready and feel confident to get financing when you need it.
8. Where is my money really coming from? For OPE dealers, review your P & L. Parts typically generate 34 % gross margins, service work about 56 %, but new equipment only 12 %. If 80 % of your revenue comes from low-margin equipment sales, you’ re working harder than competitors with balanced revenue streams.
For landscapers, analyze profitability by service type. Maintenance contracts might have lower margins but provide predictable cash flow, while installation projects offer higher margins but require more working capital.
Industry-Specific Deep Dives 9. What’ s my true labor efficiency?( landscapers) Track actual labor hours against estimates for every job. If you estimated 40 hours but used 48, that’ s an immediate signal to investigate. Was it poor estimating, job site inefficiency, or unexpected complications?
Share this data with crew leaders. Transform them from supervisors into business-aware field managers who understand that time equals money.
10. What’ s my effective labor rate? To calculate effective labor rate( ELR), divide total labor sales by total billed hours. If your door rate is $ 120 but your ELR is $ 95, you’ re losing $ 25 per hour to technician downtime, unbilled diagnostics, or perhaps unauthorized discounting.
This gap represents pure profit leakage. Fixing workflow inefficiencies and training service advisors can boost profitability faster than any other single action.
11. Are my inventory numbers accurate? For dealers, inventory is typically your largest asset. Monthly physical counts compared to book records reveal shrinkage, theft, or system errors. More importantly, analyze turnover rates and identify slow-moving stock that’ s tying up cash.
Use your inventory data strategically. Which parts sell consistently? Which equipment sits too long? This information drives better purchasing decisions and identifies opportunities to improve cash flow.
Equipment and Asset Questions 12. What’ s the true cost of ownership for my equipment? The purchase price of equipment is just the beginning. Monitor the full lifecycle of equipment cost including fuel, maintenance, repairs and depreciation.
A landscaper might discover that Brand A mowers cost 15 % more initially but have 30 % lower repair costs and 50 % less downtime than Brand B. That’ s insight you can use for future purchases.
13. Am I maximizing equipment ROI? Before major equipment purchases, calculate comprehensive ROI including increased revenue potential, productivity gains, fuel savings, and available rebates or incentives.
Don’ t just consider direct revenue. A new aerator doesn’ t just enable aeration service, for example. It might also reduce project time, improve crew efficiency, and enhance your professional image with clients.
Seasonal Strategy Questions 14. Does my cash forecast prepare me for the off-season? Seasonal businesses need 12-month cash flow forecasts, not just monthly budgets. Map out when income peaks and troughs, and identify fixed costs during lean periods.
Try to build cash reserves covering at least six months of fixed expenses. Strong cash reserves let you negotiate better vendor terms, buy equipment at off-season discounts, and invest in marketing.
15. What can my numbers teach me about next year? Which services were most profitable? What were your actual labor costs per hour? How did fuel expenses impact margins? This historical data can help you refine estimates, adjust pricing, and identify opportunities for the coming season.
Leverage Your Knowledge
The next time you sit down with your books, start with one or two questions that resonate most with your current challenges. As answering these questions becomes a habit, add more. Before long, you’ ll find yourself making decisions based on real data instead of gut feelings— and your bottom line will reflect the difference.
Gerri Detweiler serves as Education Consultant for Nav, a financial health platform that helps small businesses owners build and manage their business and personal credit, track cash flow patterns, and understand their financing options before they apply.
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