As a lawn care business owner, it's critical to have a deep understanding of your numbers. This not only involves keeping track of your revenue, expenses, and profits, but also being aware of your financial health and making informed decisions for growth. In a recent episode of the Green Industry Podcast, Megan and Joey Coberly from the Landscaping Bookkeeper shared their insights on how lawn care business owners can better know their numbers.
One of the central points discussed was the significance of staying profitable while expanding your business. According to a recent survey, 44% of lawn care companies never cross the 500k revenue mark. However, Megan and Joey's goal is to assist clients in surpassing this mark and becoming more profitable. While the average profitability in the industry stands at 8%, they aim to help clients reach a 10% profitability rate or even higher. The difference between a 10% and 20% profit margin can have a significant impact on a business owner's net worth.
Megan and Joey emphasized that their service is designed to help clients attain higher profitability. They make all of their decisions based on what they can do to improve their clients' financial health. For instance, they helped one client purchase a business from their dad by providing a balance sheet and demonstrating the different factors that can affect the business's value. This highlights the importance of having a trusted financial advisor who can guide business owners in making informed decisions.
In conclusion, as a lawn care business owner, it's imperative to comprehend your numbers and financial health. By knowing your numbers, you can make informed decisions for growth and increase profitability. Megan and Joey Coberly from the Landscaping Bookkeeper have years of industry experience and can help you achieve your financial goals.
In order to expand the length of the blog to 2100 words, we can dive deeper into the various aspects of understanding your numbers as a lawn care business owner.
Firstly, it's crucial to have a solid understanding of your revenue, expenses, and profits. This involves keeping accurate records of all transactions and analyzing your income and expenditure regularly. By doing so, you can identify areas where you can cut costs and increase revenue, leading to higher profitability.
Additionally, you should keep an eye on your cash flow. This refers to the amount of money coming in and going out of your business, and it's essential to ensure that you have enough cash available to pay bills and fund growth. You can use a cash flow statement to track your cash flow and make informed decisions to improve it.
It's also important to regularly analyze your financial statements, such as your balance sheet, income statement, and cash flow statement. These statements provide a snapshot of your business's financial health, allowing you to make informed decisions about growth and profitability. For example, by analyzing your balance sheet, you can see how much money you have in the bank, what you owe to creditors, and how much your business is worth.
Moreover, it's essential to understand the key metrics that drive your business, such as cost of goods sold (COGS), gross profit, net profit margin, and return on investment (ROI). These metrics can help you understand how your business is performing and identify areas where you can improve.
Another aspect of understanding your numbers is setting financial goals. This involves setting realistic targets for revenue, expenses, and profitability and developing a plan to achieve these goals. Having financial goals can help you stay focused and motivated, and provide a clear roadmap for growth and success.
It's also important to have a system for tracking your numbers. This can be done using software such as QuickBooks, Xero, or Wave, which can help you automate your financial tracking and make it easier to analyze your numbers. Check out Green Industry Podcast episode #905 featuring Megan and Joey Coberly.
