The Evolution of Aspire – Version 3.3

Since Aspire is proud to be launching Version 3.3 this week, we interrupt our regularly scheduled “Do the Math” programming to bring you a quick look at the new features of our latest product upgrade!

 

Being a part of Aspire is all about evolution: everything gets better with each new iteration. This applies to our company, your company, and most importantly, our software and support.

The Aspire Software Co. was founded in 2014 by Kevin Kehoe and Mark Tipton. There were only four team members in those early days. As a new start-up, the company made its home at the Economic Development Center in St. Charles, Mo.

Now, three years later, the company has evolved into a much larger team with its own office and a brand new version (Aspire Version 3.3) of its green/snow business management software.

Aspire Version 3.3 has some very important evolutionary changes:

Business Budgets       

                                   

3.3 allows you to set up your budgets by branch & division and roll those budgets based on “actuals” the software can help you manage in real-time. You can oversee all aspects of your budget in one place including overhead, cost of goods sold and revenue invoiced and/or earned.

Key Performance Indicators (KPIs)

As you know from last week’s post – Key Performance Indicators are how you keep track of your budget items and identify variables that help you run your business better. With that in mind, 3.3 helps you keep your eye on the KPIs with new homepage configuration, new secure access to the information, and budget reporting tools already set up for KPI functionality. Just as a reminder, the Aspire KPIs include:

  • Overhead Recovered
  • Client Management
  • Profit and Loss
  • Forecast
  • Labor Efficiency
  • Sales Scorecard

Customized Forms

Most contractors must collect and report information for government entities (for example: chemical applications or DOT compliance).  Aspire now provides the ability to customize the system so that these forms can be completed in the field and reports generated automatically.

Mobile Time

Keeping track of your crews is one thing, but 3.3 allows you to produce a daily crew work plan – right on the mobile smart device they use to keep time and materials. This allows for better planning and less forgetting of things like supplies and equipment required to perform the work.

Real-Time Inventory

One of the hallmarks of the Aspire System is to have a live view of time and materials as the projects progress through the day. We’ve improved our real-time inventory tracking to monitor purchase variance (if purchase cost varies from standard cost or if that cost changes). We also equipped 3.3 to show this purchase variance in the End of Month report and allow you to update your purchase cost in bulk based on a rolling schedule (12 month or custom-defined).

Payroll Integration

In using Aspire 3.3. to help manage your payroll, you can now Export your numbers to your bookkeeping software, automatically have employee updates sent to Aspire for payroll purposes and, most importantly for this update, integrate Worker’s Comp audit reporting to help you and your employees save on premiums.

Let’s Evolve!

While we might not have an epic white beard or a boat called the Beagle, Aspire constantly pushes the evolution of our company and our products for the sake of your business.

And while 3.3 was just released, we’re not done looking to the future. This October, at the Green Industry Expo in Louisville, we invite you to join us at the release of Aspire Version 4.0.

Without giving too much away, let’s just say that companies will have even better features to manage construction projects, equipment, and snow – just in time for winter!

So how about it – are you ready to evolve your business with Aspire?

KPI’s in a Landscape Business – Doing the Math Part 3

KPI: Sounds pretty important, doesn’t it? That’s because KPIs (Key Performance Indicators) are important. They are the first level “drill down” in the reporting cascade for a good Landscape Business Management Software (see below).

BIG PICTURE

Rolling Budget

Business KPIs (Key Productivity Indicators)

Functional Reports (Sales, Client, Production, Finances)

Process Dashboards

LITTLE PICTURE

KPIs are used to identify the sources of the variations in your rolling budget so that you can make the adjustments needed to reach your goals. There are six critical KPIs: overhead recovery; client management; job – service and profit center margins (P&L); labor efficiency; sales management; and work forecast. Let’s briefly look at each one and why they are essential.

Key Performance Indicators

Overhead Recovery – If I am the boss, I want to know: (a) I am generating enough gross profit to cover fixed expenses, and (b) whether I can “flex” my pricing because I have it covered.

Client Management – I want to know (a) how much recurring contract revenue we have under management, (b) what we have lost and why, (c) what is at risk of non-renewal, and (d) how much upsell revenue we are generating as a percent of current contract revenue . I want to know if our client revenue will achieve the budget goals.

Job – Service P&L Management – I want to know (a) where I make and lose money, (b) the nature of my gross margins in detail, and (c) whether my labor rates and projected labor spending dollars are within budget. As I discussed in the last post, no cost variance will cost me more than poorly trending labor. I can tell you this from a client experience last year – a very painful and costly experience at that. The lesson learned: When it starts to trend badly, don’t wait. Act!

Labor Efficiency – I want to know (a) where we are over or under on job hours, and (b) whether that over/under is due to field performance and/or estimating accuracy. I also want to analyze these trends down to individual crews and the jobs.

Sales Management – This is major variance problem #1 (labor is a close second).  Therefore, I want to know where my new sales are coming from: (a) is there sufficient pipeline activity to meet the revenue budget, and (b) if we are bidding the right stuff at the right margin, and closing at an acceptable rate.

Work Forecast – Finally, I want to look forward and play sensitivity analysis (a.k.a. “what if”). Specifically, I want to know, based on what has already sold and some of what is currently proposed, whether (a) there will be enough revenue to achieve the budget, (b) if we have too many or too few production crews to match the revenue budget, and (c) if the combination of these two will produce the gross profit dollars required to pay for my overhead.

 

Bringing It All Together

Budget variances point me to where the problem is and the KPIs tell me what it is. And dipping back into my bag of the clichés, “a problem well-defined is a problem already half solved.”  I learned this at the same time I learned to always do the math.

Why do the math and go through all this reporting and analysis? Because everyone has an opinion and a rationale. This is fine by itself, but opinion and a rationale are no substitute for facts. When it comes to smart budgeting, only numbers matter. So I listen to the opinions and rationales, then ask, “Can you prove it to me with the numbers?”  That’s why we do the math.

The next level in a cascading business management software reporting system is a drill down through the KPIs – otherwise known as Functional Reports (e.g.;  Detailed Sales, Client, Production, and Cost reports). These reports will provide real insight into actual transactions (the “scene of the crime” details) essential to correction, action, accountability and ownership of problems/solutions.

I will discuss these reports next time.

If you have questions or need more information about any of these KPIs, please feel free to contact me at kevin.kehoe@youraspire.com.

Budgeting: Doing the Math Part 2

To make money, you must manage effectively. To manage effectively, you need to employ a cascading reporting structure that starts at the top of your company (big picture) and drills down to the bottom (little picture). There is no other way to maximize visibility and accountability.

BIG PICTURE: Rolling Budget

Business KPI’s (Key Productivity Indicators)

Functional Reports (Sales, Client, Production, Finances)

LITTLE PICTURE: Process Dashboards

There is a right way to do this. Let’s start with the big picture – the budget – in this post and move down the cascade in future discussions.

The budget is a working management tool that operates at the biggest picture level. Once you create it, you need to use the budget by “rolling” it monthly. This reporting process forces you to identify variances (problems) and identify/re-forecast your plan (solutions) to ensure you make the budget or make the necessary adjustments to secure your net profit.

Make the Budget (The Original)

Build your budget from the bottom up: Start with net profit, add overhead expenses, determine cost of goods (labor, materials and sub-contracts) and labor costs. Then, calculate the revenue required to get you the gross profit dollars you need. You always keep this original as your standard of comparison. It is your goal. See an example of a simple condensed budget below:

 

Roll the Budget (Re-Forecast)

Rolling the budget simply means “dropping in” actual results monthly where the original budget numbers were. Then, conduct a detailed review of the variances from the original budget. You do this to identify problems and define solutions – to make sure you make the budget. See an example of the rolling budget below:

 

Variability vs. Control

There are typically three key areas that vary in any budget year. These are overhead expenses, labor and revenue. There are usually two numbers that really matter – those you can control in the short term: labor and revenue. I am not suggesting that overhead is not important, only that it is harder to control in the short term. You don’t budget “fat” into the overhead, and most of those expenses (rent, equipment, insurance, etc.) are fixed. This leaves only staffing cuts to reduce overhead. Ouch!

Problems and Solutions

When you look at this rolling budget above, is there a problem? There certainly seems to be…

Revenues are running behind – that seems pretty important. So, here are the questions: Is it possible to catch up and close the revenue gap? If so, how?

Labor may not be over budget dollar-wise, but it is over budget as a percentage of revenue. The average wage rate is higher than planned. Is it possible to bring this cost back into line?  If so, how?

The answer to these questions requires a system of cascading reports that allows readers to “drill down” into the variances – because from the rolling budget view alone, it is hard to pinpoint the causes. Cascading, expandable reports provide an understanding of the source of the problem, allowing for the development of a solution. What are these reports? The first level is called Business Key Productivity Indicators (KPIs)…

…and I will discuss those in the next post.

Reporting: Doing the Math, Part 1

This is the first in a multi-part series about the importance of business calculations and reporting in the green/snow industries.

“Do the math!”

This was my mantra for 23 years of consulting for clients. What I meant was any business plan should be based on information that is mathematically sound and identifies the key activities required to achieve success – be it in sales, margins, hours or profits. And whether you’re planting shrubs or pushing snow, doing the math behind the work is how you stay in business.

For example, in creating a sales plan for a salesperson, do the math. Start with the goal: let’s say it’s to sell $1,000,000 in new contracts. Consider the likely close rate – maybe 20%. That will require that you bid $5,000,000 in prospect volume.

Now, start asking questions.

“How big is the target prospect job size?” This is a very good question. “Whom should the salesperson pursue?” Let’s say the target size is a $25,000 annual contract (which, in my experience, seems to be the national average for many contractors).

Now we know that we need to bid 200 landscaping/snow management job sites. But how many prospects must be contacted to get the 200 opportunities to bid? Let’s say that 50% of the time, a salesperson calls a prospect who is open to a bid (This raises another good question – what is a qualified bid? But more on that later.) Now we have a number we can use: the salesperson needs to have a list of at least 400 prospect job sites that average $25,000 annually in land/snow contract value.

Math > Goals

Does the salesperson have this list? If not, how in heaven’s name can he/she sell $1,000,000 in new business? The simple answer is, it’s probably not going to happen. This is not a bad plan, it’s worse – it’s no plan. In doing the math, we realize that the key to success is not setting the goal. The key is determining what matters in the sales process and where to start. That is why we do the math!

Let’s add one more calculation: Let’s assume it takes eight calls to get a chance to bid. Now we know another important number: that 3,200 touches will be required to meet the goal. Divide that by 250 working days and we get 12 touches every day. Now we have marching orders: The salesperson will have to reach out an average of 12 times to prospects every single day.

Is this too detailed? Not really – but it is essential. Can the salesperson hit that goal? Absolutely – I’ve done it!

Math + Accountability = Reporting

Now that we have a plan of action, we need a reporting structure to monitor and hold the salesperson accountable. Our reports will likely include the following (from big picture to small – with an emphasis on managing the small picture):

  • Sales dollars closed
  • Bid dollars proposed
  • Bid number proposed
  • Average job size proposed
  • Number of prospects contacted
  • Number of touches (email, call, task, appointment)

These reports could be reviewed every day, week or month. Why would anybody want to do that? Of course, for accountability, but mostly to re-assess activity and coach for the right tactics. This is something every sales manager must do, no matter the industry. Reporting provides the information essential to achieving success.

Do YOUR Math

So it must be for running your entire business. What is the math essential for your company’s success? At the big-picture level, it will be measured (per my prior posts) in terms of growth and profits. How many properties are you caring for? How much are they paying you to do it?

And just like the salesperson, you need to do the math and create a reporting structure from big picture to small. The big picture provides the vision. The small picture provides the traction.

Here’s the reporting structure for running a green/snow/contracting business – from the BIG to SMALL picture (more on this in future posts):

  • Rolling Budget
  • Business KPI’s (Key Productivity Indicators)
  • Functional Reports (Sales, Client, Production, Finances)
  • Work – Process Management Dashboards

In these next blog posts, I will do the math starting with the Rolling Budget and drill all the way down to Work Process Management Dashboards. I call this process of creating a reporting structure “cascading.” We start high atop the waterfall and cascade it down to the river below where the actual flow of work happens.

Next: Tune in for Part 2 of Reporting: Doing the Math.

Future Vision: Visibility and Accountability

You can’t blame the office anymore.

Garbage in, garbage out – it’s cliché but true. Sure, information is great, but only if it’s accurate and in a report that people can use. We all know that inaccurate reporting creates problems – the biggest of which is distrust. It’s not just distrust of the numbers (the report is useless), it’s distrust of management (see bottom: KITD FOHS). That is a far worse problem.

Accurate reporting provides visibility (you can’t manage what you can’t see), but visibility is useful only when the data is accurate. Reports are based on information. Information is based on data. Data is based on data entry. This is where distrust in reporting starts – at the data entry source.

How Data Entry Can Kill Trust

In traditional “accounting-centric” software systems, the office has to integrate spreadsheets, paper, and often a few unconnected applications to generate the data that becomes information for reporting. It is the office that deciphers, interprets and re-enters data created by others. And even when they are not the data source, they can be held accountable for reports nobody seems to trust. This is very frustrating for them because it is not easy work and often leads to a situation where everyone else maintains their own data and information from their own trusted reports. Not a recipe for teamwork – as you have probably experienced.

Can this situation be changed? Today’s integrated software systems can change this by removing the office from most of the data deciphering, interpreting and data-entry steps. With this software, sales and operations (the field) are instantly doing the data entry with every transaction they create, review and approve, like these basic transactions:

  • Estimate
  • Time sheet
  • Work order
  • Purchase order, etc. (See chart below.)

Fewer Touches

This is one reason why you invest in mobile-integrated software: less administrative data handling delivers more accurate information. Information becomes the responsibility of the field, not just the office. This is a big change for many companies, and the transition can be painful.

Another reason you invest in mobile-integrated software is to build teamwork – the kind where everyone takes responsibility for what shows up on reports. This is essential to realizing the strategic promises of better service and more efficiency that integrated software provides.

Visibility (reporting) requires accountability (transaction management) so information on reports can be trusted. It is the common responsibility of the field and the office to make this happen. If the numbers seem incorrect, look no further than the way data is being managed in your company. That’s where it starts.

Is it as simple as that? Yes!

Trusting numbers and management starts with integrated workflow and data discipline – this is best practice. Otherwise: Garbage in, garbage out.


KITD FOHS

During the Vietnam War, there was an American Air Force intelligence unit that believed they were providing critical battle plans to field commanders. In fact, they were providing disinformation over open channels for the Viet Cong to intercept – feeding them bogus information during the lead-up to the Son Tay Prison raid. There’s no problem with this tactic in war, but the odd part was that the unit was completely unaware that the intel they were relaying was fake. Of course, when they found out, they were not happy. Responding to their situation with humor, they designed a special unit patch for their uniforms (a pair of eyes looking up from under a mushroom cap) to describe their specialized mission:

KITD FOHS – Kept in the Dark, Fed Only Horse Sh**.