Forecast Management – Doing the Math Part 6

Managing future risk and people are essential to business success. That’s why Doing the Math is so important. To accomplish this, you want to build a culture that does more than react – one that looks forward in preparation. You can do this using a combination of landscape business management software and a proactive forecasting process that:

  • Holds people to a high standard of preparation
  • Gives them feedback on performance and results (kudos and tough love)
  • Involves them taking ownership of their work (preparing for customer service and delivery)

Success relies, to a large extent, on planning – the ability to anticipate resource requirements like time, labor, materials and equipment. In my last few posts, we have reviewed the elements of a business management reporting system including: (1) financial budgets, and (2) reporting practices for Sales and Customer Management. In this post, we’ll establish best practices for planning.

We start with a Forecast KPI, drill down to function reports, and finally design a dashboard to drive preparation activities and accountability (see the graphic below – Forecast Management Reporting).

Forecast Management Reporting

Forecast Management (KPI):

This KPI allows you to assess whether:

  • The work and services currently sold and proposed will achieve your budget goals
  • You have the labor and equipment required to deliver those services when they were promised

It also manages your primary risks – too little revenue and/or too little or too much labor to meet your budget. By adding this Forecast KPI to your management practices, I hope you can see the strong connection to the Sales and Customer Management KPI’s. Together, these three provide the essential information for making plans today that produce financial benefits in the future – not to mention the benefits of improved employee morale that naturally come with proper preparation. (It’s not much fun to be a figurative firefighter every day – it gets old).

Forecast KPI

The Forecast KPI is based in dollars. The blue segment of REVENUE bar shows revenue sold, but not yet delivered. The orange segment shows potential revenue – bids in the sales pipeline. The REVENUE BUDGET bar shows the budget for that same time period – month, quarter or year. The LABOR and LABOR BUDGET bars show the dollars and hours required to deliver the services associated with the revenues. Sweet! Now at a glance you can make a pretty solid forecast of your future P&L compared to your budget P&L.

The next step is to forecast and plan at a more granular level by “drilling down” into:

  • Sold Service Work
  • Proposed Service Work.

These two reports do more than answer the basic question, “Do we have enough work and enough people to do it?” They outline specific types of work promised and when they need to be done. Total hours and dollars don’t explain the “devil in the detail” requirements that various services require – like different crew talents and unique equipment and material needs.

Forecast Reports

A Sold Service Work outlines sold work by service type. This is essential information because individual services types may have unique requirements for labor, materials, subs and equipment. It also accounts for specific seasonal timing requirements (i.e., the customer wants flowers installed in April not in May).

Sold Service Work (Pivot and List versions)

Proposed Services outlines those services that might be sold. These should be included in your planning as a “what if.” As in, “what if” we sell all that stuff in the pipeline? Could we get it done when the customer wants it done, considering all that we have already committed to?

Proposed Service Work

Now that we have this information, we have to make it available to the people who do the work and make decisions about preparation… and keep it current to maximize everyday awareness and personal accountability. That’s where dashboards are most useful as reports… in order to:

  • minimize the risk of customer dissatisfaction (services behind schedule), and
  • maximize efficiency (materials, people or equipment available/ready)

Here are a few essential dashboards:

Work Last Week – the services (revenue and hours) scheduled over the past week – were all scheduled services delivered?

Work This Week – the services (revenue and hours) to be delivered this week – are all forecasted services (mulch, clean-ups, flowers, etc.) now scheduled?

Work Behind – a list of services forecasted and scheduled (revenue and hours) that are past due dates.

Work not Billed – a list of completed services that are “un-billed” (these are typically enhancement, T&M, and per-service work).

CLICK HERE to see those four dashboards.

These are the best Forecast Management practices. Using a cascading reporting structure for landscape and snow business management, you can minimize surprises, build efficiency and increase your customer satisfaction – all while creating a culture of accountability where winning becomes the norm. This is landscape business management in real-time, as it should be.

Next up: the Profit Management KPI.

Sales Management – Doing the Math Part 4

Picture this: Your Monday morning sales meeting:

How are we doing in new sales?”


Are we close to getting any new work?”

Oh yeah!”


Everyone I talked to is not happy with their current contractors.”

How many is everyone?”

A bunch.”

“What’s the plan for this week to get these guys?”

I have lots of meetings set up.”


OK, perhaps I am being overly glib here, but you get my point. That is NOT sales management.

No data, no details, no facts, no math, and no real plan. What’s the probable result? No sales. 

I’ll say it again: you cannot manage what you cannot see. Whom you manage must be held accountable if you’re having conversations like the one above. You must have data, facts and math to plan. That is the function of a business management software: data drives actions. Actions produce results.

To define the cascading reports for sales management, we go back to the beginning – your budget. Your budget determines your new sales goal (for our industry, I am referring to all new snow and green season service contracts). We start with the premise that falling short of the new sales goal is not an option.

Cascading Sales Management (KPI):


Let’s start at the top with the Sales KPI shown here. This KPI tells me at a glance (by any time period I choose) that which is proposed and sold in relation to the Sales Goal.

In this case, the KPI is telling us we are ahead (110% of budget) in proposal dollars, and behind (90% of budget) in closed business dollars.

This is good information, but it is insufficient for three reasons: It  (1) doesn’t hold a salesperson to account, (2) can’t predict the likelihood of success, and (3) doesn’t define a plan.

We need more detailed Functional Sales Reports to make this happen. We need to drill down into the KPI.

There are two Functional Sales Drill Down Reports I like to look at: (a) the Score Card and (b) the Open Pipeline.

Score Card

This first report shows monthly performance – budget to actual – for proposals and closes. And by clicking on the February actual number ($205,993) I can see each proposal that makes up that number.

These are the details required to assess (1) closing probability, and (2) potential gross profit dollar contribution.

It’s not the perfect report because it only shows history.  What I also need is present status regarding proposals. For that I need – the Open Pipeline.

Open Pipeline

This report isolates proposals still “in play.” This is important as some of proposals on the scorecard may already be “lost,” and some may be so old they will never close. This report helps to determine the best plan of attack for the sales team based on present conditions.

So far, so good. Doing the math, I now know how many, how much, and whom. Now I need to define how.

How will I translate information into action? To do this, I will drill down to assess the actions that can produce results. I access this drill down through dashboards (which are more simple lists than full reports).

Dashboards provide details on activities that drive the scorecard and pipeline results. Specifically, there are three dashboards I like to dig into to make the best plan: touches, prospects and losses.

  • Touches tell me whether we are doing enough (or too much) of the right things at the right times to advance the sale to a decision.
  • Prospects will one day become proposals in the pipeline – when these numbers decline, sales also decline about six months later.
  • Losses teach what we can incorporate into our selling process, and a loss becomes a prospect (and maybe a win) in the next sales cycle.

CLICK HERE to see those three dashboards.

That’s it: the whole sales management cascade for business management best practice. The whole purpose is to build a better sales team and sales process. This is green/snow business management in real-time as it should be.

Next week: Client Management Key Performance Indicators (KPIs).

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.

Do you want a software vendor or partner for your company? Part 2

Partners provide value to each other. When it comes to business management software, that is essential. You get service and the software partner gets feedback that can enhance your business.

So, what’s a partner?

The definition of partner is an association sharing a common goal.

Let’s use QuickBooks (QB) as an example. QB is not landscape business management software. It is an accounting system. I like it – it’s a fine product. But QB sells you a product, not a service. You pay a fixed price and you have to make it work the way you want it to work. That’s OK, but it’s not a partnership.  

The reason business management software costs what it does is the cost of service. In fact, the cost of the software, itself, is less than half the cost to your software partner. The majority of the cost is in the services, support and management they deliver to you. That is why price is only one consideration.  

What should you expect from your partner?

At a minimum:  

  • Industry knowledge and experience starting at the top of the company
  • Staffing levels to support you
  • Re-investment in the product to stay ahead of the technology and user curve
  • A dedicated professional to direct your deployment
  • On-going training
  • A support center
  • A help desk
  • User and peer groups

What services should your partner deliver for all-in pricing? You will want at least the following:

  • Help with data conversion and set-up of your work-flow*
  • Training and train-the-trainer for your team
  • Full integration of the software and ability to link it to other products
  • Easy to use mobile interface from anywhere
  • An actual person to talk to at a help desk
  • Documentation and videos
  • Data management**
  • All new versions and upgrades

Consider buying these lists of overlapping services a la carte. It’s not easy.

Here’s the value from just two of these services:

*Set-up of the workflow: Think about the way you estimate work now – your takeoffs, pricing markups and margins, assemblies and production rates, service and item catalog (labor, materials and equipment), contract language, etc. Now think about translating that yourself into a new system.

**Data management: Business management software is, in essence, a massively large database of transactions you create every day. A $3m company may create more than a million of these in a year… one million or more. Try managing that yourself on your servers. Since today’s systems drive so much data and the risk of crash and loss is too awful to contemplate, you want your partner to do this for you. This alone saves you money in hardware, people and consultants.

There is significant value delivered by the right partner. So do your homework. Make certain you understand what you get for the investment you make. This is more than a purchase – it’s more like a marriage.

RALLY CAP UPDATE:  I posted Spring is Sprung last time. True to form, it snowed this past week. Please subscribe and post comments in the space below.

How To Buy Landscape Business Management Software Part Five: Product Development

This is the fifth, in a five post series written to help landscape contractors buy landscape business management software.  You can see part one here , part two here , part three here and part four here.

The Importance Of Software Product Development

When making a Landscape Business Management Software purchase, like Aspire, for your landscape company, you are making a bet on the long-term viability of the software vendor.  Specifically about the probability that the software company’s product and people can support you as you grow.  

Key Purchase Question: Will Your Landscape Company Outgrow The Software?

You don’t want to be in the unenviable position of having to buy software to manage your landscape business again in a few years because you outgrew the product.  This is why a higher price tag in the present is justified because you are buying insurance that you WON’T have to go through the process all over again.  

That’s why I say you can spend too little.  This one facet of the purchase process is often overlooked, but in my estimation, it may be the most important element in the entire purchase process.

Does The Software Vendor’s Price Allow Them (and motivate them) To Continuously Improve The Product?

It takes a lot more money to maintain and upgrade a software product that it ever took to “write” the very first version.  You should understand the vendor’s financial condition and their vision and plan for upgrades and potential changes in technology.

Understand that a financially strapped Software as a Service vendor with poor profit margins will cut back on product improvement first.  They’ll “circle the wagons” to focus on keeping the current product version working, because they don’t have the resources to improve it.  This lowers the value of the software and stalls new customer sales, which continues the downward cycle.

On the other hand, a SaaS vendor with a healthy profit margin is motivated to continuously improve the product.   This attracts new customers and provides even more resources to improve the software.

Product Development Questions you should ask during your selection process.

  • Will the software grow as we grow or will I be stuck with old technology?
  • Is the product built on a mobile cloud-based platform?
  • Can the software function remotely across multiple branches and regions?  
  • How is my data managed and secured?
  • Do I own my data?
  • What is the risk of data loss and the recovery process?
  • How do I get updates? How often?  What’s the process and the cost?
  • Are the owners committed to the landscape industry long-term?  
  • Is the company financially stable?  Is their pricing model sustainable?
  • What does the organization chart look like (Remember it takes lots of people to support software)?
  • Can I speak to them before I make a decision?  

Again, think of buying landscaping management software, like purchasing a car.  You want the car you buy today to run as good or better ten years from now…  That can only happen if the product was great initially and the service and maintenance schedule is backed up by a plan and money.

How To Buy Landscape Business Management Software Part Four: Deployment

This is the fourth, in a five post series written to help landscape contractors buy landscape business management software.  You can see part one here , part two here and part three here.

Software Deployment Is Hard. The Goal Is To Make It Easier.

Deployment and software installation can either be a nightmare or just a hard slog.  There is no easy way to trade out one system for another without experiencing a learning curve.  The goal is to minimize the pain and duration of that curve.

What you need to know from the software vendor is the truth about this challenging but essential process.  What kind of deployment support and training will they provide and what does it cost…  and how will they manage your learning curve?

Questions you should ask during your selection process.

  • What are some of the changes we will have to make given how we used to do things?
  • How will it change the way I do business?  
  • What systems that now cost me money might go away?
  • Will we have to run systems in parallel?
  • Who will be our point person to guide us and answer questions?
  • How long – realistically – will this take?  Best case and worst case?
  • How much bandwidth will we need on our end – as our people are already busy?
  • How much of our existing data and history can you convert?
  • For that which is not converted, how will we handle it?
  • What are the key areas where in your experience the deployment can go wrong?
  • How much time will you spend training us?
  • How will that process work?
  • How will we set up our reporting to get the information the way we are accustomed?
  • What is follow-up training like after the deployment?
  • How do we/you train new people as they are hired?
  • What if we are not happy with the deployment?  What are our options?
  • How do we stay on time and avoid schedule slippage?

It’s Important To Have A Clear Software Deployment Plan And Process

Deploying software is a huge business interruption…  so be sure you and your vendor have a plan to minimize that pain and lost productivity while making certain the software is set-up the way you want to look at reports.

How To Buy Landscape Business Management Software Part Three: Support

This is the third, in a five post series written to help landscape contractors buy landscape business management software.  You can see part one here and part two here

The Importance Of Landscape Business Management Software Support

You do not want to purchase software and (a) use it incorrectly, (b) use less than half its features, or (c) have to keep using your old spreadsheets.  The vendor you go with should offer preemptive support to help you get the most from your software.

It’s hard to change – no doubt.  But change you must when you purchase business ERP software.  Your reports and processes no matter how inefficient are habits.  Habits are hard to break.  Great support helps you form the right habits to efficiently use your software.

The term “support” can be used as an ambiguous catch-all phrase.  There are many flavors and types. Does “support” mean, email, phone (recorded or human), forums, knowledge base, other? Make sure you understand all the support options being offered and are comfortable with them.

Support Questions you should ask during your selection process.

  • How will we learn how to use it?
  • Do you have a user’s manual?  
  • Do you have training videos?
  • Do you have user support groups?
  • Strong Software Support Is Important

    Strong Software Support Makes A Difference

    Do you come to our place to train us?  Or is it all done remotely?

  • Who does that and how often do we see them?
  • Do you have a support center?
  • How does it work?  Phone contact?  Web contact?  Both?
  • How much does support cost?
  • How long does it take to get a response?
  • If I cannot get a good response, how do I speak to a supervisor?
  • How much training is involved?
  • How are new releases trained when the software is upgraded?
  • Do I have to pay for that?
  • What are some of the issues that other people have experienced in training?
  • How did you address those?

Strong Landscape Business Management Software Support Makes A Difference

When you think about it, why would you buy anything as complicated as business management software without an owners’ manual and a support life-line to help you make the most of your investment? 

Great support cuts through complexity and helps you get the answers, assistance and results you need in the most efficient way possible.

How To Buy Landscape Business Management Software Part Two: Cost

This is the second, in a five post series written to help landscape contractors buy landscape business management software.  You can see part one here.

What Should Your Landscape Business Management Software Cost?

The cost of software is not just the quoted price tag.  Without knowing all the cost details, you can pay too little as easily as you can pay too much.  That’s because software is relatively inexpensive to write, but very expensive to support for the software company.  Your cost is like an iceberg; most of it is below the surface.

“Price is what you pay.  Value is what you get.”  – Warren Buffett

Questions you should ask during your selection process.

  • What is included in the quoted price, and what is extra?
  • What additional costs might I incur for hardware and servers?
  • money costWhat additional costs might I incur for support?
  • Are there additional costs for upgrades or new releases?
  • What is your product plan for upgrades over the next two years?
  • Will I need to add staff to manage your system?
  • What set-up costs might we experience in addition to the quoted price?
  • Will I be charged for on-site training visits?

It’s Important You Understand “The Real Price” Of Your Software

Every software company must price for current staffing to support the software, as well as future costs to keep up with client needs and changing technology.  Make certain you understand the real price.  

Finally you need to consider the Opportunity Cost of not purchasing… 

Ask yourself, How will this landscape business management software help my landscape company make more money?”

Besides the expenses, also get a handle on the return on invest you might expect.  Any vendor must justify their price in terms of dollars gained for dollars invested.

How To Buy Landscape Business Management Software

This is the first, in a five post series written to help landscape contractors buy landscape business management software.

My Experience Buying and Selling Software For Landscape Business Management

When I was a consultant, I recommended business management software to my clients. Now that I own a landscape software company, I sell it. Knowing what I now know as a software business owner and as a consultant puts me in a unique position to help others make better choices when purchasing software for their commercial landscape companies.

The Cost Of Making A Wrong Decision Is Very High

If you’re looking to buy software to manage your landscape business, it’s essential to do the right kind of due diligence before selecting a system.  Why? Because the cost of making a wrong decision is so high.  That cost comes in the form of time, money and disruption in all areas of your business.  So it’s important to reduce your risk by educating yourself to make a smart, informed decision.

This remainder of this post will serve as a general overview of the four categories of question that should inform your software due diligence process. Subsequent posts will address each category in detail.   Here we go:

First: How much does it cost?

The cost of purchasing software for landscape business management is not just the price tag. You must consider costs like:

  1. Support
  2. Upgrades
  3. Hardware
  4. Back-ups and server space
  5. IT consultants… not to mention the cost of downtime during deployment (software set-up and training).

It’s as easy to pay too little as it is to pay too much.

Here’s something you should know about the software business:  It’s relatively inexpensive to write the software. It’s very expensive to train, upgrade, and keep it working.

Buying QuestionSecond: How is the landscape software deployed?

Installing a new system takes time. The experience will produce frustration… and the new system will never function exactly like your old one.

The key to selecting the right software is to know the extent to which the software company will be involved in setting you up properly.

You should clearly understand the software vendor’s “deployment process”… how long it will take, and how much they do for you for the price quoted.

Third: How is the landscaping software supported?

Every software company makes choices in product design that affect the way you do.  I’ve included four below and linked them to how my company handles them for reference:

  1. Reporting
  2. Estimating
  3. Purchasing
  4. Scheduling, etc.

Some of these design choices may be in conflict with your current practices. This means you will need to learn not only the software but new landscape management business processes.

How will the software company “be there” to answer questions… what is the promised level of on-going support including response time and extra fees?

Fourth: Is the product built for the long-term?

Cloud software as service (SaaS) is the future. This means your data will be managed off-site (great cost saving), and that the software should provide full integration (significant productivity gains).

Before you buy you need to know:

  1. Is the product scalable (can it grow with you without you spending more money).
  2. Does the software company have the financial strength to re-invest as technology advances.
  3. Does the company have a “product road-map” outlining future features and functions.

You do not want to be “stuck” with an old system in a few short years.

Software Purchase PlanningThe Devil Is In The Details

The next four posts in this blog will address each of the above areas of the purchase process in greater detail.

My objective is to provide you with a road map allowing you to compare landscape business management software systems side-by-side and make the best decision you can. Again, the cost of making the wrong software decision is simply too high in terms of money, customer satisfaction, and employee morale.

It’s my hope to provide you with additional information and insights to help you make the best choice for your company.