This month officially marked the beginning of fall, and as we enter the last couple months of the year, it’s time to really dig into your plans for 2021. Budgeting can be daunting, but it doesn’t have to be. We start with the big picture and follow a simple four-week plan to finishing our budget:
Week one. Get your thoughts and high-level goals on paper and discuss them with your leadership team. How much in sales do you expect to do compared to last year? How much gross profit? How much net profit? Try not to get hung up on the details in week one; just get a general vision written down.
Week two. Share the results of week one with division leaders and ask them what resources they’ll need to reach those goals. Your division leaders should create and submit their own budgets based on the goals you’ve shared. Ensure that they consider what investments — in trucks, equipment, products, and people — they think they’ll need to hit the goals you’ve set.
We often hear owners say that they’re going to double their sales next year, but that could also mean doubling the trucks, equipment and people. Your budget needs to account for these investments.
Week three. Review the division and overall budgets and have open conversations with your team about the plans. During this week, it’s vital to strike the proper balance between ambition and reality. The easiest way to do this is to do some old-fashioned math. The numbers don’t add up if your goal is 10 percent growth, but a division manager wants to increase equipment purchases by 30 percent.
If you’re planning for growth, lay out a plan to get there. Be careful to think through:
- How many hours would need to be billed to reach your goal? How many team members and crews are needed to hit those hours?
- What mix of services gives you the best chance to hit this goal?
- What would your average job size or contract have to be to hit this goal?
Week four. Finalize your budget. Once your budget is set, consistently review it and track progress toward goals. The most successful companies review their budgets at least monthly to keep a pulse on how the year is trending. At Grunder Landscaping Co., we use Aspire to get live updates daily, and we review progress together in our weekly leadership team meeting.
Agree on a plan, work your plan and you’ll be on your way to getting to where you want to go in 2021. Have a great week and, as always, if we can help you at The Grow Group, drop us a line at grow@growgroupinc.com.
