From time to time, you may have noticed that I have posted advice on running your gardening business.
Being brutally honest, there are not many gardeners that make great business men or women. I have found over the years that those who are good with plants and soil or grass and trees tend not to want - nor get much time - to get involved with numbers and cash flow and as businesses grow, advisers are called in to keep the burgeoning enterprise on track.
However, I feel it is essential to understand, and this is vitally important for the consumer as well as the business owner, how your business ebbs and flows and what targets, both instinctive and written on a spreadsheet, you should be looking to achieve.
First and foremost, write that all important plan. Understanding what it costs you to be able to operate is the fundamental basis for success and future profitability.
I know that we can all over complicate analysis but I know from bitter experience, if you ignore your costs you will not succeed.
In my post - What should I charge - I build a simple business plan for Jane as she ventures into business for the first time.
Use this same formula at any stage of business to work out what you need to charge and providing that you are not living beyond your means in your personal life, which in turn renders your hourly rate unacceptable in market terms, then you cannot go far wrong.
Charging the right amount of money for machinery use is also essential. After all, the machine is an asset to you and helps you to provide that valuable service to your clients.
Never subsidise the use of your machinery and always work out what your costs are so that at very least, this is charged back to the client in a pre agreed rate.
The hidden cost of travel is something which always catches small business owners out. However, it is something you can analyse very easily.
Once you have worked out the amount of fuel your vehicle consumes per mile then turning this cost into a charge out rate is simple. (note: the original post 'The hidden cost of travel' was written in Feb 07 and since then we have seen prices reach even dizzier heights $120pb)
Very few small businesses utilise Terms and Conditions. To me, that is teetering on the edge of trading suicide and it does not matter how small you are, I would advise getting these into place as soon as possible.
One customer, who refuses to pay or even holds back part of a payment because of a misunderstanding of what might be involved, can rock your profitability severely.
I have produced some simple terms and conditions - follow the link - so feel free to use them and add to them where possible (it may pay to run them past a legal eagle).
If you are creating a landscape then writing detailed specifications for each job individually is a must. For example, let us say you have been asked to prepare a wild flower meadow on a five acre site but the client can only afford to have half of it done this year.
You agree, verbally, the price and turn up to do the job. You have hired in a heavy duty tractor rotovator and stone burying machine to prepare the tilth and set about doing the job.
The client though, has gone on holiday and when they return find you bill for the creation of two and a half acres of wild flower meadow and they complain the job is only half finished and refuse to pay your bill.
Of course, you know that you only agreed to half the plot and secretly, you know the client knows this too, but with nothing written down specifying what you have agreed to, there will be little evidence to present to a small claims court.
I know that 99% of customers will never do this to you and will pay up on time and the agreed sum. There will be though, that element that are out for as much as they can get and you do not want to be the one to get caught.
Write the spec's. and get the work signed for before touching the job and it should be plain sailing from there.
All of the above can be found in the business advice section of the home page.
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