Budget or not to budget?

Discussion in 'General Industry Discussions' started by AlleganyLawnCare, Dec 28, 2006.

  1. AlleganyLawnCare

    AlleganyLawnCare LawnSite Member
    Posts: 180

    I was wondering how many of the smaller lco's actually do a written budget for the upcoming year. I am pretty sure, that the mid to larger-sized companies automatically do one, but I wanted to know about the smaller (solos or 1 or 2 employees). How do you do yours? Do you break it down to the very last penny of projected income and expenses or do you wait the day before you have to buy or pay for something?

    To be honest, the last years, I did it the old rough justice style - by the hip. This year since my business is taking off, and I am trying to develop a family entertainment center, I have to have a written budget. This is will help tell me how much I am able to put aside for the FEC. I am hoping to put approx. $10 to $25k (I have to save approx. $200 to $300k for it) this year for it. My budget takes into account expenses, equipment upgrades, payroll, advertsing, and so forth. I just hope it goes like I hope.

    I am not sure how to help keep my goals on a time line. I think I should have a weekly budget review. What do you think?

    Chris
     
  2. lifetree

    lifetree LawnSite Fanatic
    Posts: 5,369

    A weekly budget would be very difficult to maintain ... a monthly budget should serve you well. I am just a part-time business, however, I am a financial professional in my "day job" ... take it from me, weekly budgets would simply be overkill.
     
  3. RedMax Man

    RedMax Man LawnSite Platinum Member
    Posts: 4,053

    Ya, Financial service professionals have told me that weekly budgets aren't important but monthly ones are and can help you improve the next month from the last one so that you can be more efficiant and productive.
    I am just finishing all of this seasons numbers so that that can use them to help figure next seasons. I will be making monthly budgets that will include overhead, ins., equipment, etc. I don't think i will be able to figure them right to the penny but once i complete one month and see how i made out i can use it to improve the next month and so on. I am solo and have a helper when needed.
     
  4. KS_Grasscutter

    KS_Grasscutter LawnSite Gold Member
    Posts: 3,335

    I am not gonna bother making a budget... I KNOW I wouldn't follow it AT ALL. And if I looked at it, I would just get frustrated, laugh at it, and throw it away.
     
  5. AndyTblc

    AndyTblc LawnSite Fanatic
    Posts: 5,476

    I would think that a budget for lawn care lawn maintinence and greenscaping and lawnscaping and what ever would be pretty hard because you never know what kind of season you are goning to have, you may have a dry as a bone season and customers that don't have and don't water. And you may have a season where you can't keep up and you have too much rain and you get behind. I just keep money in the bank and an atm card in my walet if I need to purchase something big right now, and I buy gas and oil with cash .
     
  6. RedMax Man

    RedMax Man LawnSite Platinum Member
    Posts: 4,053

    Thats true but if you have at least a relative budget maybe not very precise then you can use for alot of related things like figuring overhead, hourly rates, and knowing if your really making a profit after all the business expences and extra stuff that the money must be used for.
     
  7. Shawns Lawns

    Shawns Lawns LawnSite Senior Member
    from Maine
    Posts: 638

    I agree it is hard to know what kind of season you will have so i think that would be hard to budget for. I don't nickel and dime everything. If i see a great deal that i know i should not get right now because the budget is tight, is just a ridiculous as paying more in the future when the budget is not so strained. You have to know at some point what you can and can not afford to buy. :waving:
     
  8. lifetree

    lifetree LawnSite Fanatic
    Posts: 5,369

    That's why you have a budget ... if your season looks like it's not shaping up the way you want it to, or the way you budgeted, then it forces you to figure out what you may need to do in order to achieve the budget ... in other words, go out and get some new business, or conversely, find a way to reduce expenses, or some combination of the those 2 things in order to achieve the "bottom line". That's what "for profit" companies do all the time.
     
  9. ED'S LAWNCARE

    ED'S LAWNCARE LawnSite Senior Member
    Posts: 361

    Budget? I write a biz plan for the year with projected income, expenses, capitol expenses, profit. Is it not the same:confused:
     
  10. Josh.S

    Josh.S LawnSite Bronze Member
    Posts: 1,085

    If you fail to plan, you plan to fail.
     

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