Keeping up with inflation and knowing costs

Discussion in 'Lawn Mowing' started by 6'7 330, Dec 13, 2005.

  1. 6'7 330

    6'7 330 LawnSite Bronze Member
    Messages: 1,821

    Tell us professionals, can you project if you can keep up with the rate of inflation? Do you have a vision of the steps necessary to take to keep up with the current rate of inflation? Are you even aware of what inflation is? Do you have the capacity, to know your true costs of operation? Can you calculate your true costs for this year? Do you have a system in place to keep track of work time vs. Transport time vs. maintenance time?

    Do you know what your total costs of doing business are, and how to formulate a stradigy to keep up with raising costs and inflation?
  2. kc2006

    kc2006 LawnSite Silver Member
    Messages: 2,443

    No to all, tell me what your plan is and I'll follow :D ;)
  3. rodfather

    rodfather LawnSite Fanatic
    Messages: 9,501

    Not to brag, but I know #'s here as good or better than anyone. I know my true costs of operation on a weekly basis. I continually look at my Profit and Loss Statement weekly along with YTD comparison weekly throughout the year. I personally crunch #'s left and right, up and down. I use the months of January and February to construct my Business Plan for the upcoming year examining and evaluating every revenue and expense line item from the previous year.

    Not only do I keep track of work time, I do it by the revenue it's generating and what it is costing me in total labor expense. I don't care so much about transport time or maintenance time. Those expenses are important, but are amply covered in our pricing structure. Income Statement and Balance Sheet are reviewed on a monthly basis. Bank Reconciliation is also done on a monthly basis by my CPA with me there also to answer any question he may have.

    Although I could probably do more, my motto is The search for perfection can be the murder of the good....and right now, Rf is doing pretty good.
  4. Envy Lawn Service

    Envy Lawn Service LawnSite Fanatic
    Messages: 11,087

    Well just for the heck of it, I just kept my eye on this thread after the posting...
    Gave it some time just to see.... yup, sure enough, crickets are singing in here.

    Sometimes it's just plain sad ain't it guys?
    But this is the reality of things though.
    I just try not to dwell on it as it is obvious there is not much more I can do.
  5. Brianslawn

    Brianslawn LawnSite Silver Member
    Messages: 2,002

    chirp chirp
  6. olderthandirt

    olderthandirt LawnSite Platinum Member
    from here
    Messages: 4,899

    For those who don't, they won't be around in a few yrs if that long. But on the bright side, a whole lot of not to used equiment at bargain basement prices.
  7. Brianslawn

    Brianslawn LawnSite Silver Member
    Messages: 2,002

    thats where i get my stuff.
  8. Envy Lawn Service

    Envy Lawn Service LawnSite Fanatic
    Messages: 11,087

    Now, to answer the questions....

    Yeah, I try my best to hedge against inflation.
    As far as the projections on pacing with inflation...
    Honestly those look like war maps of a battlefield.
    The reasons are obvious.

    The majority out there including the AJO's (Average Joe Operations) are charging less than I was getting 15 years ago for the same lawn. By this I mean 90% or more of all the services out there in my area. Meanwhile the cost of doing business has increased drastically. Anyways, the way I see it is VERY FEW are even thinking about this war, much less fighting it. So those like ourselves are fighting a really hard uphill battle just to hold the lines and loosing a little ground as time goes on.

    Yeah, I can also count my beans just as closely as the next business man. I play over-conservative with the variables and run the projections where they don't play in my favor. I set my recovery periods short too in order to agressively re-capture investment capital. I don't tweak the numbers just to make the books look good. Therefore they are always sound and stable... and I usually always exceed the projected numbers.

    Time logs go everywhere with me. I record the data, track it, audit it, and analize it. Routine maintenance time is the one thing I'm not sweating so much anymore though.
  9. 6'7 330

    6'7 330 LawnSite Bronze Member
    Messages: 1,821

    Well hell,

    Let me ask this ,who the hell is going to buy a Cadillac ?
  10. Brianslawn

    Brianslawn LawnSite Silver Member
    Messages: 2,002

    caddies are overrated. you know what i just bought, bill. :drinkup:

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