As a rule, I don’t like to do wholesale revamps of the magazine. Instead, I try to incorporate the changes you ask for as soon as possible, so you’re always getting exactly what you need from us.
So, not to worry: I didn’t blow up the magazine and start from scratch, but I did incorporate a few changes to improve it. Starting this month, we’ve updated the fonts and general layout of the magazine to make it easier for you to find what you need and to read it quickly. And, our coverage for the rest of 2012 and into 2013 will focus on the most pressing issues our readers have told us they want. For example:
• We’ve expanded our popular Best Practices operations profiles, and combined them with other segment-specific coverage, so you’ll have dedicated sections for maintenance, irrigation, design/build and lawn care (those start on pg. 35);
• As part of our irrigation section, we’ll have columns from a team of industry experts from ValleyCrest Cos., including Richard Restuccia, Alan Harris and Martha Golea (pg. 75);
• To keep tabs on (and give advice on how to take advantage of) an increasingly active M&A market, we’ll have quarterly contributions from former Co-Cal Landscape owner and Leadership Award winner Tom Fochtman starting in November;
• Beginning in January, we’ll have 12 months of dedicated technology coverage;
• We’ve revamped our Market Insight Council (listed below) to add members from more diverse backgrounds, businesses and areas of the country.
I’ve always thought that my job is to find the most interesting and useful information I can and share it with you however I can. At the end of the day, you should be a little smarter after reading through these pages, and should have found a practical idea or strategy that you can put into place in your company right away.
These changes help focus our energy, but our mission at L&L remains the same: to bring you the best stories to help you run your business better and more profitably.
If there’s something else you’d like to see in these pages – a story you want us to tell, a perspective we should include – let me know. Thanks for reading.
– Chuck Bowen
As compact construction equipment offerings evolve, so do the landscape contractor’s expectations of the machines.
“As customers look at what equipment they currently have and what they want in the future, they’re always looking to do more, so performance is key,” says Mike Fitzgerald, loader product specialist at Bobcat. “They look at rated operating capacity, horsepower, lift force and pushing capability and like to see improvements in those areas. That’s something we strive for when we introduce new models so they can get more work done in a quicker amount of time.”
This is top of mind for manufacturers when they plan updates to compact wheel loaders and compact track loaders. Whether the machine operator is digging a trench, planting a tree or moving boulders, there is an attachment that will get the task done easier. The variety of attachments and the ability for compact machines to use more of them continues to grow.
Compact loaders, whether on wheels or tracks, can handle a variety of attachments (buckets, dozer blades, mulchers, augers, trenchers, levelers, box rakes, snow blowers, etc.), which are often interchangeable among compact track, skid-steer and many larger loaders, according to Jamie Wright, product manager at Terex Construction.
Some manufacturers, including Kubota, have been ramping up the power behind the attachments by improving bucket breakout force and lifting capacity on their compact track loaders.
Developments across all manufacturers’ compact machine product lines are making it easier for contractors to quickly switch from one function to another. The Quick Hitch system has been adopted by most manufacturers, says George Chaney, skid-steer loader/compact track loader international sales manager at JCB.
Cab comfort. Some JCB compact loaders have been redesigned so that the operator doesn’t have to crawl over a large cumbersome attachment to get in the cab, Chaney says. In addition, visibility from the cab has been beefed up so the operator can see 270 degrees around the machine. Likewise, Bobcat’s M Series machines are designed for optimal visibility by moving the cab forward on the loader platform, Fitzgerald says.
Cab sizes are being beefed up too. Operators of JCB loaders will find the cab size in the small platform machines to be the same as the larger platform machines, making them a little less cramped.
Comfort inside the cab has come a long way in the lifetime of the compact machines. Manufacturers offer a range of options in this department. Cab options include open, enclosed, climate-controlled, as well as sealed and pressurized for dusty job sites.
Several other improvements provide the operator with some creature comforts on the job: a suspension seat provides a smoother ride, control choices include manual, advanced and joystick, and many cabs can be outfitted with accessories such as a cup holder and a radio.
Operator comfort can be more important than it might sound, manufacturers say.
“If you’re comfortable, you’re more productive, so it’s a win-win for owners and operators,” Fitzgerald says.
More power with less fuel. Developments in compact wheel loaders’ and compact track loaders’ fuel efficiency might be driven by the U.S. Environmental Protection Agency’s (EPA) Tier 4 emission standards, but the byproduct is that the changes can help landscape contractors save on their fuel budgets.
“In today’s world, fuel cost is a major part of the cost of ownership,” says Chaney, adding that developments in fuel-efficient engines on the loaders can add up to savings of $3,000 per year on large platform machines and $2,000 per year on smaller platform machines. “That’s money in your pocket,” he says.
The push for fuel efficiency doesn’t mean that machine operators have to sacrifice power to see the fuel savings, according to Keith Rohrbacker, product manager at Kubota.
“As lawn care professionals push their machines harder, looking for increased productivity, many look to larger horsepower machines (with greater torque levels) to handle the extra load; however, Kubota has seen this trend as an excellent opportunity to continue to meet the need for power with efficient, high-torque Kubota diesel engines,” Rohrbacker says.
The compact wheel loader industry has been introducing the hydrostatic transmission to replace the traditional mechanical transmissions, according to Wright, who adds the update can lead to fuel savings.
“Manufacturer tests have shown that fuel usage can be reduced up to 10 percent with the new hydrostatic drive systems compared to mechanical drive transmissions,” he says.
Navigating the market. Most manufacturers offer a range of options when it comes to compact machines, including tires or tracks, vertical or radial lift (which affects how the boom moves), small or large platform, and enclosed or open cap. Where does a prospective buyer begin?
First, think about the job site conditions in which the machine will be used, Wright says.
“To get outfitted with the right loader, you will need to analyze the specifications of the project: What type of material will you be moving? What is the density of that material? How much material needs to be moved? Are there any space restrictions on the job site?” he says.
Each dealership will be able to show prospective buyers the realm of machine configurations and add-ons that are available, as well as attachments that exist to increase utilization of the machine, Fitzgerald says.
It can also be helpful for prospective buyers to consult peers who use the equipment before making such a big purchase.
Fitzgerald recommends talking to contractors that do similar work, fellow members of associations or those they meet at training events. “Look at what other contractors are using for specific jobs and how they utilize machines. That will help them make the right purchasing decision,” he says.
When debating between brands, contractors should consider the reliability of each brand’s machine and how well they know and understand its parts, Wright adds.
“Are you comfortable with the technology that’s under the hood? If you can handle the small maintenance issues yourself, you can help reduce overall cost and downtime,” he says. “Always buy quality – a compact loader needs to durable and reliable because downtime is expensive.”
Rohrbacker seconds the notion of thinking ahead when buying compact loaders. “Select the size of machine for your current applications and ensure that it has enough power and capacity to satisfy your future growth,” he says. “Also, choose a dealer that will support your product well.” Good support includes a dealer that is conveniently located near job sites and can deliver needed parts and services quickly, Wright says.
Manufacturers also suggest trying a piece of equipment out by renting it before committing to buying it.
Getting the equipment that’s the best fit for the job can make a significant difference, Wright says. “Discover the strength of each piece of equipment,” he says “and rely on each piece to handle the job it does best.”
Rise of compact track loaders doesn’t negate compact wheel loaders’ usefulness
The fundamental difference between a compact track loader and a compact wheel loader is as it sounds: compact track loaders sit on an undercarriage with tracks, which keeps the machine stable. Compact wheel loaders, on the other hand, get their mobility from wheels and can be better in tight spaces.
Wheeled and tracked loaders are similar in the regard that they are versatile and can use many of the same attachments, but there’s one aspect that sets one machine apart from the other, and it’s causing a surge in popularity.
“Twenty years ago we didn’t offer compact track loaders. Today we do and they’re a large part of the compact equipment market,” says Mike Fitzgerald, Bobcat loader product specialist, adding the equipment was developed as a result of industry feedback.
It’s estimated that as much as 40 percent of the compact equipment market consists of track machines, adds George Chaney, skid-steer loader/compact track loader international sales manager at JCB.
Fitzgerald explains that more and more landscapers are moving to compact track loaders because of the benefits the design provides. The track system provides low ground pressure, which creates minimal disturbance, provides good grading capabilities and produces a smoother ride for the operator. The loader’s low ground pressure lengthens many contractors’ seasons because they can use the machines on softer ground late into the year without worrying that they’ll tear up the turf.
“These machines can work virtually 365 days a year since they have such good floatation characteristics, especially in muddy applications where traditional equipment would normally get stuck,” says Gregg Zupancic, John Deere product marketing manager, skid steers and compact track loaders.
Track loaders are also designed to handle well on slopes, manufacturers say.
The downside is that compact track loaders can be more expensive to operate than wheel loaders, due in large part to the higher maintenance cost involved in track loaders because of the track and undercarriage components, Chaney says. This is not lost on manufacturers. New Holland developed its 200 Series compact track loaders to make it easier for operators to maintain the undercarriage, says Curtis Goettel, brand marketing manager.
“With the easy track adjustment, using a standard wrench and grease gun makes for quick and easy service,” he says, adding several other features come into play to minimize service needed on the tracks and their frames.
Compact wheel loaders, on the other hand, don’t have the expensive track component, making the equipment more ideal to contractors with tight budgets. In addition, the wheeled machines offer the advantage of allowing the operator to sit higher for better visibility when truck loading and material handling applications, according to Doug Laufenberg, John Deere product marketing manager, compact wheel loaders.
Some models of wheel loaders also offer other benefits, including the versatility of auxiliary hydraulics to operate multiple attachments, the lower fuel consumption, improved visibility and ease of operation, says Keith Rohrbacker, Kubota’s product manager. Goettel adds that compact wheel loaders can travel more quickly from one job site to another.
For contractors who can’t decide between wheeled or track loaders, some manufacturers have found a way to be accommodating. Terex offers over-the-tire track options for contractors who own a wheeled loader but need the traction, flotation and versatility of a tracked loader.
The author is a freelance writer in Cleveland.
For the latest in compact loader products, click here.
Providing accounting services to the service industry for many years I’ve seen an assortment of differing financial statement presentations. Some clearly lack an understanding of proper transaction recording and statement presentation while on the other side of the spectrum I’ve seen Profit and Loss statements that are 10 pages or more. Many only present cash deposits as gross sales and lump all other expenses in just a few lines which gives an owner or manager no management visibility into his or her business. The longer versions written like a chapter out of “War and Peace” provide so much disjointed information that it’s difficult to see the forest for the trees. What they all have in common is that they fail to present financial and operational information in a concise manner to be an effective management tool.
As a manager of a land care business, when I look at a set of financials, my sole objective is to determine within one minute if the company is profitable and if the operational revenues and expenses are in line with standards that we’ve created for the land care industry. At year end, I’m looking to see how I can reduce my tax burden to its legal minimum.
Standard Chart of Accounts. Surprisingly many new clients we work with use a generic chart of accounts, one that an ice cream store or any other generic business can use. These charts are usually created such that an accountant can prepare the year-end tax return. The fact is that the IRS is looking for bottom line profits to tax.
The expense categories they want broken out are on the tax return.
While useful for calculating taxes, they provide little in the way of management reporting.
While preparing taxes are one use for a Profit and Loss Statement and an important one at that, the management information that comes out of properly prepared financials is invaluable in growing and improving a land care business. Look at a well prepared financial as a business building tool that should be looked at often. As such, the goal should be to present the firm’s financial information in a manner that allows the owner or manager to determine his or her true costs by department within one minute of picking up the statement.
So how is a “One Minute Management” approach taken to develop a useful profit/loss statement?
Group Revenues by Division and Service Agreement Type. The most important revenue in the land care business or any service business for that matter is recurring revenue. In land care, because most of us run divisions defined by skill set or marketing groups such as commercial, residential, fertilization, lawn maintenance and other services, and we keep those as major headings. Within those headings we are interested in recurring -route work, recurring – renewals and non-recurring jobs. Most dispatch programs used in the industry allow you to do this. The trick is bringing the information, as well as the related customer payments and accounts receivable, into a general ledger program, such as QuickBooks, in such a fashion that both programs reconcile to each other.
By segregating revenues in this manner, the successful owner or manager is able to determine the type of work he is doing and how much he can expect to repeat in the future when budgeting.
Group Expenses by Direct Costs, Marketing Costs, Sales Cost and General and Administrative Costs
Direct Costs are costs associated with putting a technician on the road or your true operational costs. These costs include technician wages, benefits, payroll taxes and uniforms. In addition to the costs associated with the technician himself, the cost of his truck, auto insurance, fuel, materials and others are also all direct costs.
Marketing costs and sales costs are often confused. Marketing is all activity to produce a customer lead. It includes advertising in print, online, direct mail, etc. Sales costs are all costs associated with converting those leads into sales. They include salesperson wages, payroll taxes, benefits, sales vehicles and all associated costs.
General and administrative costs are those costs that don’t fit into the categories above. Usually these costs are known as fixed costs as they are fixed over several volumes of business. They usually include cost of running the office, as well those other management costs.
The Importance of Gross Margins. Direct costs essentially indicate the cost of your operation. The gross margin, or gross profit as some financial professionals call it, is the revenues minus the direct costs. By looking at the gross margin we can determine if we are efficient operationally. It also tells us if we have done enough revenue volume to cover our non operational costs (i.e. marketing, sales and fixed) and allow us to show a reasonable profit.
The anatomy of the One Minute Profit /Loss Statement. While the above presentation describes a profit/loss that gives a viewer a one minute and accurate synopsis of his operation, what we all too often see are statements that have various staff compensation expenses (salaries, payroll taxes, fringe benefits, and retirement plan contributions) and other expenses clubbed together, making it extremely difficult to determine for the manager if total employee headcount and salaries are appropriate for the volume of business. The key to the simplicity that is required to create the “One Minute Profit/Loss Statement” is to organize the chart of accounts:
Minus: Direct Costs
Equals: Gross Margin
Minus: Marketing Cost
Minus: Sales Costs
Minus: General and Administrative
Equals: Net Profit before Taxes
Compare Results with Industry Benchmarks. If the steps set forth above have been taken, the owner or manager can easily determine his true profitability. The owner manager can further benefit by measuring these results against some industry benchmarking standards. Many well-prepared Profit/Loss statements compare the current year results against the prior year both for the current month and the year to date.
The most successful land care professionals also create an operating budget by month, and measure their actual results against the budget to measure their level of success.
Compute variances with standard. Once the “One Minute Profit/Loss Statement” has been set up with actual against the benchmark column (either prior year or budgeted amounts), it is important to see how the actual current year's results match up. To this end, I recommend a column showing the variance between the current year results and the benchmark selected so that the land care professional can easily determine if he or she is ahead or behind the "target." The variances provide a starting point for the land care professional to ask hard questions about why the company may or may not be measuring up to last year's performance, or this year's budget. These questions provide the basis for management changes required in order to improve performance.
Producing a “One Minute Profit/Loss Statement” that meets its objectives through the steps above doesn’t need to be difficult. General Ledger programs like QuickBooks are easily adapted to generate financial statements that meet these criteria. A competent CPA can help you set up QuickBooks and take information from your dispatch program and marry it with QuickBooks in order to produce the one minute manager reports.
Give your financials the "one-minute test." If you can't accurately determine your true firm profitability in a presentation that quickly gives you information you need to run your firm, it's time for change. Revising your firm’s financial statements as described above will more accurately reflect your firm’s true financial performance. But most important it will give you an effective tool to make management changes to improve profitability.
Daniel S. Gordon is a CPA in New Jersey and owns an accounting firm that caters to Landscape Professionals throughout the U.S.
Editor’s note: Every month are team of water experts from ValleyCrest Cos. will offer up their insight into the world of irrigation and water.
I appreciate Lawn & Landscape setting the tone for water management in the industry with a dedicated section for water management in every issue.
As one of the three ValleyCrestTakeson.com bloggers (joining me are Martha Golea and Alan Harris) given the chance to contribute to this section monthly, I feel this is an excellent opportunity to help make a change in how we manage water. Our goal is to promote water management and sustainability through interesting articles about these subjects.
What’s the issue? Every second the urban population grows by two people. Fifty percent of the world’s population lives in cities of 10 million people or more. According to the Global Environmental Outlook water withdrawals are predicted to increase by 50 percent by 2025 in developing countries and 18 percent in developed countries. According to the EPA, nationwide, landscape irrigation is estimated to account for almost one-third of all residential water use, totaling more than 7 billion gallons per day. In the west and other sunny areas landscape water use accounts for over 50 percent of residential water use. As an industry we have a large target on our back for regulation to reduce water use. In California just a 20 percent reduction in landscape water use would be equivalent to reducing all toilet water use to zero.
We have a choice. As an industry we have an opportunity to change the way we manage water. However, the opportunity to make the change is not unlimited.
I have heard more than one lawmaker explain a water shortage in the U.S. is a threat to homeland security.
When I hear the words “threat to homeland security” I know we only have a limited time to act before the government takes control of the situation.
What can we do? First we need to embrace the technology manufacturers provide for water management. I find only a small percentage of contractors recommend smart controllers to their customers. In some cases, I find contractors telling customers smart controllers only benefit the landscape contractor and they shouldn’t spend money on technology that only benefits the contractor. This is completely irresponsible and our industry suffers from these statements.
In most situations the fastest way to save water for customers is through the proper use of smart controllers. Lack of understanding is the main reason contractors stay away from smart controllers and education is the key to the technology. All contractors should consider the IA Certified Irrigation Contractor program. IA Certified Irrigation Contractors meet minimum experience requirements, pass a written exam and agree to a code of ethics. The IA Certified Irrigation Contractor and Certified Irrigation Designer programs were the first professional certifications to earn the EPA WaterSense label. The IA also offers courses for irrigation professionals who need to stay abreast of the latest technologies.
Also, check with local water purveyors about special “smart” certification programs they may be offering. Many water purveyors offer smart controller incentives to qualified residential and commercial customers. These incentives help make upgrading to a smart irrigation controller even more compelling to your clients. Then promote the benefits of smart irrigation controllers to new and existing clients.
Remember this is just a start. I have a strong desire to change the way we have been managing irrigation water and I need your help. Tweet me your thoughts @h2oTrends or message me on Facebook at Water Bloggers.
The author is director of water management solutions at ValleyCrest Landscape Cos. You can email him at firstname.lastname@example.org.
The 2012 Irrigation Show and Education Conference, will be the place where contractors can take advantage of education and innovative ideas designed to help your company grow.
The conference will run from Nov. 2-6 in Orlando, Fla., and will also give contractors the opportunity to explore new products and technologies, and network with product experts and industry colleagues.
A focus on your know-how. Again this year, the show brings to you new sessions and seminars intended to help you keep pace with the industry. This year’s education opportunities feature:
• Contractor point of connection sessions. Center stage show floor briefings return in 2012 with an updated perspective. IA has taken the spirit of the Point of Connection Leadership Summit – historically an annual conference designed specifically for the landscape irrigation contractor – and brought it to life on Center Stage. These business, sales and marketing sessions focus on topics that will help irrigation professionals strengthen their business and succeed in today’s business climate.
Event registration includes access to the exhibition, general session and irrigation seminars and technical sessions. Education classes and IA certification exams require separate registration. IA certification exam registration closes Oct. 19.
The closing night party is also a separate ticketed event.
For more information and full program details, visit
• IA updates. Also on center stage, IA Updates give attendees an opportunity to get the latest on IA initiatives, including residential and commercial irrigation codes and standards, government affairs, Smart Water Applications Technologies and Smart Irrigation Month.
• IA certification exams. Take any exam at the show to become IA-certified. A recent survey among landscape contractors, consultants and designers suggests that becoming certified and hiring certified is one of the top ways professionals differentiate their company from the competition.
• Seminars. These one-hour seminars address the concepts and implementation “how-to’s” of efficient water management.
• Technical sessions. Twenty landscape-focused technical sessions provide a forum for sharing the latest research findings, best practices and cutting-edge products, and ideas that promote efficient irrigation.