“Cash is tight right now. I’ve gotta cut my expenses or I’ll have trouble meeting payroll.”
That’s the message we’ve heard six times in less than 2 weeks. But wait…it’s the first time we’ve heard this in all of 2022 from our client base. Reckon why we are hearing this in July of 2022?
Three BIG Reasons Your Cash Flow is Tight & What to Do About It
FIRST…
Let’s face the facts on the economic big picture. According to the Bureau of Labor Statistics (BLS) Consumer Pain Index (CPI) inflation data as of June 30, 2022, the inflation rate has reached 9.1% year over year. We’ve gone on the record with our real-life data analysis and called out the BLS data as a big fat lie. You can read the Fedzilla is Lying report here.
We admit that we are NOT an economist. But we confidently demonstrate our ability to do simple math. The Producer Price Index is the forward looking indicator of inflation data. It reveals inflation is running 11.3%. Once again, we prefer to do our own math. We don’t trust Fedzilla to tell us what inflation is.
Yes, inflation is running closer to 15% for real people who own and operate equipment. Inflation is running closer to 15% for real people who eat food, drive trucks and hire hungry employees. Fedzilla has goofed up our entire supply chain with more screw ups coming just around the corner. But let’s get back to what YOU can do to protect YOUR company and YOUR family.
The fastest and easiest way to fix your cash flow problem requires almost no gasoline. You simply MUST Raise Your Prices! You must raise prices on your current contracts AND all future contracts. You can’t expect to maintain any type of profit margin if you fail to raise prices under these inflationary conditions.
We shared the exact steps to do this mid-season without losing customers on the mid-2022 pricing update webinar. You have immediate access to the recording right here. Registration is required. (A handout is available for instant download to guide you through the webinar and make note taking fast and easy!)
If YOU have been slow to raise prices…well…you and your company could be destroyed. This is a serious matter. We estimate you have less than 12 months of independent business life left in you if you fail to raise prices.
(JOIN US NEXT MONTH AT PROFIT BUILDER TO LEARN HOW AND WHEN TO RAISE PRICES – YOU’LL GET STEP-BY-STEP INSTRUCTIONS ON HOW TO FIGURE OUT WHICH OF YOUR CURRENT CLIENTS NEED A PRICE INCREASE AND YOU’LL BE GIVEN A LETTER TO USE TO MINIMIZE PRICE INCREASE CANCELLATIONS… YOU’LL ALSO LEARN EXACTLY WHAT TO CHARGE TO PROFIT FROM NEW WORK)
SECOND…
Many lawn service companies act like banks for their customers. They issue 30-60-90 days of services without collecting a paycheck. Of course…the last 90 days (April-June) is THE busiest – high labor intensive time of the year in the landscaping business. So…while YOU’VE been paying employees, purchasing high-priced gas and higher-priced supplies, you’ve tied up your cash. Now it’s time for you to STOP WORKING for anyone who isn’t paying up. Your accounts receivable MUST be collected. Here’s a quick example.
We have a client who picked up a seven-figure lawn service contract that started July 1, 2022. The fortune 500 publicly traded company clearly explained it was going to take 90 days to pay the first invoice. Our cash-flow protection plan included a NEW billing process for the landscaper. We now bill the monthly service fee on the first day of each month. We don’t provide 30 days of service and THEN send over an invoice. Nope. That would be cash flow suicide for the landscaper.
If you want to improve cash flow…without trying to work longer hours or do more of the work on your own…then update your billing system. And…cut loose customers who aren’t paying you within your agreed terms. Cash flow will improve very quickly if you follow this plan.
(23 MORE “QUICK CASH” STRATEGIES AVAILABLE HERE)
THIRD…
Busy – Busy – Busy. We must stay BUSY! At least that’s what a lot of landscapers think. In fact, I had a brief conversation with the Governor of Georgia the other day. Brian Kemp asked, “Are y’all staying busy?”
My instinctive reply was, “Yes Governor. We are busier than anytime in our company history.” And he said, “That’s good to hear.”
I smiled and replied with the politically correct response on this special day, “Thanks for the tax cut on gasoline. Your work will help our industry.”
In hindsight, here’s what I SHOULD have said to Governor Kemp.
“Governor. The better question to ask a business owner would be, How are your profits today compared to last year? There’s no glory in being busy. Growth in profit…that’s the right benchmark to judge success in this economy.”
Here’s my point.
Your biggest expense in your business is LABOR.
Saving 30 cents a gallon on gas ain’t gonna fix your cash flow problem. Stopping your subscription to Netflix won’t fix your cash flow problem either.
In fact…Cutting expenses is NEVER the way to become The Wealthy Landscaper. There’s not enough fluff in most small business overhead to cut your way to financial independence.
Here’s the action item for the second half of 2022 – revenue enhancement is your friend. You need to maximize the utility of your labor force. You need to meet or exceed the income generated from April 1 to June 30 between the dates of July 1 and September 30.
Yes…marketing and sales activities are way more profitable than canceling your membership with the National Association of Landscape Professionals, your state green industry association or your membership with the chamber of commerce or your subscription to your CRM.
There’s unlimited upside potential when you are adding revenue. There’s limited potential when you start cutting expenses.
The problem is many a landscaper has had sooo much business opportunity but sooo much trouble finding productive employees, the growth mindset has been put out to pasture the past couple of years. We’ve been beating new customers away with a stick…just so we can take care of our dear, old, loyal customers. The growth mindset has been slowly dying for all but the boldest among us.
Where do you stand today? Are you ready to throw in the towel for 2022 revenue growth? Or, will you turn on your marketing machine and go for growth?
(WE WILL HAVE A DETAILED DISCUSSION ON MARKETING AND ADVERTISING AT OUR PROFIT BUILDER COURSE NEXT MONTH IN ATLANTA. WE WILL INCLUDE WHAT YOUR MARKETING & ADVERTISING BUDGET SHOULD BE AND WE WILL ALSO TEACH YOU SOME TECHNIQUES TO USE THAT WON’T COST YOU A DIME.)
What do you think? Let me know your plans for the second half of 2022.
Profit Greatly,
Tony Bass, founder
1866-923-0027
Super Lawn Technologies
866-923-0027
PS – We’d love to have you at our Profit Builder event next month in Atlanta. This event is a game changer, and it could make the difference between your business’ success or failure in the coming months. Please… don’t use the excuse that “it’s too far away”, “it costs too much” or “I don’t have time”. Invest in yourself. Invest in your company. Invest in your future.
