By Tony Bass ©2011
I had a private conversation with a client yesterday. He is working on his business plan for 2011 and he is considering a price increase. He and his wife (also business partner) are not satisfied with their pay. In fact, it has been several years since profits and their personal salaries grew.
My client said, “Tony, fuel costs are rising again. Employees are looking for raises. Equipment costs are increasing. Cell phones cost me a bundle. And then I have the big question about how to deal with the coming mandates of health insurance. Should I begin to raise prices now? I am currently using $45/man hour. I want to increase to $55/man hr. What do you think Tony?”
My clients across the country are asking this question with growing frequency. So I thought you would like to get the answer. Should you raise your prices in 2011 and if so, by how much?
The answer can be found by first asking a question. Will it cost you more to operate your business in 2011? If so, how much more?
Let’s look at my client’s question from purely a mathematical standpoint. How much does he want to raise his prices?
$55/hr new rate – $45/hr old rate = $10/hr price increase
$10/hr divided by $45/hr = 22% price increase
So I asked my client the best possible question. Have your costs increased by 22%? And he said, “I am not sure, but I know they have gone up.”
I said, “I agree. Some costs have gone up, but almost nothing has increased in costs by 22% in the last two years. Nothing. We have just experienced the closest thing to deflation (lowering prices) as we have seen since 1929 to 1935 (you and I only read about those days). In many cases, companies have learned how to lower their prices in the last two years.”
I continued, “But here is a fact. After working with several hundred privately held companies, I have learned this: No two companies are alike. And, what is going on within the economy, within our industry, or within your community may not reflect what’s happening in your company. You may need to raise your prices or you may need to lower your prices. And you can’t know for sure without a well written financial plan. Call it an operating budget. Call it an overhead recovery budget. Call it a money plan. Call it what you want, but your list of expenses better be in writing and it better be an accurate reflection of your true costs in business. And true cost means paying yourself a salary, your partner (wife) a salary, providing yourself a respectable benefits package, and producing a profit after all the bills are paid.”
So, will you raise or lower your prices in 2011?
As my private clients and I have worked through 2011 financial plans, I have recommended lowering prices for some clients (they look at me funny and ask a lot of questions) and I have recommended raising prices for other clients. No two companies are the same. No two companies are in the exact same place in the development of their company. No two owners have the same hopes, dreams, goals, and skills. So the only logical answer is:
Do you have process to build a financial plan for 2011? Can you accurately forecast your costs and then follow your money plan for 12 months?
Many of you don’t have a written financial plan. There are lots of reasons why.
- You have never been taught how to build a budget.
- You don’t have time to build a budget.
- You have built a budget in the past, but then everything in the company changed.
- You simply don’t like to sit quietly and crunch numbers.
- You don’t know who can help you build a budget.
A few business owners do have a budget, but it is simply not accurate. Here are a few reasons why.
- The person who has helped you build a budget in the past doesn’t know the landscape industry. So, they were unable to coach you to manage the five critical financial benchmarks inside a landscape company.
- Budgets must be adjusted as you execute the business plan. Many of you fail to take time to review your budget and make adjustments during the busy season.
- Budgets must be adjusted as input prices change. Frankly, I fear the time we face rapid inflation. Many of you will be unable to adjust your budget and raise prices in response to rapid inflation and rising input costs.
- Some of you simply lack the education and training to read financial statements. When you look at the financial reports, you simply get confused. So you just give up, walk away, or simply avoid the topic.
To lower prices or raise prices in 2011, that is the question. In fact, this is the question every year in business. This question is never going away! You will have to face this question forever…..as long as you own and operate your company. It’s time for you to learn how to find the answer.
I can help you answer this question…..correctly….for you and your company. I can teach you the process to master your money plan. Once you have this skill, no one will ever be able to take it away from you. This skill will not become obsolete over time. And each time the economy shifts, your company changes, or your goals change, you can adjust your money plan.
Since 1998 I have been teaching this financial planning process to individual company owners, management teams, and in small groups. Yes, over the years, hundreds of company owners have learned this skill with me at their side. In most companies, it takes two ten-hour days of focused work. For companies with a few million in sales and a hundred employees, it can take a bit longer.
I have an hour by hour agenda of each and every word spoken, each and every question asked, and each and every topic we will discuss. And if you participate in this process, you will learn exactly what you need to do within your company in 2011…..and ever year in the future.
I have recently synthesized exactly what I do during the private meetings, added new support services, and enhanced the financial training process to insure you learn it, do it, and profit from it.
Introducing SLT Profit Growth Series Training Program for Landscape Company Business Owners
This program is not for crew leaders. This program is not for account managers. It is for business owners, CEOs, CFOs, Presidents, or VP level employees. During this program we discuss money. We discuss your money, your employee’s money, your vendor’s money, and your investor’s money.
This program is not a cheerleading event to get you excited. Although the thought of finding out how to gain control of your money, to earn more money, and to waste less money is exciting. You (likely) will be excited when you discover exactly how much money it costs to operate your business in 2011. You will be energized when you know your exact sales goal for 2011. You will know exactly what you must do to create a wildly profitable year.
This is not a group exercise where you share notes, discuss philosophy, and arrive at consensus of the group. This training program is exactly what you need to get your financial plan put onto paper, prepared for your accounting software, or organized into an excel spreadsheet. This program is about money and your business.
And just now, I have enhanced the educational process with a six-month coaching program to help you stay on track, get fast answers when you need help, and insure you learn how to use your new skill to improve your profitability. For example, watch this short video.
Know your costs, build your money plan, and you can control your financial future!
So, if you are not satisfied with the amount of money you earn, the benefits package you receive, the bottom-line-profits in your firm, or you are just unsure how good you are doing, I want to help you. I am inviting you to work with me, personally, to improve your business.
Here are the details…….
We begin the training program with an intensive weekend meeting. I will teach you how to build a written financial plan for your company in two days. You will discover your true costs for operating your company while providing a world-class benefit package that you and your family deserve. You will leave the meeting with your financial plan under your arm.
This financial plan will be used to establish precise sales targets, cost controls, and financial business management benchmarks. You will learn the exact hourly rate for your company. You will learn the exact process multi-million dollar landscape companies use to maximize profits on each and every contracted job. You will learn how your company financial plan compares to others in your area. You will learn about the four kinds of money in your business, how to organize and read financial statements. You will learn how to lower your costs in critical areas in your business. That’s day one…..10 focused hours.
Estimating landscape work is a science. You will learn how to utilize production rate based estimating for landscape construction and landscape maintenance jobs. This process will teach you how to avoid the common errors of under-estimating labor and equipment hours to complete both simple and complex jobs. When you learn the step-by-step production rate estimating process, you will watch your profits grow.
You will learn how to use an estimating process that accounts for all project costs in advance and provides you a management tool for the field. You will enhance your field measurement and plan take-off skills. With newly acquired estimating skills, you are prepared to take-on larger, more complex, and more profitable projects. You will learn how to apply profit to all bids with confidence, regardless of the economy. That’s day two….10 focused hours.
Accurate estimating allows you to double your profit without doubling sales! But only if you know your costs first.
Over the next six months, you will be coached to use the written budget to better manage your company. Armed with a financial plan, you are prepared to improve financial decisions as you face each one. You learn to manage using numbers. You simply gain control of money and your business. With your personal coach, you are never alone. One focused hour per month.
The Profit Growth Series Training Program is designed for company owners who would like to grow revenues or bottom-line line profits. If you are not satisfied with the amount of money you earn, the benefits you receive, or the yearly profits of your firm, you should enroll in this training right away. Participants will receive world-class training from SLT landscape industry experts starting with our founder and President, Tony Bass.
Two-day budgeting and estimating workshop with your SLT business coach $5000
6-month membership with SLT coaching program $1200
Pre-workshop questionnaire and private business analysis with your coach $247
Budgeting and Estimating Business Manual Book $75
Total Value $6522
Business owners invest this each month to have me one-on-one in their office. But with the new program, designed for a small group of non-competitive business owners, you get a huge discount.
Special Discount $4527
Registration till Mar 15, 2011
$1995 per company
Limited to the first 20 company owners (max 2 people per company) enrolled prior to Mar 15, 2011
Registration after Feb 7 and the after the first 20 company owners is: $2495
FREE BONUS for all attendees – 26 weeks – Two Minutes with Tony audio training program – This will compliment your training. For 26 weeks you will receive a short audio message reminding you of the education received and how to apply it in your business. FREE.
Event Dates: Friday Mar 18 and Saturday Mar 19 and Sunday Mar 20, 2011 – Location Atlanta, GA
Meeting Times: Friday & Saturday 8 AM – 6 PM then Sunday 8 AM – Noon
Register – You must call 866-923-0027.
Do not delay, this is YOUR opportunity to receive world class training at a fraction of the cost that hundreds have gladly paid.
When you call my office, we will answer your questions. When you call my office, we will gladly give you our list of clients who have paid $5000 plus to receive this training. And you call 5 or 10 or 20 of these company owners, and ask them about working with Tony Bass.
Listen, go ahead a register before Mar 15, 2011. Take action now and avoid the $500 price increase……and reserve your seat before we sell out of space. 866-923-0027
I look forward to working on your business.
Tony Bass, CEO & Founder
Super Lawn Training & Education
PS – If you and I have never met, I invite you to do a little research. Just google my name…..and see what’s out there. I challenge you to find anything but glowing remarks, useful information, and evidence of success everywhere you look. The money you pay to attend this event is an investment in your own education….and I am here to insure you get more than you pay for…..more than you expect….and you will become my next success story.
Want to learn more? Watch or just listen to Should You Raise or lower Your prices in 2011? Courtesy of Green Industry Pro Magazine.