Stream Audio "The Problem with PPP for Landscapers by Tony Bass"
(Download the audio file above by clicking “Download…”, then right click the audio bar itself and click “Save Audio As…”)
There’s a painful trend I’ve discovered in the past month.
The story began when we created The Wealthy Landscaper Productivity Challenge project back in June.
Our goal was to help landscape business owners compare their own financial productivity to competing landscapers. Our video and PDF handout provided the diagnostic chart to help contractors figure out if they have room to improve financial productivity.
We collected data, conducted phone interviews, and have begun to analyze the results. And that’s when we discovered a trending problem among landscape companies.
WE were VERY CLEAR in our instructions. PPP loan proceeds were NOT to be included in your company’s revenue for 2020. Loan proceeds ARE NOT income. Loan proceeds should be accounted for on the balance sheet, NOT the income statement. (A number of landscapers do their own accounting and frequently misclassify financial transactions.)
Further, the majority of lawn and landscape business owners we have interviewed were successful getting the Paycheck Protection Program loan. Facts are, the government was very successful getting the word out, encouraging business owners to apply, and getting banks to process the paperwork.
The average size PPP loan was $107,000 and 86.5% of all loans were under $150,000.
Injecting a small business with six figures of cash can be a game changer! In some cases, this much extra cash is a life changer! We included the headline from the PPP report below.
Here’s the full report from the US Department of the Treasury headed by Secretary Steve Mnuchin.
When you think about the size of our country, the amount of paperwork required, and how the typical loan process works, it’s amazing to see these loans happen so quickly. 😊 $$$
Unintended Consequences that Could Destroy Your Company…
To become a Wealthy Landscaper, you MUST operate your business 3x to 5x MORE profitable than the average landscape business. Failing to beat the average traps you in the rat race of being busy-busy-busy without a fat bank account.
Wealthy Landscapers are on a mission. They understand that bottom line NET PROFITS, plus steady W-2 income for doing a job inside your company, feed your family and grow Wealth. I’ve shared this statement with dozens of landscapers the past month or so:
I don’t care about your GROSS SALES…I want to see YOUR NET PROFIT plus what you pay yourself. Profit is the benchmark to determine if YOU are on the road to Wealth.
And here’s where the problem with PPP has reared its ugly head.
Landscapers with puny little net profits have been injected with a bunch of cash!
And suddenly, without ceremony or special accolades, they postponed doing what they should have done back in April and May.
They SHOULD have raised their prices.
They were not profitable BEFORE the crisis…and now they have been propped up with a government loan (that will likely be forgiven). The PPP money postponed their business failure!
I’ve been preaching about the sinful behavior of operating a lawn business without adequate profits. It’s sinful to your family. It’s sinful to the market. It’s sinful to your community. This practice MUST end.
Unfortunately, the weakest competitors, the LOWBALLERS, have new energy. They’re not going away this season. Nope…they can survive one more summer. Unless…
Here’s my recommendation…
If YOU know your numbers, and you know your Profits are puny, and your W-2 paycheck can’t get the bills paid…get yourself a healthy dose of business education with that extra PPP money you have sitting in your bank account.
This could be the last chance you get to fix your financial future. I don’t want you to fail! Protect your family! Listen…
The damage to our economy from this COVID-19 and a tyrannical government is far from over my friend. And the only way you will survive what’s around the corner is to build a rock-solid foundation for your business. Financial education is the success key.
My team and I are holding one of our highly acclaimed Profit Builder Training Events next month. Details are found here. I have 6 seats still open. We have a strict limit of 12 companies for this event. www.superlawntoolkit.com/profit-builder
I hope to see you soon.
Tony Bass, founder www.superlawntoolkit.com
PS – Could you be a lowball landscaper and not even know it? We recently revealed the 9 Signs You Are a Lowball Landscaper during this recorded webinar broadcast. https://superlawntoolkit.com/low-ball-thinking/
The video and PDF download is FREE, but registration is required.