Ancient Greek and Roman astrologers named July 22 through Aug. 22 the “dog days of summer” because the Dog Star, Sirius, was visible on the horizon. They associated its appearance with heat, drought, lethargy, illness, mad dogs and bad luck. While I can’t offer any remedies to combat ancient superstitions, here are 12 actions you can take to reclaim control in 2020 and start next year strong.
1. Develop three operating budgets for 2021 – worst case, best case and what you truly expect to happen. Get input from your managers and update budgets regularly to stay on track for 2021.
2. Review current budgets to evaluate what adjustments need to be made for the remainder of the year.Fuel costs could provide significant savings versus budget given the current depression of gasoline prices. Analyze utilities, supplies and expenses which may have changed due to branch closures or employees working remotely.
3. Develop a Q4 contingency plan that includes scenarios like less than normal snow, a resurgence of COVID-19 or other worst-case scenarios. Challenge your team to come up with incremental revenue sources, like winter watering or hardscapes installation, even if it means producing, with a customer’s blessing, projects originally sold to be installed in 2021. Check with your administrative and finance teams to see if it makes sense to continue working remotely, simultaneously reducing some costs, while keeping your staff protected.
Look at your past plans, like buying new equipment, and see if the plans are still good financial decisions.
4. Re-evaluate plans requiring a large financial commitment toward year-end, like opening a new branch or major capital expenditures, to see if they still make sense. If employees are working remotely, you may not need more space. Equipment financing terms are very favorable, but if cash flow is tight, consider delaying budgeted capital purchases until next year. Have a conversation with your financial advisor about the implications of this move, especially if you use Section 179 depreciation tax rules to help mitigate tax liability.
5. Review routing. Temporary branch closures or other operational changes due to COVID-19 may mean that routes as they were originally set up are no longer efficient.
6. Improve bench strength. There has never been more talent on the market. COVID-19 forced many companies to part with good people that span every part of the green industry and they are available right now.
7. Survey customers to assess satisfaction levels and determine whether you need to try and improve key relationships before they become an unwanted budget adjustment in 2021.
8. Survey employees and find out what they like and don’t like about working for you. Other CEOs are seeing #6 as well, so work on becoming an employer of choice now.
9. Check credit card fees. Verify that your bids account for the fees your bank charges for processing client’s invoice payments via credit card.
10. Reconcile inventories of on-site materials at the end of Q3 if you have not been doing so regularly.Benefits include, generally stronger revenues (as opposed to Q4) to help offset one-time inventory write-downs and avoiding a write-off at year-end which leaves no ability to make up any resulting budget shortfalls. It also provides an opportunity to dispose of old or obsolete inventory or even potentially sell it back to the vendor to recover at least some of the original material cost.
11. Claim fuel cost credits for off-road fuel used in machinery and equipment from federal and state governments. This may result in a significant refund of fuel taxes.
12. Remove scrapped, stolen or sold equipment from the books before the end of the year. This helps ensure the accuracy of your balance sheet and that any personal property taxes levied in your state are only paid on equipment you own and that is in service.
Reprinted with permission GIE Media, Lawn & Landscape magazine. To view edition, go to: http://magazine.lawnandlandscape.com/article/august-2020/finish-well-and-start-strong.aspx