By David Crary 
It’s easy to confuse making your business more profitable with making your business bigger. Unfortunately, getting more customers or expanding to new services will not necessarily increase your profits. You need to be making a fair profit on each account for growth to be helpful to profits. Rising costs and lower bids are putting heavy pressure on green industry profits. Business owners need to be vigilant about watching their accounting statements and keeping their contracts as profitable as possible. Here are a few strategies to make your green-industry business as profitable as possible:
1. Bid jobs with a healthy margin
Don’t make your goal to have the lowest bid. Make sure you have a competitive bid, but you can’t offer the lowest rate if it doesn’t add up to a healthy profit. You have to make your selling point about your quality workmanship, dependability or customer service. If you try to be the very lowest bidder, you will have lower profits than your competition, and you will go out of business due to lack of funds to maintain your business. Take the time to figure out exactly what it will cost you to do each job, and go through your analysis with your potential clients. Show them how carefully you will take care of them and why it costs what it does to service their property. Your attention to detail may land you the job, but if it doesn’t, don’t worry. You don’t want to get jobs that you can’t make money on. It’s better to work on making your existing and future accounts profitable, than to blindly seek as many customers as possible.
2. Don’t do jobs outside your mastery
Know your niche. Don’t accept jobs and just assume that you will be able to do the job correctly and efficiently. When you do this, usually there are lots of unforeseen costs and delays that drain the profits from the job and can even end up costing you money. It will be much harder to please your customer and you may lose clients due to poor execution. Put your best foot forward and do jobs that fit your expertise. If you want to expand into a field that you have researched and found to fit your profit margins, then plan exactly what you’ll need and become an expert at it before you add it to your of services.
3. Challenge your team to try to beat the bided time
One of the highest expenses for many green-industry businesses is labor costs. You can lower these costs without lowering your employee’s hourly rates by challenging your crews to beat the bided time on each job. When you create your bid, you always make an educated guess about how many labor hours the job should require. Share this time with your crew and challenge them to try to beat it. This keeps labor hours in the forefront of your crews mind and encourages them to go faster. It also helps team building and crew motivation. Reward winning crews with something that your employees value but isn’t too costly to the business.
4. Create systems that can be maintained and duplicated
Successful business owners create systems that are easy to keep up and replicate. Set up a system to make sure all your bids are profitable by the appropriate margin. Make another to figure if a new service will be profitable and viable for your business. Make another system that provides checklists for each job site. Make a system for finding and following up on leads. Create a simple and effective plan for each area of your business. Using planned systems will make your business run like a well-oiled machine, which will spell success for your business. Make sure you use your systems to check the profitability of all areas of your company. Smart systems will raise profits through higher efficiency and fewer mistakes.
Make profitability a high priority in your business. Balance it carefully with other aspects of your business such as customer service and quality workmanship. You can’t succeed as a business if you don’t know what your numbers look like. Decide what profit margin is appropriate for your business and strive to reach that margin on all your accounts. Use the tips above to plan well and work efficiently, so you’ll achieve a healthier and more successful green-industry business.
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