Materials account for a small fraction of your direct costs as a landscape business owner. But in an industry with historically narrow margins, every penny matters.
Purchasing can be one of the more tedious aspects of running a landscaping company. Once a bid is won, you have to transfer the information from your initial estimate into a shopping list, then take that list to your approved vendors to order the necessary items. If the estimate is incomplete (or adjustments happen mid-project), you’re stuck scrambling to find what you need—and often overpaying for it.
Software like Aspire streamlines the process by automatically transferring data from your estimate to our purchasing assistant and allowing you to track job costs in real time. Without an integrated business management solution, this has to happen manually, which creates plenty of opportunities for errors.
No matter which system you currently use, you can improve your purchasing process today by avoiding these common mistakes.
Relying on limited local sources
Where do you source your materials? If you rely heavily on the same handful of vendors, it could be time to branch out.
While it’s great to build long-term partnerships with reliable, trustworthy providers, limiting yourself to a small set of sources can be detrimental in the long run. (We’re all familiar with the old adage: “Don’t put all your eggs in one basket.”)
In addition to protecting against potential problems, working with a wide variety of suppliers gives you access to a broader range of inventory—and possibly more competitive pricing. For design/build projects, new vendors mean new possibilities in terms of hardscape materials, leading to the kind of innovative designs that can keep your company relevant amidst changes in demand.
Using a wholesale marketplace like LandscapeHub greatly simplifies this process for landscape professionals by allowing you to upload a materials list, request quotes from a network of approved suppliers, and pick up or ship your materials.
Through an integration with Aspire's business management software, you can easily shop for what you need in LandscapeHub and automatically connect your order it to the rest of your job costing data in Aspire—giving you better insight into your bottom line.
Unrestricted purchasing processes
Depending on how your company is structured, you may have lots of people making purchases on their own as needs arise—with or without consulting budget dollars from the estimate.
Over time, this can present a threat to successful landscaping businesses. Having to clean up credit card errors or invoicing mistakes is expensive and can damage the reputation you've built through years of experience in the landscaping industry.
All landscaping projects should be managed and monitored according to your business plan.
Tightening your process so only a few individuals have the authority to make purchases can increase accountability, helping you hit your numbers at the end of each month. Limiting the number of people responsible for sourcing materials is also a good way to stay organized and keep direct and indirect costs accurately separated.
Waiting too long to contact vendors
The more prepared you are, the more efficient your purchasing process will be.
If you can, try to reach out to potential vendors and suppliers early in the year. Starting the conversation long before you actually need materials gives you the flexibility to negotiate pricing.
It can also lead to contract growing with certain vendors to ensure you have the right quantity and quality of plant materials when you need them, especially during periods of higher demand.
Failure to negotiate
By collecting quotes from multiple vendors far enough in advance, you may have some wiggle room to negotiate lower costs.
Don’t be afraid to question suppliers about what they can do for you. A better deal might not always be available, but it doesn’t hurt to ask—and even the smallest cost-saving efforts can have an impact.
You could also consider asking vendors if they offer incentives for referrals. If so, and if you can recommend them in good faith, it could be worthwhile to share their info with others in the industry.
When you order materials early, consider asking vendors if they’re open to extended terms to make things easier on cash flow. You may be able to get a discount on a pre-order, for example, but postpone payment until the order ships.
Inaccurate purchasing data
When you use a series of disjointed solutions and manual processes to run your business (we call this a “frankensystem”), there are myriad opportunities for human error.
We’ve all experienced the frustration caused by missing a decimal point, accidentally skipping a row in Excel, or losing track of important information jotted down on a sticky note.
Managing purchasing within a frankensystem can be a time-consuming and frustrating process, but if you’re not ready to transition to an integrated business management solution yet, improving your data hygiene (e.g., making sure files are complete and up-to-date) can help in the interim.
If your lawn care business is losing money on frequent, unplanned purchases, it could be a sign of poor data hygiene. When you can’t rely on “shopping list” information to be accurate, it’s hard to plan well. Data accuracy is critical to staying within your budget and being able to anticipate upcoming costs appropriately.
Not raising prices
While it’s not technically a purchasing mistake, failing to raise your own prices when material costs go up can cause more problems than you realize. (Did you know most landscape companies underestimate their costs by at least 1%—or $48,000 for a $3 million company?)
Natural disasters and other events (like the winter storm in the southern United States in early 2021) can have a dramatic effect on inventory, creating supply and demand issues that cause prices to surge. If you don’t compensate for this increased cost by adjusting your own pricing, you can end up losing money.
By keeping an eye on pricing trends during the purchasing process, you can track changes and use that information to adjust the prices in your bidding kits accordingly.
It’s much easier to maintain a reliable purchasing process with software that offers full, end-to-end business management functionality. In Aspire, all estimated materials transfer to the purchasing assistant immediately once a job is won.
From there, you can view materials lists for one—or all—of your landscaping services and prepare a shopping list. Through our integration with LandscapeHub, you can then upload purchase receipts to multiple vendors to find the best price.
Even if you’re not ready to take the plunge yet, avoiding these six common mistakes can help reduce purchasing headaches and unanticipated expenses.
To have more advice for landscape contractors delivered right to your inbox, sign up for our free weekly email newsletter.