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So you want to be a best-in-class landscape company? Well, first you have to know what that means. Becoming a top performer in anything you do requires setting measurable, realistic goals and then working to achieve them.
According to Aspire Software Founder Kevin Kehoe, best-in-class landscape companies on average earn 16 percent net profit. When owners and managers of landscape companies understand that a double-digit profit margin is possible, their path to reaching it becomes clearer.
That’s why Aspire Software introduced AspireMetrics, a business intelligence tool that provides benchmarking and best practices information for landscape companies. The report breaks down data into groupings based on revenue, region, and service lines and includes analysis from Kevin. AspireMetrics is something many customers have been looking forward to.
“We’re always open to more information to better ourselves and see where we stack up,” says Adam Boyette, regional manager for Yardnique, based in Morrisville, N.C. The company has been using Aspire Software since early 2018.
Earlier this year, Yardnique elected to participate in the AspireMetrics program, allowing Aspire to use their data in benchmarking reports. Yardnique reported additional information to Aspire, such as salaries. All of those details were aggregated and compiled into the “2021 AspireMetrics report: Benchmarking and best practices for landscape businesses,” published earlier this month.
Kevin says he knows many landscape companies seek accurate industry-specific benchmarking data based on his decades of experience as a landscape industry management consultant. He also knows what an impact it can make.
“If my clients could see real numbers from high achievers and understand how they got those numbers, they would then be willing to make the changes necessary to make more money,” he says, noting he has been compiling this type of data from his clients for more than 25 years. Now, he can collect, mine, parse, and analyze data on a much larger scale thanks to Aspire’s reach. The company has more than 60,000 users entering data daily.
“We can get at this data, as well as collect other qualitative data directly from our clients, to get a deep and real understanding about how to make money and achieve 10 percent net margins consistently,” Kevin says. “By comparing your numbers against industry data, you can chart a path to achieving best-in-class performance.”
How to use benchmarking data
Ideally, Kevin says, landscape companies should use the AspireMetrics benchmarking information as they formulate their long-term plans. The report includes targets in the following areas:
- Cash flow and net profit
- Income statement
- Key performance indicators for labor, overhead, and equipment
- Labor cost: direct and indirect hours
- Gross profit by service line
- Productivity and compensation
“Most of it is geared around building an annual budget with targets and goals,” he says. “This is a longer-term look at ‘Where am I now and where do I need to be to get from 6 percent to 10 percent (net profit)?’”
Like Boyette, Shayne Newman is an Aspire Software user who is participating in AspireMetrics to have access to data to gauge his company’s performance.
Newman is the founder of Yardscapes Landscape Professionals in New Milford, Conn. The company has been using Aspire for around eight years. Since adopting the software program, his goal has been to keep his team focused on inputting data correctly to ensure the reports he gleans from the system are as accurate as possible.
He’s still diving into the 2021 AspireMetrics report, but he sees value in using the benchmarks—especially for labor costs, which he says is the biggest factor in a landscape company’s success.
“If there’s material waste, that’s not good, but labor is the biggest thing,” Newman says. “If we have red flags in labor, we need to do something.”
Looking at the report, he’s happy to see his company’s labor costs are a point lower than his peers in the Northeast, according to the report. He foresees using the data provided about gross profit by service line to help manage his company’s own targets by division, and he can imagine other contractors—some of whom can get “equipment happy,” he says—could benefit from the comparative data provided on equipment leverage ratios.
Like Yardscapes, so far Yardnique is using the AspireMetrics information as a “gut check” to assess how the company is performing, Boyette says. He also shared the data with his company’s CFO as a point of reference for future financial discussions.
“Seeing where we stack up—are we in the high or low range?—it’s just a good data point to have,” he says. “If it’s way off the mark, are we missing something?”
Labor, materials, and subcontractors are the top three areas Boyette says he keeps an eye on.
He says, “We haven’t had to make any real changes based off that (AspireMetrics) information yet, but it does help give us another check when we look at budgets and actuals.”
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