By Rose Epperson
Long before my family began working in the tree care, my father, a top salesman for Eastman Kodak, got a chuckle as he left for work on Monday morning proclaiming “I’m off to shake the money tree.” Little did he know what impact those words would have on his family. According to IBIS World research firm, the lawn and landscape lawn industry has grown to a $75 billion industry. There’s a whole lot of shaking going on.
My focus this year has been on looking at the big picture ~ defining our “why” and our “how”. We’ve looked at our purpose and passion, delved into not only what drives us but what drives the behavior of our employees as well. We built on the concept of relationship management and the importance of creating strong ties with our suppliers and stakeholders. All great concepts when looking at the whole “forest” that we work in.
The final ingredient is the “what”. The “what” provides quantifiable measures to gauge results. Employees must be able to make smart choices on how they spend their time with clear vision and goals – the “what” expressed in ways that are descriptive and quantifiable. Employers and employees together construct their own objectives and gauge how well they’re making a difference through their work. This is accomplished with solid job descriptions, effective evaluation processes and professional development. But what about the organization’s health and development?
Most of us developed our talents and skills with our hands in the soil or canopy, drilling down to the nuts and bolts (or the dollars and cents as it were) can feel like a foreign language. My lens is a bit different as my experience is in the administration side of the business focusing on safety programs and financial reporting. I have a lot of experience in that side of things but still continue to learn all the time.
Let’s look at the big picture view of healthy finances for your business organization. It starts with a good business plan. Good planning is something I write about frequently. It’s having sufficient resources, 4 M + T (manpower, machinery, money, materials, and time) to reach your goals. For the resource, money, there are standard tools to help us focus on the financial side of our operations.
A budget is the beginning of your financial plan the way to organize your financial resources and control your money. There several budget tools that play a big part and running your business. Accounting systems i.e. journals and ledgers. Report such as net worth statements or balance sheets that show our assets, liabilities and equity. And income and expenditure statements or profit and loss statements that shows our revenues expenses and profits or deficits. You may need an accountant or business consultant to help you set up your chart of accounts but there are several computer accounting systems that are user-friendly and easy to get going with.
The budget is a little bit different than other financial statements. It’s main goal is to manage and control revenues and expenses by estimate in the amounts of projecting them into the future. Budget numbers provide a map for the business to go in order to be where it wants to be financially.
The balance sheet is a snapshot of your businesses financial position at a certain point in time this can be any day of the year but that sheets are usually done at the end of each month the financial statement is a listing of total assets with the business owns and total liabilities with the business owes. The difference is owner’s equity or retained earnings. Owner’s equity refers to the amount of money the owner has invested in the firm this amount to subtract is determined by subtracting current liabilities and long-term debt from total assets remaining capital indicates the growth of the owner’s initial investment.
The profit loss statement shows revenues minus the cost of goods sold minus operating expenses plus other revenue such as interest and the net income or loss before taxes. One great tool is to compare your initial budget to your profit loss statement and see if there’s areas that need attention or budget items that need to be reviewed for accuracy and intent.
No one financial statement tells the complete story but combine they provide powerful information for business owners as well as investors i.e. your bank etc. They allow you to budget for employee bonuses and benefits and see changes in your business strategies that help you look at the big picture and into the future. It may not just as simple as “shaking the money tree” however organizing it is the best a method to making good decisions for growth and success.