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Budgeting

by | Nov 9, 2021 | Business Strategy | 0 comments

How To Help Budgeting Be Less Painful

Written by Joseph Toppi

Whether it is with personal or business finance, budgeting can be a struggle, time consuming, and sometimes down-right complex; not to mention the uncertainty and the questions that come up when thinking about making a budget.  For example:

“What do I include?”

“How much should I budget?”

“How do I follow my budget?”

Budgeting does not have to be painful, and it is vital to running a business. Being diligent with a budget can also be the difference between profitability and insolvency… direction and chaos… predictability and guesswork.

There are different types of budgets, but for this article we are going to take a look at an overhead budget, and answer the questions above. 

What Do I Include?

To best answer this, we must first look at what overhead is. In the simplest form, I define overhead as “the amount it takes for a company to be in business with no work going on.” If there is no work going on in your business, what are the things you would still need to be paying – rent, utilities, sales person, CEO, etc. Without knowing what to include in your overhead budget, you could inadvertently be charging too little, and hemorrhaging money.  It is important to make an extensive list of the overhead of your business. Some commonly missed items on an overhead budget are:

  • Warranty & Service
  • Un-billable Hours or Indirect Labor
  • Professional Fees (lawyer, accountant, etc.)
  • Estimating & Bidding
  • Indirect Materials
  • Sundries
  • Company Events
  • Bank Fees & Interest
  • Company Apparel (and other promotional items)

If you are unsure on what to include, ask yourself the question: “If I had no work going on, would I need…?”

How Much Should I Budget?

The amount you should budget per line item is going to be different for every company. The best way to get started knowing what to budget, is to look at the previous couple of years’ income statements.  The income statement is broken into revenue, costs of goods sold, and expenses.  The items under expenses are what your overhead is – for the most part. Take the line item amounts as your starting point, then ask yourself a few questions:

“Based on my goals set for the year, will this be enough?”

“Was I efficient last year spending this amount on ‘X’, or can I decrease my budget through better efficiency?”

“Do I anticipate a growth – or lull – season that I should account for?”

Do your best to be as accurate as you can be to achieve optimal control of your business’ profitability.

 

How Do I Follow My Budget?

Just like with goals, a budget can only be achieved and followed if it is before you, and the progress is tracked. The simplest answer is data tracking and budget-to-actual records. Let’s take a look at each of these.

Data Tracking – This does not have to be complicated or stressful, but does take diligence and a good system. It starts with discipline from the business owner to ensure that the expenses are accounted for, followed by good bookkeeping that allocates these expenses to the right line item. A good bookkeeping software will be able to track this for you, as long as it is entered in correctly by the bookkeeper.  That is why it is so important to have a good bookkeeper, and bookkeeping system.

Budget-To-Actual (BTA) – This is done by taking all the data you have tracked, and putting it into a program or spreadsheet next to your budget.  Having the amount budgeted next to the amount actually spent allows you to see where you are.  Updating and reviewing your BTA often allows you to make more budget friendly decisions, and will lead to more control over your budget.  For example, let’s say your Company Apparel budget for the year is $5,000, and in September your BTA shows you have already spent $4,500 on company apparel, then you can make better choices on how much winter clothing you are going to buy.  

Without creating a budget, tracking data, and compiling it in a way that allows you to review it; you are running your business blind. At that point, the financial aspect of your business – and it’s profitability – is just a guess. 

For more specific one-on-one budgeting help, sign up for our Thrive Finance Package today!

Why is Strategic Planning Important?

by | Oct 28, 2021 | Business Strategy | 0 comments

Why Is Strategic Planning Important?

Written by Kevin Martlage

It was the great New York Yankee Yogi Berra that once said, “If you don’t know where you are going, you might wind up someplace else.” That quote is so incredibly relevant especially when you think about the future of your tree care company and your organization. Sure, you may run a successful business that is taking the tree care industry by storm but is your current path sustainable, is it profitable, and most importantly are you achieving all that you can? Do you have a clear goal in place for the next 3-5 years or even next year as you continue to build your company and your team? If not, you will certainly end up someplace, however is that place where you ultimately want to be?

The myth about strategic planning is that it is considered by some to be an arduous task that takes a lot of time and energy to develop a plan to achieve something you were already on the path to achieving. While strategic planning does take some time and energy, if done intentionally and correctly, it will help you define the proper path for your organization that will lead you to new heights and ultimately the personal and professional goals of you as the owner, your team, and the organization. 

Strategic planning involves the organization taking a close look at several different areas to develop a plan for the next 3-5 years. A plan that will help identify key milestones, deliverables, resources, and opportunities to achieve both short term and long-term goals for the organization. There are many ways to complete a strategic plan as the basic concept has been around for hundreds of years. However, if you approach the development of your strategic plan with an infinite and long terms mindset it can help you clearly identify a path for your organization that will determine what else may be possible. 

When I lead organizations through the strategic planning process we typically focus on 5 keys steps:

  • Confirm the Why
  • Review performance and current state
  • Identify what is possible
  • Determine how we get there 
  • Implement and monitor

The most effective way to start your strategic planning process is to determine, or validate, the “why” of your organization. Why are you in existence? Why do you have a tree care company? Why do you do what you do? Without a good understanding of your “Why” you will be creating a plan that is not in alignment with your organizations core values, mission, and purpose. The “Why” is considered the lifeblood of any organization and without it you will ultimately just end up someplace else. 

After determining or validating your “why” you then need to look at what got you to where you are today. This is completed by taking a deep dive into your current organizational performance and the past 1-3 years. This not only provides you the opportunity to look critically at your organization, but also provides insight into success stories, enhancement opportunities and ideas as to what else may be possible. Typically, this is the most enlightening part of the process as it encourages those working to create the plan the opportunity to step back, take a deep breath and look at the specifics of their organization from a different perspective than the day-to-day work. 

Now comes the fun part of the strategic planning process, the ideation and determination of what’s next? Where do you want to go as an organization? Do you want to maintain the path you are currently on, tweak it a bit to head toward other opportunities, or is it finally time to make some adjustments that will successfully set us up for long-term sustainable growth? Without a clear path you will end up someplace, but maybe not where you want to be. Walking through the determination of where you want to go and what you want to do over the next 3-5 years is a process that can take on a lot of different forms. The key to this is that whatever is determined or identified as a viable long-term goal, it must align with the “Why” of the organization. Without that alignment, you will once again be heading down a path to somewhere else. 

After key long term goals of the organization have been identified, it is now time to ensure that an effective operational and business plan is created to support the goals that have been determined. Too often, I have worked with organizations that have created a great plan, however it sits on the shelf and never gets looked at or used. Just as important as the plan are the steps you will take to achieve that plan and the commitment to keeping the plan alive. To develop those steps, you once again must look critically at your organization to determine the following regarding your goals:

  • Do we have the resources necessary? 
  • Do we have the knowledge necessary? 
  • What are some potential roadblocks that we need to proactively identify?
  • What are some outside resources we may need to engage?

Based on your gap analysis between the current organization and the future goals, specific next steps will need to be determined to ensure that the goals can be achieved.  Implementation of your plan, then becomes the next step to ensuring that you continue towards the place you want to be. 

Ensuring that a solid operational and financial plan is in place, will help your organization continue to have the support and ability to achieve the plan, but only if the entire organization is committed to and aware of the plan. Communication is key in this phase of strategic planning. The entire team must be aware of the plan that was created to ensure that everyone is driving to the same place on the map. It is up to the leadership of the organization to ensure that a clear understanding of the plan is in place and that everyone on the team is aware of how they impact the plan daily, weekly, monthly, and annually. 

Strategic planning is extremely important for any organization regardless of how small or large you may be. For those larger tree care companies, strategic planning will help ensure you are continuing to be sustainable and maintain relevance to the industry and your clients. For the smaller to medium size companies, strategic planning will also provide you those things, but it can help take you to new sustainable heights as you take your organization to the next level. In either scenario, a good strategic plan is important to not only your organization and your team, but ultimately the overall tree care industry. 

To learn more about how strategic planning can enhance your organization, I encourage you to look at our Thrive Risk Management Strategic Planning package. In just 4 short weeks we can help you identify who you are as a company, what you want to become, and what strategic milestones will be needed to achieve your goals. 

Growing Your Human Resource Assets

by | Oct 11, 2021 | Employee Management | 0 comments

Growing Your Human Resource Assets 

Written by Jim Skiera

The most common growth limitation I hear from business owners is the difficulty they have recruiting new employees. Our tree care business clients, in general, have a backlog of work but are having difficulty finding enough skilled labor to meet the client’s need. As a result, most tree care companies are more likely competing for employees, (human resource assets), more than competing for work. To make recruiting even more difficult this challenge exists for most businesses. The most common sign seen today is “Now Hiring”.  

To be competitive in this tough labor market it is critical to view employees as assets. To retain and develop employees for the long term, offer to help them build a career rather than a job. When you have a team of employees that feel they are part of your business growth plan, you are building the best recruiting tool available. Set aside time to visit with each employee to discuss their career goals and help them develop a plan to achieve the goals.

The process should include identifying and developing new leaders. New leaders may be needed to replace someone retiring, a person who has been promoted, to fill a vacancy caused by turnover and or to fill a new leadership role created to expand the company. It’s a risk management strategy that increases the availability of prepared and qualified people as the business grows, adds new employees, new services and or loses a key employee. It’s also one of the best ways to retain, inspire and reward employees. Happy employees are great recruiters. 

No matter the size of your company, this activity starts at the top. Include employees in your succession planning discussions. Leadership is a learned skilled, preparing your people to lead is one of your most important duties. One of the most important skills to develop as a leader is your ability to listen. Model that skill and it will become part of your company culture.

Here are a series of steps to consider at least once a year to help you include employee development in succession planning to grow your business and human resource asset base. 

  • Identify critical positions in the company which require highly capable employees. If you are looking to expand include critical positions needed for that expansion.
  • Identify the most competent person for each specific critical position and what the consequence would be if that person were to leave, be promoted, and or become temporarily unavailable.
  • Identify people in the organization that are likely candidates to advance into those critical positions when the time comes. These transitions can be planned in the case of a promotion, or in the case of an emergency the company is prepared to minimize the impact.
  • Identify success profiles for all critical positions. If you are on top of this there should be job descriptions to review for this information. If not, that is a good first step to developing a success profile.
  • Create development plans for successors to ensure they are ready to assume future roles.
  • Develop employee development plans to address the gaps. Budget time and resources for leadership training.

Begin by getting your key players involved to help with identifying critical positions and highly capable people. At first people that haven’t been included in this type of discussion in the past may be threatened by the concept, it may appear you are getting ready to replace them. Communication needs to be handled well and if it is, you will find it is something that is welcomed. The process allows people to see benefits and opportunities that they might not have seen before, for themselves, others and the company. In time it will be a part of your culture and every employee will become a recruiter.

If you need additional help growing your human resource assets, check out ArboRisk’s Thrive Leadership Development Package! Our experts will work with your leaders one-on-one to build their leadership skills, thereby increasing team loyalty, efficiency, and profitability.

Developing Leaders Using Flashlights and Mirrors

by | Oct 11, 2021 | Employee Management | 0 comments

Developing Leaders Using Flashlights and Mirrors

Written by Kevin Martlage

As a tree care business owner, you are faced with numerous decisions and issues surrounding your organization and team on a constant basis. How you approach those things ultimately rests on the shoulders of you as the leader of your company. While we all have various levels of success and issues we are dealing with, the backbone of any organization is the team that leads and runs the business. Certainly, our customers, vendors, suppliers, and equipment are all important, but without an effective team to take care of those things you are simply another tree care company searching for that next tree to prune. 

If I were to ask you how are you intentionally developing your current and future leaders what would you say? Could you honestly answer that question or does the typical business day cause too many hurdles and time constraints to effectively develop the team around you? If you are developing your team, great!! What then specifically are you doing to ensure that your team has all the tools and resources necessary to be successful, productive, and most importantly happy? Do they know what good looks like and how they can positively impact the organization daily? Those are all questions that are important to think about as you advance your organization and team with effective and intentional leadership development. 

I work with individuals and teams daily helping them identify what is “being left on the table” in terms of their overall strategy, teamwork, operational efficiency, and productivity. While my work with those clients is extremely fulfilling, it is the ability to help individuals look internally to understand themselves and how they can continue to impact their organization that is the most rewarding as a coach. This is where the concept of ‘Flashlights and Mirrors’ becomes relevant.  

That phrase, ‘Flashlights and Mirrors’ was introduced to me by my father who has spent a vast majority of his life crafting various workshops and trainings to help people, and teams, realize their full potential. The concept is one that I use with my clients and is something that I think can be very impactful if a leader fully embraces it as they develop their team to make a positive impact on the tree care industry.  

The concept is simple. As a leader, it is your responsibility to ensure that those on your team have not only the resources and understanding necessary to complete their job responsibilities, but also your support to reach their full potential.  The ‘flashlight’ in this equation is used to help “shine the light” on those areas that are important to them. The ‘mirror’ is then used to help them look internally to understand how they are impacting the organization, the team, and their professional development on a consistent basis. Your responsibility as a coach committed to transparent communication and support, is to help facilitate those conversations with your team. 

There are a variety of ways to use the ‘flashlight’ concept with your team when it comes to their development. However, the thing that turns it on the brightest is the question, “How can I help?” Not only does this open the discussion for further discovery, but it also helps to build trust which is super important as you develop your current and future leaders. Granted the responses can vary and have a lot of different outcomes, but as a leader it is your responsibility to take their response and help shine that flashlight a little brighter so you can both uncover what it is that they desire, need, and are passionate about. 

Some suggested questions you can use to help shine that flashlight are:

  • How can I help?
  • What support can I provide to help enhance your ability to lead your team or to do your job?
  • Are there any areas of your responsibilities that you feel you could use some additional training?
  • What are your career goals within this company and outside of this company?
  • Are you happy with the responsibilities you currently have?
  • Are there areas of the business that you wish you had more interaction or responsibility for?
  • What are you passionate about within this company? 
  • What are you passionate about outside this company? 

The list can go on and on. However, as a leader committed to developing your team, it helps to understand what it is that they are passionate about, want to achieve, are having difficulty with, or need help with. Once you begin to understand those areas, you can work with them to develop an action plan around how to alleviate those issues and achieve those goals. This then becomes their developmental plan which can be used as you continue to meet with them and develop them for the next step in their career.

 

The concept of using ‘mirrors’ is a bit different, but equally important. This is where, as a leader, you help them look internally regarding their own performance within the organization. This part of the equation can be as detailed or simple as your organization allows. However, the most important thing to remember is that the ‘mirror’ only shows facts and does not reflect emotion. 

The ‘mirror’ is used to help you have those transparent and important conversations with your employees that provide specific details regarding their performance and interactions as a member of the team. It is also meant to help you provide them with some invaluable insight into how they interact with others, support others, and impact the team and organization. 

To build your mirror you must first determine what “good” looks like for that individual and your organization. When we say “good” this includes developing and providing specifics about the culture of your organization, metrics you would like them to achieve, acceptable interactions and communication with others, and most importantly their ability to understand what is expected of them on a daily, weekly, monthly, and annual basis. Once developed and agreed to, this then becomes the ‘mirror’ that you consistently use to help them look at those things. By consistently, transparently, and intentionally providing them feedback regarding their performance in those areas, you are helping them to “look in the mirror” to remind themselves of what good looks like and how they are positively and negatively impacting those things. This will help continue to develop them personally as they work to achieve those goals and continue to positively impact the organization by looking inward first. 

The concept of “flashlights and mirrors” is simply a guide to how you can provide invaluable insight and development opportunities for your staff. The key to any of this is that you must be consistent with your development conversations while you build a trusting and effective business relationship with your team. If you would like to learn more about intentional leadership development, I would encourage you to look at the THRIVE program, and specifically the Leadership Development Package, for more details. 

4 Tips to Create a Culture of Safety

by | Sep 3, 2021 | Safety | 0 comments

4 Tips to Create a Culture of Safety

Written by Mick Kelly

At ArboRisk, we often hear people say they want to build a better safety culture, but many times they don’t know how to do that. Because we all know a great safety culture doesn’t just look at the health and wellbeing of your employees – it also incorporates equipment maintenance, public safety both on the jobsite and on the road, and your brand reputation, you must be strategic in establishing the safety culture that you want within your organization. 

By creating a strong safety culture, you are developing an ethos for your company and giving your employees an idea of how things are done in your business. Your goal should be to ingrain in the collective memory of your team, through repetition, routine and diligence, the importance of making sure every employee gets home safe each night. 

Here are my 4 tips to create a stronger culture of safety within your business! 

Communication

The key to any culture is communication. If you don’t have a clear, defined idea of what your safety culture is, then this will trickle down to every aspect of your business. It is imperative that the message from leadership is crystal clear, that you are more interested in everyone’s safety than saving a half hour of work. Because of that, you expect your team to follow the guidelines and not to cut corners. It’s a message that has to be repeated every day until it becomes the mantra of the company. 

 

Training/Employee Development

Training is one of the largest key aspects for increasing safety awareness within an organization, and by the way is also a great way of retaining employees. Laying out a clear development path(s) within your organization and encouraging employees to obtain industry certification or designations will help grow your safety culture because they will be able to visualize how their role impacts every other person at your company. The more decorated your team becomes and the prouder they are of their work, the more that your safety culture will thrive.

 

Preparing for Safety

Failing to prepare is preparing to fail. Nothing could be more true about safety. A strong safety culture is created intentionally by being prepared. That means proactive thinking must occur to set up topics for safety meetings in advance, investigating what new equipment or technology is available to help your team operate safer (think wireless communication headsets for your helmets) and installing a telematics system into your vehicles. All of those items are done in advance of an injury and accident. To begin preparing for safety, simply take a half hour to sit down and think about potential hazards that your team faces each day and create a simple action plan on how to minimize each of those hazards. Use your “toolbox” meetings to cover one topic a day.  

 

Written Procedures

Writing anything down makes it more official. Being able to provide an employee with written guidelines will solidify the seriousness of your intent. Written procedures give directions for handling difficult or stressful situations like reporting procedures for an injury or accident. Explaining the long term benefits of these written procedures to employees will take away the stigma of the extra work they may perceive comes with it.  

 

Other tips and hints

  • Take the time to look over your past mistakes – look at your written reports and see if there is a pattern that is leading to broken equipment, accidents in vehicles, accidents on jobs, etc. 
  • Having a “Safety Guru” onstaff is a great way to manage the safety culture. Often you’ll find an employee that is passionate about theirs and others safety and they can be the advocate you need within your organization.

 

Here at ArboRisk, one of our core mission values is to help each of our clients make sure their team gets home safely each and every night. Helping our clients create a safety culture within their company, whether it’s a one-man operation or they have numerous employees, is imperative to achieving that mission. A great safety culture will also help grow your business by attracting the right employees and in the long term will help to keep your insurance costs down. 

Taking the time to develop and implement a comprehensive safety program is the first step, but living and breathing safety within your company is really where you’ll see the results. Because developing a safety program takes time, ArboRisk partners with tree care companies to create personalized programs in a fraction of the time. For more information, check out our Safety Package and contact us today!