Steven Bach [00:00:00]:
We're gonna force you and kind of slap you with a little bit of reality in October, before the next year even starts.
Jack Jostes [00:00:09]:
What are you seeing that works for building those relationships with subcontractors? It might be hard to initiate that relationship. What are you advising people do to build that book of relationships?
Steven Bach [00:00:21]:
The reality is you gotta actually care. You have to put some effort in, and you have to be consistent.
00:29 - Who is BBP? Meet Steven Bach & His Industry Insights
Jack Jostes [00:00:29]:
Hey, everyone. Welcome back to the Landscaper's Guide. Today I'm excited to interview Steven Bach, an implementation consultant at Bach Business Partners, also called BBP. And Steven is going to share some things, going to help you get your financials dialed in. So that way, when you're looking at your books in December of this year, you've done something really well that helps you ultimately make more profit. So, Steven, what else should we know about you?
Steven Bach [00:00:57]:
Well, a little bit about myself. I'm a green industry consultant through and through. We started Bach Business Partners back in 2015. Prior to that, I was with another green industry firm for about 10 years. So the green industry is our passion. We've been at it in all different aspects, from actually being technicians when we were in college to working our way up to management positions, to finally applying the business side. What we actually learned in college to where we are today, where we've taken what we know about the green industry and have been able to partner that with the financials. And I think it's really given us a very unique perspective on how to explain financials to green industry professionals.
Steven Bach [00:01:49]:
Sometimes there's a little bit of a stigma that the green industry guys aren't as sophisticated as they need to be on their financials, and we've really set out to try to reverse that trend, if you will.
Jack Jostes [00:02:02]:
I love it.
02:04 - Deer Camp Stories: Hunting, Family, and Business Lessons
Jack Jostes [00:02:04]:
And, hey, how. So how was Deer Camp this year? Before we get into the financial stuff.
Steven Bach [00:02:07]:
Well, I don't want. I don't want to get too excited, but we just wrapped up Deer Camp, or deer season, we call it, here in Pennsylvania, and out of our seven members in camp, six of us got bucks. Was our best year ever. And, yeah, it's been. Been a really good season. Now. We can kind of transition into duck season now, but it's been a. Been a good deer season.
Jack Jostes [00:02:29]:
Oh, that's fantastic. Congrats on all the bucks.
Steven Bach [00:02:32]:
Yeah.
Jack Jostes [00:02:32]:
Thank you. Is. Is duck season out? You guys are out in Pennsylvania, right? So do you hunt ducks there or where do you go?
Steven Bach [00:02:40]:
Just like, I. I like to travel, and we've traveled to North Dakota, Virginia, to some of the better hunting but as know most hunters hunt because of the family and relationships that you form. My family and my relationships are all here in Pennsylvania. So we do the majority of our duck hunting here in Pennsylvania, which isn't very good for the hunting, but makes for some really great memories with my family and friends. And that's what I'm looking forward to the most.
Jack Jostes [00:03:11]:
That's, that's awesome. Well, I mean, you've definitely got freezers full of meat with six bucks there, so.
Steven Bach [00:03:17]:
Right.
Jack Jostes [00:03:17]:
If you can get a couple ducks, that would be icing on the cake. Well, well, great.
03:22 - Setting Financial Goals: What Every Landscaping Company Needs to Know
Jack Jostes [00:03:22]:
So, Steven, so we set out to plan three steps to set up a 12 month financial plan in January. What's, what's the first step?
Steven Bach [00:03:33]:
Well, I think let's back that up a second. Before we say like, what do we have to do to set up a financial plan? One of the first questions I would ask people is what's your financial objectives? What are you hoping that plan is going to tell you? Our experience is typically people are very good at keeping their actuals. This is what we've done last month. This is what we've done historically. But when it comes to forecasting out what they're going to do and predict what they're going to do, they have a really hard time with that. And so I guess it would start with what are they trying to accomplish financially before we start to narrow in on the metrics that will help them build that financial plan, if that makes sense.
Jack Jostes [00:04:24]:
Well, yeah, it does. And I think sometimes it's helpful to hear what are examples of goals. Right. So sometimes people will come to you and say, what are your goals? And sometimes you're like, well, I don't know, I want to make more profit or I want to, I think I need to hire another crew. But I'm not sure if I have the cash flow to do it or things like that. So what are some examples of goals that landscape companies, especially north of maybe one and a half million up to 10 million as they're growing. What are some of the goals that they, they might consider having?
Steven Bach [00:04:57]:
Great question. So I think a lot of people think it's some sophisticated process of how they're going to come up with their goals. And sometimes it's as simple as sitting down in a strategy session with the ownership team and saying, what are you trying to accomplish? And things that are popular that we hear are, well, I want to hire a few more key people. I want to get into a new territory. I don't care about growth. I need short term cash because I have a lot of debt that I need to pay or equipment that I want to pay off. Others say I don't care about the short term cash flow. I want the long term equity and the long term growth.
Steven Bach [00:05:42]:
I'm trying to build something different. So based on what their goals are, then we can start narrowing down what they need to do. But it really starts with what their financial goals and objectives are and they can be as formal or informal. Sometimes owners just say, man, I just want to be able to comfortably make payroll, comfortably pay all of my notes and loans that I have and that's it. Others say, man, I need to grow by 20% or I want to get to the next town over. So it's really dependent on what the ownership team is trying to accomplish.
Jack Jostes [00:06:23]:
Well, I'm curious, I'm thinking of Dave Ramsey and I have, I like a lot of his content. Not all of it fits with what I want to do, but he has, you know, his seven baby steps. I'm curious is, are there, are there steps that people should consider before they, you know, before I get to hiring key people? I would think I would want to get my short term cash under wraps. Or I'm just curious if you, if you have a hierarchy or an order that you would generally advise landscape companies to follow.
Steven Bach [00:07:00]:
Yeah. So typically in our world, growth is harder to get than fixing profitability. So making sure that they're not getting wide eyed on their goals. Where I'm, I want to be a $20 million company, but they don't have a systematic way to get there. They just want to be a $20 million company. So some of the very first things that we look at is their sales plans and almost more important than their sales plans. And this is a concept that not a lot of people understand. Those who say, well, I want to sell this much, I'm going to sell this much work.
Steven Bach [00:07:39]:
The bigger question that we help them answer is when will those sales turn to revenue? What I mean by that is we could make the sale right now, but how much revenue will we actually recognize in 2025? Especially when you're talking maintenance. Maintenance. Typically we coach that they pay the same amount all 12 months out of the year. Right there they're going to pay the same amount to us in a contract. Well, if we sell that contract in July versus January, there's a significant difference in the amount of revenue the company can realize. And I think people really have a hard time calculating when they're going to make the sale and when they're going to realize the revenue in the project world. We might make the sale in 2024, but we might not do the work and recognize the revenue until 2025. And I think the bigger the companies, the more dynamic they get, the harder that is to calculate.
Steven Bach [00:08:48]:
When you're a small, 5, $600,000 company, pretty much you're selling it and doing it the same month as you start to get 3, 4, 5 million, 10 million plus. That's not the case. And making sure people understand how to convert their sales into revenue is an area that we constantly get a lot of questions on and kind of toot our own horn. Probably one of the areas that we excel at in teaching our clients.
09:18 - The Truth About Revenue & Sales: Why Most Companies Get It Wrong
Jack Jostes [00:09:18]:
Well great. So, Steven, this is, this is the first thing we said we were going to talk about in the three steps after we get our goals clear is a revenue to sales conversion. So what's, what's maybe one thing that people could take away on that revenue to sales conversion that maybe is a common problem that you meet with people and you're. And the light bulb goes off and they're like, oh, I had never thought of it this way.
Steven Bach [00:09:41]:
So especially going back to the recurring revenue and the maintenance sales, again, our clients sell all inclusive contracts where they pay the same amount every month. One of the light bulbs that really goes off on people is if you sell. Just for math sake, bear with me here. I'm a Penn State guy. So we're going to use Penn State math. If we sell a $12,000 contract, if we sell it in January and we bill them out $1,000 a month starting in January, we've hit our sales goal of $12,000 and we've built out all $12,000. But in that same example, if we make that sale in July, we still have the same $12,000 sale. Penn State math.
Steven Bach [00:10:31]:
Stay with me. But we only bill it out July, August, September, October, November, December, Penn State math. Six months times $1,000 a month. We've only billed out, our revenue is only $6,000. And a lot of owners or general managers will incorrectly count that as $12,000. They'll say whatever their sales are, that's what our revenue is going to be. And I think understanding that difference of the timing of sales, of the difference of making it in January versus July is a really pivotal point in understanding the revenue to sales conversion.
Jack Jostes [00:11:14]:
So let me see if I'm, if I'm doing this, I'm just curious what your thought is. The way I'm handling this in my own company is I would create 12 invoices in QuickBooks. Let's go with the, the July example. In, in July. And I'd create all of them. I would set the due date though, to the month that they're going to be paid. And then in that month I would be able to, to look at that as a accrual sale of $12,000. But then I would run a, a cash report that would show when it's actually paid.
Steven Bach [00:11:51]:
That, that's, that's on track. Right, Very on track, actually. Again, you can have the sales, but if you're billing terms, you're not billing that whole maintenance contract the same month you sell it, you got it trickles in over the 12 months. And that's where I think we do a really strong job of making sure people understand that and, and the timing on it, if that makes sense. It.
Jack Jostes [00:12:20]:
It does, because then I'm able to run a accounts receivable. That's how I'm then able to do cash flow projections at my own company. And I've. The mistake I've seen some landscape companies make is they'll, they don't create those invoices until the month that they're due. And then they're not able to forecast the, the accounts receivable into the future, even though they've already sold it and they have a contract. Is that what you're seeing with your clients?
Steven Bach [00:12:51]:
Bingo. Right, Exactly. So they, they see a $12,000 sale, but in this calendar year, they might not see all $12,000 of it. Right. Because it's going to trickle into the next year. And I think that's where a lot of financial general managers, that's where the light bulbs go off is they're saying, man, I wonder why we're always a little short. We're always chasing revenue. Just, we just, we've made the sales, but we don't have the revenue or we don't have the cash yet.
Steven Bach [00:13:27]:
That has not almost everything to do with it. Where they said, yeah, we made the sales, but you didn't realize the revenue yet. And I think understanding that is extremely important because you can be celebrating doing backflips saying, we got a $12,000 sale, but you don't have the money to, to, to deal with yet.
13:50 - The Right Software for Landscaping: Are You Using the Best Tools?
Jack Jostes [00:13:50]:
Right. Yeah, I had that problem and I had a lot of debt during that period until I learned this. So I'm curious. You know, one challenge I'm seeing is that landscape companies are using various landscape business softwares, whether it's LMN or Aspire or service autopilot or jobber or wherever. And they're, they're sometimes doing their invoicing through there. And then they have a bookkeeper who after the fact, at the end of the month, reconciles their QuickBooks. But they don't even have it dialed in to invoices by customer or by class or things like that. I'm curious, how do you coach people through that? What, what is the, what do you recommend for people from an in? Because this, to me sounds largely.
Jack Jostes [00:14:40]:
Sounds like getting your invoices dialed in and having the correct dates that they're due. That's where my mind is at. Is that how you approach this?
Steven Bach [00:14:49]:
Kind of. See all of the above, if I would. Right. So the financial plan and we have some proprietary financial planning software that we, you know, recommend our people use, but the financial plan, the managers use, the CRM systems that you spoke about, what they respectfully lack is the planning ability to look into the future. So the financial plan is what the executive and management team is setting their goals for the year. Their CRM system is tracking along the way to make sure that we're going to hit those goals. QuickBooks is the accounting authority. Right.
Steven Bach [00:15:41]:
That's the checks and balances to make sure that what we're seeing in our CRM systems is accurate. The challenge with QuickBooks is it doesn't allow you to set a financial plan that's based in reality. What I mean by that is you can pull revenue numbers and costs for vehicles and equipment and just type them in. The software that we use requires a lot more thought and effort to put into it and everything has to be tied back. Right. You can't just say, well, we're going to do $10 million and we'll figure it all out. It'll say, well, Jack's going to sell X, Steve's going to sell Y. We have X under contract.
Steven Bach [00:16:32]:
Right. There's specifics attached to everything. Whereas if you write it in some other systems, you could just kind of, what they call in the IT world, hand jam any numbers that you want into them.
Jack Jostes [00:16:46]:
Great. Well, well, thanks for, for sharing that. So revenue getting clear on your revenue to sales conversions and having the appropriate software, the right tool for the job is essential to being able to doing this, this type of financial forecasting and planning. So I don't know that we can go too much farther into that right now because I wanted to get to our, our second point, which was number of work days. So tell me about this.
17:14 - How to Price Your Equipment Correctly (Most Get This Wrong!)
Steven Bach [00:17:14]:
Yeah. So kind of moving off from the Revenue over to the cost side. And this is something, whether you're using financial planning software or not, this is one of the things that the financial plan will give you is how do you charge appropriately for a piece of equipment? Very popular in our, in our group, in our industry. Jack, I'm sure you get that question all, how much you charge for a skid steer, how much is charged for Mini X? Right. And it's just so subjective. I'm sure you. I can't even begin to answer that. So one of the ways though, that I can begin to answer that is it starts with the number of days that that piece of equipment is going to work.
Steven Bach [00:18:01]:
And again, we're going to use some Penn State math, but you're going to take your total cost of ownership in a given year, all of your expenses associated with that piece of equipment, your depreciation, your fuel, your repairs, etc. All the costs that are associated with it, you're going to add them all up and you're going to divide that by the number of work days that that piece of equipment is going to work. That's going to give you your daily rate. You can then break that down into an hourly rate if you'd like. But what happens there is. That sounds like an easy, easy calculation. Take the total cost for the year divided by number of work days. But what happens, Jack, is they have like specialty pieces of equipment.
Steven Bach [00:18:52]:
Well, this big excavator only works 10 days a year. When you really look at it, and they look at it and say, I can't charge that for one day, right? Like I can't. I'm pricing myself out of the market. So what they'll do is they'll kind of lie to themselves and say, you know what, instead of 10 days, that thing's going to work 30 days next year. And they divide it by 30 and they say that number feels pretty good. The market can bear that. But what they're doing, they're cutting their feet off, right? Is they're lying to themselves about their expenses and what those costs are going to be. And then come the end of the year, they're sitting there saying, man, why aren't we making money? And all the whole year they were undercharging for that excavator.
Steven Bach [00:19:40]:
Instead of charging what they needed to be, they were. They lied to themselves about the work days and watered it down. So I don't know if that's kind of jiving or making sense, but a lot of people just don't track their work days and that's one of the biggest things I can tell you is after you listen to this, start keeping track of every day that a piece of equipment works. Come December, you'll never be in this position ever again. But knowing your work days, so that you're not calling Jack, calling Steve, saying how many work days does a typical skid steer have? That's a very specific number to every company out there.
Jack Jostes [00:20:23]:
Just so I'm clear, is it number of workdays for the actual piece of equipment or is it number of workdays for the company, even for projects excluding the piece of equipment?
Steven Bach [00:20:36]:
Great question. So for specialty pieces of equipment, it's number of work days. How many days is that Mini X or that skid steer going to work? For the trucks and the trailers, that's number of work days for the whole company. Right, because that's going to go out every single day. Excuse me. The number of work days for the trucks is typically the same for every truck, every vehicle in the company. It's the specialty pieces of equipment that people have a really hard time tracking how many times a year they actually use that mulch blower. It's not the 180 that they're using the other trucks for.
Jack Jostes [00:21:19]:
So the, so then when I'm pricing a landscape construction project that's going to have the excavator that is used 14 times, 14 days this year, am I factoring it in? So only those. I guess so. The cost of that equipment isn't factored into my overall overhead? it's only factored in to the cost per job?
Steven Bach [00:21:47]:
That's correct. That's correct. So our philosophy on the, on the financials is we don't want to be charging when, when people put those specialty pieces of equipment into just general overhead, what ends up happening is they're charging people, they're like mo only customers are getting price sensitive because they're paying for skid steers, Mini X's. So we take the approach of pricing those specialty pieces of equipment individually into the job when the job calls for.
Jack Jostes [00:22:24]:
That's different from the way a lot of landscape companies are doing it. That, as far as I know, is that what you see when people come and start working with you, that they're currently factoring into overhead?
Steven Bach [00:22:34]:
Yes. I hope I don't come across insulting as I say this in, in our world, when people lump all their vehicles and equipment into overhead and just come up with a, a rate for everything, that's, that can, that can kind of give off a rather lazy approach to financial planning where I don't know how to charge everybody appropriately for the equipment that they're going to use on the property. So everybody pays for everything. And that might not seem like that big of a deal, but when you start getting into the 10, 15, $20 million revenue marks and a maintenance agreement might have 5, 6000 hours on it in a given year, if you're off by three, four dollars an hour, you've. You're pricing yourself out of those large maintenance deals. And that's where we see it is when people put their vehicles and equipment into their overhead that their overhead rate gets so high that it gets difficult to sell.
Jack Jostes [00:23:38]:
Right now I'm thinking about my snow people and what about all of the heavy machinery they have to buy? And what about for the landscape construction companies that have the specialty equipment and they don't use it in a year, though. So if I don't like, part of me is like, oh, I see what you're saying, because I'm going to overprice my maintenance. And then the other part of my brain is thinking, well, if I don't and I don't sell enough of the landscape construction projects, I'm still going to have the payments that I need to make on the, the heavy machinery and I'm going to lose. I'm not going to cover my shirt.
Steven Bach [00:24:17]:
Bingo. So what we're going to. And this is like the, the crux of the financial plan is our belief is most people are in that position. They just don't want to admit it or aren't looking at it yet. What we're going to do is we're going to force you and kind of slap you with a little bit of reality. In October, before the next year even starts, we're saying, hey, are you going to be able to do this? Can the market actually bear this? Do you have too much equipment? Do you need to look at renting? I know it's nice to have a whole separate snow fleet over there, but you're going to have to look at maybe using that snow fleet to do summer services. I know it's great to have everything separate, right? But that's what the financial plan will give them that information ahead of time to be able to make those decisions. They might have too much equipment, they might not have enough equipment.
Steven Bach [00:25:16]:
But very fair questions. And that's what starts to get flushed out, is I don't have enough work days. If I just work it for winter, I have to work it in construction in the summer or the numbers don't make sense.
Jack Jostes [00:25:33]:
Fascinating. To recap on this one, it was knowing your number of work days and dividing the total costs for the equipment divided by the number of work days. And for general equipment that's used most of the time, like trucks and trailers, it's total work days of the company. And for specialty equipment, it's only for the days that that specialty equipment is used.
Steven Bach [00:26:01]:
That's correct.
Jack Jostes [00:26:02]:
That's awesome.
Steven Bach [00:26:03]:
Number one thing we see is they'll try to apply those bulk work days to the specialty equipment to try to get their estimated, you know, their sales numbers down, which will have a really detrimental long term effect on the business. Cool.
26:20 - Overtime: Are You Losing Money Without Realizing It?
Jack Jostes [00:26:20]:
Well, hopefully people are not driving while they try and calculate that one. That, that's one that I would want to go home to my office and like spend some time looking at that. So that, to me, that's a good takeaway. Steven. Okay, the third, the third and final one was overtime percentage. Talk to me about that.
Steven Bach [00:26:38]:
Yes. So very similar to vehicle and equipment. What we're trying to do here is charge accurately. You're probably starting to sense that what we want to do is charge accurately. Not the simplest way, the most accurate way. Right. So when we talk about overtime, one of the things that the financial plan will do is how much do we have to charge per hour? Very similar to how much do I charge for the skid steer? I get the questions all the time. What, how much your clients charge them for just an hour of labor? What's their hourly labor rate? What's how much they charge for just a guy, a guy in a truck? Or whatever.
Steven Bach [00:27:19]:
So what that comes down to is a lot of things, but one of the biggest factors is the overtime percentage. So, so the financial plan is going to make you say, how many hours is Jack going to work, is Steve going to work? And in what particular months are they going to work? You know, you see that curve when the green season picks up. But it's going to say not only how many hours are you going to work, how many of them are going to be overtime. And the overtime is going to obviously factor time and a half in as a reminder for everybody. So when we start saying we're going to run 10, 15% overtime, owners will look at that and say, wow, when we run 10 or 15% overtime, our average rate is too high. The market won't bear that. Similar to what we were just saying with V and E. So they say, you know what, we're not going to run overtime next year.
Steven Bach [00:28:21]:
We're just going to keep it to 2, 3% just in the peak in the spring. They kind of lie to themselves, you know, well, we just will control overtime. So they then get themselves a lower rate that they can charge. So they, they convince themselves that we're not going to work this overtime, and they start charging people appropriately. But what happens is the guys and girls in the field have historically always worked this amount of overtime, and they work a good amount of overtime. And what happens is the sales team and everybody's going out selling jobs at a very low labor rate. But the reality is that's not going to happen and we have overtime. So my kind of rant, if you will, on the overtime is be accurate with how much overtime you're going to run.
Steven Bach [00:29:19]:
Don't try to get your hourly rate low by lying to yourself about overtime. But also don't lie to yourself and just say, we'll just put 20% overtime so we're covered. That can have the opposite effect too, where we're not going to get the deals because we've just been sloppy on our overtime and just said we're going to overcharge for it.
29:43 - Landscaping Industry Trends: Why 2024 Was a Tough Year for Many
Jack Jostes [00:29:43]:
Well, Steven, so this makes sense. I'm curious, though, over. So we're actually recording this in December, going to come out in January, but it's December 2024. What have the last four years been like for your customers because or for your clients? Because for a lot of my clients and my, my contacts in the green industry, 2020, 2021 was like so much demand and overtime was off, off the charts. Many people then overstaffed, and then Demand decreased in 2023 and 2024, and some of them were even overstaffed. Is that what you saw with your clients?
Steven Bach [00:30:22]:
For the most part, very, very, very, very similar. Right. 24. Everybody had the infrastructure. Everybody was built up, ready to go. Revenue numbers are pretty flat this year. 24 hasn't been the best year. One of the things, I think that the financial plan gives the Bach Business Partners clients, gives them an ability to be more adaptive on that.
Steven Bach [00:30:50]:
So we don't have to wait until December to say, man, we had too much labor running this year, or we ran too much overtime. You're able to see those trends coming. We're short on revenue. We need to cut some labor or we're outpacing revenue. We need to add some labor. And if people aren't looking at their financials on a monthly basis and saying, how did we do? They can't make those adjustments midstream, they can't add some more Staff. And I'll tell you like a real world example. One company was just running so much overtime, I mean like 20, 25% overtime.
Steven Bach [00:31:32]:
Well, they were outpacing their sales plan and instead of hiring more people, they just started running overtime. Overtime, Overtime. Well, it erased all the progress. All of the additional revenue that they had seen in the growth was undone because they were just out of control in the overtime when if they had been with us, they would have caught that right away and said, man, we can hire four more people. Not eliminate, but minimize the overtime and get the work done. So that's something that is really trying to understand whether you're going to use internal labor with overtime or whether you're going to subcontract it out. That's what a lot of our clients seem to be doing right now. You mentioned not being able to find some labor in.
32:25 - Smart Scaling: How Landscaping Companies Are Using Subcontractors
Steven Bach [00:32:25]:
Sometimes a lot of our guys will lever up and lever down with the utilization of subcontractors. Subcontractors take just as much management as full time staff, but it allows the ability to kind of lever up or lever down depending on how we're doing on our revenue plans.
Jack Jostes [00:32:46]:
Are you seeing that even with landscape maintenance? The use of subs?
Steven Bach [00:32:52]:
We are, we are. And really we found that that came really out of necessity over the past few years. There was just so much demand. The H2B program is, you know, volatile as it always is, where people were like, we've sold all this work, we are obligated to do this. What other options do we have? And that's when they started reaching out to subcontractors to sub maintenance out. And it works very successfully within our group.
Jack Jostes [00:33:27]:
So are they subbing out to other landscape companies that just have less sales?
Steven Bach [00:33:32]:
Yep. So Bach business partners groups, we're in the 2 to 20 million dollar range. They try to find subcontractors that are a little smaller, that maybe don't have the infrastructure. They might not have a sales staff, they might not have a real good management staff, excellent at their trade, excellent at producing the work, but maybe don't have all of the administrative resources that we might have. So really the partnership, it's a two way street where hey, you can get us on these properties that we would never even be able to get the door open for us. And it works very well.
34:15 - Building Strong Subcontractor Relationships: What Actually Works
Jack Jostes [00:34:15]:
What are you seeing that works for building those relationships with subcontractors? Because let's pretend it's June, it might be hard to initiate that relationship. What are you advising people do to build that book of relationships? So they can tap those people as resources when they need them.
Steven Bach [00:34:37]:
I could give you a really corporate answer and lead you through our like five step program. But the reality is you got to actually care. You have to put some effort in and you have to be consistent. You know, I think the subcontractors has like a negative connotation where it's like, hey, here's a contract, good luck. The successful programs, they're meeting with them very regularly, bi weekly, going over feedback, giving them feedback, going over how they want their tracking, how they don't want their tracking. They're being very consistent. They have, you know, the people, they're six months out in front of it and I think it's just really caring about their success and not treating them like a subcontractor. They still have to have regular meetings with their managers to get feedback on their performance, feedback on what the customer's seeing.
Steven Bach [00:35:38]:
Some managers would say subcontractors almost take more management than full time employees. So yeah, I guess that's the long way of saying you gotta really care about them.
Jack Jostes [00:35:50]:
So which role in. Let's pretend you have a $10 million company, they do maintenance and construction. What role in that 10 million dollar company would be managing these relationships with subcontractors?
Steven Bach [00:36:05]:
Great question. So short answer would be everybody in the company is always looking to form relationships, but that's a little misleading. Specifically the project managers. They meet with anybody on the construction side because they have to be comfortable with them if they're going to be working with them. It doesn't matter if Steve and Jack have a good relationship and work well with them. It matters for the individual project managers on the maintenance recurring side. In our world, that's the account managers, they manage the accounts and the employees and the financial side there. So they have to form the relationships with the people that they're comfortable with.
Steven Bach [00:36:45]:
Typically the company will have some blanket rules that you got to have some insurance and you got to be established and stuff like that. But short of that, they let the individual account managers and project managers make those decisions.
36:59 - Planning for 2025: How to Accurately Predict Overtime & Labor Costs
Jack Jostes [00:36:59]:
So, so back to, back to the, the, the big topic here of setting up stuff in January this month. I think what I was trying to ask is how do I know what my overtime percentage is going to be? Because isn't it largely based on what I sell and what we're going to perform? And I may not know what that is. And that was why I was asking, because in 2024, I'm sorry, 2020, it was like boom, peak time, a lot of people were understaffed and then they overstaffed. 2024 was a lower or a flat year. How do I, how do we, how do we plan for this for 2025?
Steven Bach [00:37:37]:
As much as we think the last few years have been anomalies and there's been some ups and downs, there's still, we still have historic and benchmark labor percentages. So that's why when we started with the revenue side of things, when you can understand your revenue, the rest falls into place. If the ownership and leadership is confident in how they've come up with the top line revenue, we can reverse into and make sure that the labor percentages make sense. So it's kind of a long way of saying that labor percentage is going to fall in line. I'll even give you guys a little bit of a freebie. On the project side, typically that's about 16% give or take. On the maintenance side, that's about 20% give or take. So 20% of your revenue should be your labor cost in the maintenance world and about 16% in the project world.
Jack Jostes [00:38:48]:
Well, thank you. So tell me more. We've got to wrap up. These were definitely three things. Revenue to sales, conversions. Again, tying it back to this third one. Number of work days and overtime percentage. Steven, thanks for coming on the show and sharing these things.
39:04 - What Does BBP Do? How They Help Landscaping Businesses Grow
Jack Jostes [00:39:04]:
Tell us a little bit more about Bach Business Partners. What do you guys do and how can we, how can we collaborate with you?
Steven Bach [00:39:10]:
Thanks for the question. I probably should have started with that too. By the way, Jack. Sorry. At Bach Business Partners, we partner with 2 to 20 million dollars landscape companies exclusively. So we don't get into anything else. We have about 20 customers nationwide right now, so. And we help them from the financials to management and sales.
Steven Bach [00:39:37]:
We don't get involved operationally on here's how to cut grass better. Here's how to build the wall better. We will help them estimate it and track it better and charge appropriately. But we're not the, the industry consultants there that get involved on the technical side.
Jack Jostes [00:39:55]:
So if people are interested in, in contacting you, how do we get started and what's it look like?
Steven Bach [00:40:01]:
Yeah, the best way is to reach out onto our website. So there's myself and four other coaches. If you go on to Bachbusinesspartners.com, fill out the contact us form, myself or one of the other coaches will get in touch with you within 24 hours and really schedule a fact finding call with you. A little about Bach Business Partners. We partner with those organizations for a Minimum of four years. And we do that because it takes a while for us to teach the financials. From the top owner all the way down to every manager will understand everything there is to know about the financials for their respective department. All the stuff that we touched on today that was a little all over the place.
Steven Bach [00:40:55]:
That's what every person in your organization will be able to talk about backwards and forwards. And that's really what Bach Business Partners does, is teaches green industry professionals the financial and management side of the business. Cool.
Jack Jostes [00:41:13]:
I like that. And I, I like that you have a four year partnership because I could see it definitely taking a long time to learn this and then also as you grow and add new people and all these things. So that's incredible. And one of the, one of the things that you guys have is exclusive events, meaning they're, they're only for your members. And I'm really looking forward to speaking at your BBP Leadership and Sales Conference. It's in Savannah, Georgia in February. We have some mutual clients between Ramblin Jackson and BBP. I'm going to meet some of them in person for the first time.
41:53 - Meet Jack at the BBP Leadership & Sales Conference in Savannah!
Jack Jostes [00:41:53]:
So thanks for inviting me to come and speak at that event. So for people who are curious, like what is that event? You know, some people might be listening and thinking, well, maybe I'm interested in BBP. What, what's going to, what are your events like and why, why are they not open to the public?
Steven Bach [00:42:09]:
Yeah, great question. So the events that we put on is we sense a four year relationship with Bach Business Partners. One of the benefits of joining the group is you get to come to all of those trainings and at those trainings we're going over very specific topics, whether it's sales, marketing, tracking, whatever. It kind of change year to year as we do them. For those of you listening in that are in the green industry, there's not a lot of professional training for our industries. There's a ton on how to build walls better. There's a lot of technical training. But when you talk about personal development for your management staff and what you're doing to work with them on customer service and financials, there's not a lot of it out there.
Steven Bach [00:43:02]:
And we're able to get everybody together about four times a year to do that training specifically, it's one of the big gaps in our industry is there's not a lot of professional training out there.
Jack Jostes [00:43:16]:
Well, I can't wait. And so for folks listening, I'm going to put a link to your website. It's Bachbusinesspartners.com. Thanks so much for coming on the show.
Steven Bach [00:43:23]:
Jack, appreciate it. I'll see you in Savannah. Thank you.
Jack Jostes [00:43:27]:
Looking forward to it.
Steven Bach [00:43:28]:
Yep, bye now.
Jack Jostes [00:43:32]:
Well, that was a fascinating conversation with Steven Bach. Make sure you check out their website. Get in touch with them. And I'm super excited to speak at the Sales and Leadership Event in Savannah, Georgia. I've never been there. It's going to be a cool place to go. And hey, we've got a whole bunch of other great events coming up. This one's closed for BBP clients only, but you can learn more about it and our other events at landscapersguide.com/events so see our show notes I'd love to see you at one of our upcoming webinars, trade shows or live events.
Jack Jostes [00:44:07]:
And by the way, if you have a business coach or you're in an association or your paver supplier is having a conference and you're looking for a speaker, keep me in mind and see where else I'm speaking at landscapersguide.com/events. My name is Jack Jostes and thanks for listening to The Landscaper’s Guide Podcast. I look forward to talking with you in the next episode.
Show Notes:
Watch the full episode + see the transcript at: landscapersguide.com/podcast
Tell us where to send your beef jerky: landscapersguide.com/toolbox
???? Catch Jack at upcoming industry events: landscapersguide.com/events
???? Learn more about Bach Business Partners: www.linkedin.com/in/steven-bach-7a20554
???? Connect with Steven Bach on LinkedIn: www.bachbusinesspartners.com