Spring is in full swing, and as your landscaping company income increases, so do your expenses. Check out today's conversation with two landscape industry bookkeeping experts with over 300 clients to learn from them about how to prepare a cash flow forecast now so you know exactly how much to save for this winter. And what should you do with your bookkeeping if you're looking to sell your business someday? What do potential buyers want to see that'll make your business look more desirable? And how and when to hire administrative staff. And how to avoid a costly mistake that most companies make when they're hiring those internal positions. And what percentage of your target revenue does this CPA firm recommend that you invest in marketing?
Carla Policastro [00:00:47]:
It's about the net cash flow. So of the business.
Joe Policastro [00:00:51]:
As an industry, we should shoot for a higher mark. It's important to understand that that's your net cash flow. Right.
Carla Policastro [00:00:56]:
The goal of any business should be to increase that cash flow. You don't want to start the year at 20,000 and end it with 20,000 or the period.
01:05 - Meet Joe and Carla Policastro from Cycle CPA: Experts in Landscaping Industry Accounting
Jack Jostes [00:01:05]:
Hey, everyone. Today I'm excited to interview Joe and Carla Policastro from Cycle CPA. Cycle CPA is a full service firm that offers bookkeeping, controller, and CFO services for the green industry. And today we're going to talk about steps landscape companies can take this spring and summer to prepare for wintertime, build up cash reserves, and increase your profitability. Joe and Carla, thanks for coming on the show today. Tell the audience a little bit more about yourselves. What should we know?
Carla Policastro [00:01:38]:
I started off my career at a local accounting firm where we didn't really specialize in any industry, but because of the demographics of where we were, we had a lot of landscaping clients. And so that's really where I got to know a lot of the recurring issues that they faced, like estimating and job costing, and that's where I became passionate about helping them in those areas.
Jack Jostes [00:02:02]:
That's awesome. And how did you two meet?
Joe Policastro [00:02:06]:
So actually. Yeah, it was on the dance floor, actually.
Jack Jostes [00:02:12]:
And was it in New York or is that. That's where you guys live, right?
Joe Policastro [00:02:16]:
Yeah. So we're. We're based right in Long Island, New York. And our team is actually scattered throughout the country.
Jack Jostes [00:02:22]:
That's excellent. Well, thanks for sharing that you're nine months pregnant. I think you're. I'm excited for you guys. And. And also, I think you may be the first nine month pregnant guest that we've had. So that's pretty cool.
02:36 - The Significance of Personal Touch in Business Relationships
Jack Jostes [00:02:36]:
But I also said, you never know interviewing people over Zoom, you never know so anyways, I'm excited for you guys. I think there are some tax breaks when you have kids. Is that.
Carla Policastro [00:02:48]:
Exactly, you get some tax credits right when you have kids. That is true. So something to look forward to.
Jack Jostes [00:02:54]:
Very good. You know, I was reading your website and you write a really great blog and generally, Carla, actually, I think I found you on social media just, just through being in the green industry myself. And then we've met at conferences and things. So I'm glad to finally have you on the show. And I enjoy all the content that you guys put out because it's very helpful. You guys have a Facebook group, it's Landscape Accountant with over 7000 members. So people, if you're listening, you should join that Facebook group and follow Cycle Cpa because they put out really great content. One of, one of the things that you wrote about in your recent blog post about cash flow lessons from a slow winter season was to not wait until winter to start thinking about your cash flow for winter and also to build up cash flow reserves.
03:47 - Key Strategies for Improving Cash Flow and Building Reserves
Jack Jostes [00:03:47]:
So those seem like obvious points, right? They. You're like, yeah, you know, that's kind of obvious. And it's hard to do because this episode is coming out in April. So we're heading into the time of year where our audience is, their income is increasing, but so are all of their expenses, from seasonal laborers to material expenses to vehicles and equipment. There's like, so how do you actually do that? What are some practical tips to actually do this spring and summer to be ready for winter?
Joe Policastro [00:04:22]:
I think when it comes to cash flow, like you said, I think it's a term that's used a lot, but I think, what does that actually mean? What are some practical things that you can keep in mind? I think even before you dive into that, even understanding what, what cash flow is. Right. And it's. And it's really thinking about, okay, how can we improve the liquidity of the company, you know, when it comes to basically all the cash that is coming in the company and all the cash that is leaving the company, right. Which, which is different than a lot of ways that companies may commonly view the financials. Maybe just looking at a profit and loss statement or maybe looking at certain aspects of a balance sheet, right.
Joe Policastro [00:05:07]:
But in essence, when you're looking at cash flow, it's almost combining both the balance sheet and the profit and loss, right. And all of the aspects that really, at the end of the day, make your bank balance go up or down, right.
Carla Policastro [00:05:23]:
And that's something where I think a lot of business owners don't know how to maybe read or haven't really been exposed to. You always listen about, like, the profit and loss so for a period. So, let's say that you start the year with $20,000 in the bank account and you end the year with $40,000 in your bank account. That means your net cash flow increased $20,000 for the. And it doesn't have to be the year. It could be a period, right.
Carla Policastro [00:05:54]:
Which could be your cash flow cycle. And so the, the goal of any business should be to increase that cash flow, right. You don't want to start the year at 20,000 and end it with 20,000 or the period, right.
Jack Jostes [00:06:10]:
Right.
Carla Policastro [00:06:11]:
That's really where we're trying to get at.
06:13 - Understanding Cash Flow Cycles and Forecasting for Landscaping Businesses
Jack Jostes [00:06:13]:
Okay, so when you talk about cash flow cycles in a period, what date ranges should landscape companies be looking at? Should they be looking at like 30 days, 60 days, 90 days? Should they go farther than that? Or how do you actually do that? And what are the date ranges that you recommend keeping an eye on?
Joe Policastro [00:06:37]:
When you're looking at historical information, it's always going to give you a clear picture. If you're looking at a larger time frame. When you start to look at a smaller time frame, whether it's a week, month, or a few months, it could make a big difference. If you have an extra payroll built into that or certain one off differences that may occur. One of the things that we like to look at is even if it's like year to date cash flow or the past twelve months for the net cash flow, and the average we see is typically around zero to 1% net cash flow, which is pretty low, right. And I think that as an industry, we should shoot for a higher, higher mark. The average of what we typically see is at least the companies where we work with is closer to maybe seven or 8%, right.
Joe Policastro [00:07:27]:
So there is a difference there. And that's why sometimes you may hear accountants say, or just really the importance of making a high net profit, because just because you are making a 7% profit doesn't actually mean that that's, you know, that's really impacting your bank balance at the end of the day.
Jack Jostes [00:07:48]:
Yeah, it doesn't mean that you have 7%. You don't have that number. That number might be your net profit on your profit and loss statement, but it may be different in your bank account. And I remember that was a difficult lesson for me to learn, was when I didn't know what these things meant or how to report them. I'm curious, ballpark, how many of your customers use Quickbooks online?
Joe Policastro [00:08:18]:
Close to. I would say 95%.
Jack Jostes [00:08:21]:
Okay. I was going to guess that. I use it also. How accurate, like, so, to get this number, this cash flow number, how accurate is just going into reports and cash flow statement out of the gate in Quickbooks? Is that accurate? Or how do we actually get this number is really what I'm asking.
Carla Policastro [00:08:42]:
Yeah. So it could be accurate. Like, you could go into reports and get your cash flow statement and get that number from there, but your accounting has to be done correctly. If your accounting is not done correctly or if it's not up to date, then that report is not going to be of any use to you. So firstly, you want to have an accountant that knows how to do accounting, and all that work is correct. Okay. And then you want to make sure that it's up to date so that you don't have, like, you know, the last time you reconciled your bank account was, you know, last year. Obviously, then if you pull that, it's not going to be correct.
Carla Policastro [00:09:26]:
But if those two things are in line, then you should be able to pull a cash flow statement and for that to tie out to your bank balance.
Jack Jostes [00:09:35]:
And this can kind of seem counterintuitive, right? Because in order to do that, in order to have your QuickBooks up to date, you need to pay to do that, because you either. You're either going to need to pay a company like yours, or you're going to need to pay an office manager, or you're going to need to do it yourself and think about how much are you being paid to do it? So is it, is it just, is it worth it? Because I think, like, I remember when I. When I was realizing how much bookkeeping actually cost, I was like, oh, man, this is, like, I hadn't factored into this, into my pricing and things like that. So how do you help your clients figure out, like, look, this is. This data is worth paying for. I had somebody tell me once that no data in your business is free. You're either going to pay for it from the time calculating it or from a software or from a human managing the software.
10:32 - The Value of Keeping Your Books Up-to-Date
Jack Jostes [00:10:32]:
And I think there's AI and different things, but the books need to be up to date, and it takes time and effort. Is it. Is it worth it?
Joe Policastro [00:10:41]:
Yeah. And I think it's. And when. When you're kind of going through that, and I'm sure you see the same thing, even if on the marketing side, it could be applied to any anything that you really outsource or you may have to invest in as a owner of a company, you know, and I think what it comes down to is there, there's no shortcuts to basically being able to kind of run a company and making sure that all aspects are being run smooth. Companies should think more in terms of okay, instead of thinking that it's an additional expense when you need to add it on, think ahead of time. When you're doing your estimates and building your budget for the year, put it into the equation from the start and think about ROI and think about what your ultimate long term goal is, because like I said, you're not going to get there, you're not going to build, especially when you get into multi millions or eight figure range. You're not going to get there without knowing the numbers or without investing into marketing and investing into recruiting and different things like that.
Jack Jostes [00:11:49]:
Yeah, I agree with you. And the way that I am able to justify the expense for myself is, well, one now that I actually plan it into my pricing. But to me, the speed and accuracy of paying my people promptly is very important because there was a period, and it's been over ten years since this happened, but we had a lot of cash flow issues. And when I didn't have the up to date books and I didn't have the knowledge then either I was getting paid late or not at all, or vendors were getting paid, or there was just like. And that creates a negative relationship. And in the landscape industry, when you're trying to hire people and recruit people, or you need those subcontractors to run your business, having this information helps you pay them on time so you can continue selling and being profitable.
Joe Policastro [00:12:41]:
Absolutely.
Jack Jostes [00:12:43]:
Can you tell me a little bit, roughly how many clients do you have and what kind of revenue range are they typically?
Joe Policastro [00:12:53]:
Yeah, so we're getting up to right around that 300 mark in regards to clients all scattered throughout the US. As for size, I mean, we really work with companies anywhere between a couple hundred thousand revenue up into the eight figure mark. So although we are pretty specific with the industry that we work with, we're pretty flexible with the size.
Jack Jostes [00:13:15]:
So I'm curious, what are some of the mistakes that you see companies, landscape companies who are under 1 million in revenue. What mistakes are they making with their bookkeeping and accounting when they're under a million that set up bigger problems for them later when they get to the multimillion dollar level.
13:35 - Common Mistakes Made by Landscaping Companies Under $1 Million in Revenue
Carla Policastro [00:13:35]:
I would say they're spending a lot of money in overhead, specifically overhead salaries. So whether that be office manager, project manager, supervisor, stuff like that. I think people are just looking to fill a seat before they really think about adding those expenses, those salaries on, you know. I think that this industry is so creative and great at working with their hands and making these beautiful landscapes and, you know, and stuff like that. But maybe something that, you know, we are lacking in the industry is really implementing processes and planning technology for those administrative tasks that need to be taken over. So when they are taken over, it's, you know, it's more like busy work and it's not really fully optimized, if that makes sense.
Jack Jostes [00:14:34]:
So are you saying that they, they over hire for those positions before they need them?
Carla Policastro [00:14:40]:
Yes.
Jack Jostes [00:14:41]:
Well, so I'm curious, how do you get to that next level without doing that? Because maybe, maybe you're, as the owner, you're doing the bookkeeping or you're doing all the invoicing, or you're doing whatever administrative task it is, and you might need somebody else to do that. So you can go focus on sales or recruiting or training your people. How do you get to that next level without a period where you are a little overstaffed on the admin side?
Joe Policastro [00:15:07]:
Yeah, that's a great question, Jack. And I think that the problem lies where people try to solve problems by sometimes trying to rely on these administrative people to basically solve it for them, right. When in reality, what they maybe should have done first was trying to see, okay, is there a software that could potentially solve this issue? Is there a process or a system that we haven't even made within the company? And what happens is, yes, when you're a $500,000 company, it's easier for you to try to fit someone in. But as you scale that model, it's going to make it difficult to basically keep up with some of that. I think definitely if companies are looking to hire ahead of time before they have all the revenue to support it, what that basically does, and it's great, but what it also does is it increases the risk of potentially being not as profitable at the end of the year after the fact. Now, I would say if a company is confident in the fact that they can bring in leads on the marketing side, if they have the infrastructure to recruit and keep good people, and they have the financial clarity into the company, making sure that all these things are in place before companies look to grow, I think that's where sometimes companies are not being realistic.
Jack Jostes [00:16:50]:
Yeah, I agree with what you said about asking the question first of, is there a software that could do this and do I have a process to do this? Because sometimes, and I've even made this mistake in my business of hiring people without the process and without the software to support them. One, it can really just not work. And two, it puts your company at risk, because if that person goes and you don't know the processes that they're following or the softwares that they're using, it puts your company at risk, especially if it's a key position like invoicing or accounting or really anything in your company. So one question that I would sometimes ask my CPA was, hey, we're growing. Can I afford to hire this position? And his answer was always, well, why don't you put aside their salary in a bank account for three months? And if you can afford to do that, then there you go, you can afford to do it, and you have three months of their salary saved up. And that was kind of a frustrating answer to get. But in reflection, it was a good one because it was ultimately like, do I have the cash to do this or not? How do you answer that question when your customers email you, hey, can we afford to hire this position?
Joe Policastro [00:18:15]:
Yeah. And I think a lot of what that comes down to is looking at the unit economics, right. And understanding, especially within the conversation of trying to scale from zero to over seven figures. There's a point where maybe one crew makes up 400,000. Think in terms of that and the profitability of that one crew and then scaling that one crew. So when it comes to the conversation of, should we add on some more equipment or should we add on more people, think more in terms of, okay, what is the track record and what is the profitability of our current units within the company or current divisions? And the more of a track record you have there, the more confidence you should have when you're taking on more people. Which is why there's companies now that they can add on 10 million in a year, right.
Joe Policastro [00:19:14]:
Because they have that, that process built in, right. But I think the problem becomes when the companies don't look at it like that, it's. It's like Walmart, for instance. You know, they, you know, instead of looking at all the billions of dollars that, that they have, you have to look at it at, okay, what is. What is that one store produce, and what is the profitability of that one store? And then find a way to basically scale it from, from that point.
Jack Jostes [00:19:43]:
I like that. And I was curious back to the spring and summer. So when we're in this time of year, do you recommend that people take a percentage of every dollar that comes in and that gets squirreled away into the winter bank account? Or like, how do landscape companies during the spring and summer actually prepare for that winter cash flow dip?
20:10 - How to Effectively Save for the Winter Season: Tips and Strategies
Carla Policastro [00:20:10]:
Yeah. So the approach that we take is we'll have a cash flow forecast. So basically what that is is forecasting your cash flow for the next six to twelve months. So what it's doing is it's predicting the, your bank account balance after each month. And basically what we're doing from there is building in scenario planning with them. So let's say that, we say let's save 5% of the money that's coming in every month. And how much is that going to leave us with at the end of the busy season? And is that enough to cover our fixed costs then during the winter season? So fixed costs being like, you're still going to have to pay your cell phone bill. You're still going to have to pay that admin employee.
Carla Policastro [00:21:02]:
So with the forecast, we could easily see that with building in those scenarios and how much we, that's going to tell us how much we need to save, right. And then we tell people, like, what we want to have as your savings goal is two times your fixed monthly expenses at the end of the day. So using that in coordination with the forecast allows us to be able to guide our clients in that way. So that way they're not scrambling during, you know, the winter season because you don't want to think about that during that time. And like, am I gonna have enough money, right. That's already too late of time to think about it, so this is the perfect time to start thinking about that.
Carla Policastro [00:21:44]:
Maybe building out a simple forecast, like on an excel sheet even, and then having that plan for, for yourself. And again, if you take your overhead expenses or whatever your fixed monthly expenses are and times those by two, you should be able to have like a rough estimate of how much you're going to need to save up.
Jack Jostes [00:22:05]:
I like that. That's, that's a, that's a great target. And I like that you're, you're working with them on that, on that forecast.
Carla Policastro [00:22:12]:
Yeah, it's continual. Like every month we work on it with them. And our target, our main goal is like, okay, make sure you're, you're doing well for the winter season. So it's not like we're just looking at it once or twice a year. It's every month.
Jack Jostes [00:22:29]:
What about businesses that want to be sold? For landscape companies who are looking to be acquired or sell their company what do potential buyers want to see when they're in that due diligence phase that our listeners, if they knew this, they could start getting their bookkeeping dialed in now, even if they're not even thinking about this for three or five years from now. What does a buyer want to see when they're getting under the hood?
22:55 - Preparing Your Business for Sale: What Buyers Look for in Financial Records
Joe Policastro [00:22:55]:
Yeah, I think when you kind of look into something like that, a buyer is going to want to see clean and up to date books. And what that does is it gives a really good impression and it really makes the company look so much more professional, and that's going to really have an impact. I would definitely encourage companies, don't make this something that you only think about when you're going to be selling in the next year or so. This is something maintaining clean books, but also trying to come up with an approach four to five years out, where you're putting yourself in a position where, you know, you can, you can make sure that, you know, you're going to, your, your company is going to look, you know, appetizing to someone that's going to be coming along.
Jack Jostes [00:23:56]:
Yeah, I think that's another reason that paying now to keep your books up to date is, is worth doing, is, one, it's going to give you the clarity to make decisions now, and two, it's going to make your business appear more desirable to a future buyer. I know someone personally who sold their business, and the negotiation process was like nine months long, and they were, like, basically audited, and they, like, really went into the weeds of the financials. And this person didn't have very good books and ended up having to pay a lot to get it where it needed to be. And I think the reason that happened was this person initially thought, oh, this is a lifestyle company. I'm expensing stuff that maybe I shouldn't have, and, like, I'm making money. I don't really care. So I know that can be an easy habit to fall into.
Carla Policastro [00:24:57]:
So I think that's the biggest thing I've seen, too, is, like, having a correct asset listing for your business and making sure that you're an active participant and when you're filing your taxes, I know that those tax returns could be lengthy and, like, our tax code is crazy here in the US, but I think, you know, at least looking at that list and knowing, okay, doing your due diligence, like, yes, I had that. No, I don't. I'm missing my skid steer that I purchased this year and stuff like that. I think that goes, those are not dollar purchases, right? Those are 2000 and up. It's worth your time to make sure that those are being done correctly.
Jack Jostes [00:25:41]:
Yeah. Having those asset listings is a continually moving target too, because with all the equipment and vehicles and things, where do you recommend people keep track of that? Do they just have an Excel spreadsheet or is there a QuickBooks tip? Or what would you like to see? What would your ideal client have? If you're like, oh, good job, you have your asset listing dialed in. How are people keeping track of that?
Carla Policastro [00:26:10]:
Well, the first place we look as accountants is like their tax return because that's where the asset listing is and that's where it lies. But sometimes even when we look at the tax return a client, will be like, no, that was wrong. They did it wrong. You know, like then they have something different on their end. But for the client, like I've heard AssetTiger for on the clients end would be a good place to have it even on an excel spreadsheet with the, as long as you have the date, the cost and how you financed it and obviously the amount and making sure that that lines up with your QuickBooks on your balance sheet and that both of those things matches, I think that would be great. Like, you should have one for yourself as a business owner, right. But you should always match that to what your accountant has as a second check.
Jack Jostes [00:27:05]:
I like that. One company that I know that seems to have it really dialed in, they also use that same spreadsheet to keep track of maintenance. They use Airtable, and we use Airtable at Ramblin Jackson mainly for sales and marketing, but they have reports and it helps them keep track of the certain aspects of maintenance that need to happen and when was the last one, and then it can set up reminders and that also for a potential purchaser. If, you know, if I had landscape company “A” who has their act together, they've got this Airtable showing me every oil change, every, all of these things, versus somebody who has messy books. I'd be more attracted to the company that has it dialed in.
Carla Policastro [00:27:58]:
Exactly. You're exactly right.
Jack Jostes [00:28:01]:
So we've talked a lot about accounting stuff and bookkeeping. It's been awesome. A lot of valuable tips. I was curious if you had any sales and marketing finance related questions for me.
28:15 - Allocating Budget for Marketing: Maximizing Growth and Profitability
Joe Policastro [00:28:15]:
Absolutely. So it's, it's a, it's a common topic that comes up with the meetings with our clients. You know, I would say one of the most common is, you know, how much should I be allocating towards a marketing budget? You know, even if you look at it as a percent of revenue.
Jack Jostes [00:28:31]:
So there's, there's a couple different answers. One is, what are people actually spending? And then what would I recommend that they spend? And this is a subjective topic, right. So I, what I really, what it comes down to is I think if you're in a growth mode, you're going to need to be spending more money on marketing. If you're wanting to grow faster, you should be spending more money, and then you might reach a point where your, your marketing is pretty well established, and at that point, you may need to spend less. So the range that I recommend to people is 5%. If you're in that growth mode, you may need to spend 5% of your target top line revenue. What I actually see companies spending is typically much lower.
Jack Jostes [00:29:20]:
It's typically between one and 2%. I personally spend a lot more than that because I'm looking to grow, and I actually track all of my marketing into my Quickbooks, and I'm able to analyze, like, what did I get for this? And was it worth it? And I'm able to make really clear business decisions about what am I getting out of this? So that's how I handle it. And I've talked with a few other green industry bookkeeping and accounting professionals, and they, they were in that two to 5% range. What are you seeing people spending? And then what would you recommend?
Joe Policastro [00:29:59]:
So the industry, based off of our internal data, with the clients we work with across all the different service lines, it varies slightly based on the service line, but for the most part, it lies right where you had mentioned. It's under 2%. But just like other metrics, though, it's kind of like, you have to consider other factors. And I would 100% agree with you, Jack. I think if a company is not established in their market, especially if they're just starting out, they're going to spend, especially even if they're a small company. I mean, they could spend 15% on marketing. But as you grow a company, the seven figure mark, I would say, like, a good investment into marketing to really drive growth would definitely be 5%. I would definitely agree with that.
Jack Jostes [00:30:54]:
I also think it depends on your local market competition. And so this is actually part of my new book that I'm working on, and I do a marketing audit for people, and we grade their market competition. So as an example, in Colorado, there's an area on the western slope. It's over the Continental Divide. The population is lower. There are fewer competitors there. So to rank on Google for in a smaller area over there, you'd need to do a lot less work because you're competing with fewer websites. But if you get into like Denver, Colorado, or Boulder, Colorado, or Fort Collins, Colorado, the population is growing.
Jack Jostes [00:31:38]:
Our population has grown tremendously. There's a lot of people moving here, there's a lot of landscape companies. So the competition is much higher. So part of that, even a $1 million company in Denver would need to spend more money on marketing to acquire a customer in Denver than they would on the western slope where there are fewer competitors. So that's why I think it partly depends. And also there are certain what I consider marketing assets that you can develop over time, like your website, your search engine optimization, your online reviews. If you've been building SEO and you have this robust website for five years and you have 100 Google reviews, at a certain point you can probably alleviate some of that marketing budget if you're happy at your revenue level because you've already paid to build it up until then. Whereas if you only paid for Google AdWords all that time, or Facebook ads, as soon as you stop paying for that, that marketing goes away.
Joe Policastro [00:32:45]:
Yeah.
Jack Jostes [00:32:46]:
So I think it, I think it depends on what type of marketing is being done and where you're at. And where I try to help people is establish what I call the Foundational Four; your branding, website, local SEO, and online reviews. Because those four things, if you have a great website, you're ranking on Google, you've got good reviews, even referrals, or people who see your truck, if they Google it and you're like, wow, this photo, this website's dialed in. It has awesome photos, it has 100 Google reviews, I'm going to call them. Whereas if that referral googles you and your website's ten years old and they get a referral to somebody else, then they Google them. This one looks better.
Joe Policastro [00:33:27]:
Yeah. I think companies, we like to see companies be relatively aggressive with their marketing budget. And the reason why is because the more leads that you're able to come across, the more picky you can be, which means the more profitable you can be because you can pick the jobs that are going to be most profitable. So even if you are in a position where you're using a marketing agency or maybe you feel like you almost have to dial back or just turn off your marketing or make certain adjustments, I would almost challenge you to not really focus on that, let those leads come in, work with the profitable ones. Because even if you're spending 2% more on marketing you can easily recoup that in those more profitable jobs. And at the end of the day, companies don't go out of business because they get too many leads. Companies go out of business because maybe they don't get the amount of jobs that they're supposed to get. Right, because the whole point, and I'm sorry, Jack, the whole point in a service based company is to make sure that your people are working right on profitable work.
Joe Policastro [00:34:42]:
And you need to do whatever it is to make that happen. And if you have to spend one or 2% more in marketing, it's not even a question.
Jack Jostes [00:34:54]:
I'm really glad that you said that because it can seem counterintuitive to spend money on marketing when you're getting a ton of leads. But you've got to ask that qualitative question of, well, what kind of leads are you getting? Are they a good fit for you? What kind of budget do they have? And when you're, we call this Hell Yes Customer. So they're in your service area. They need the services that you want. And a key piece is budget. Do they have the budget for your core, most profitable service? Because if you could keep your crews busy on the very profitable jobs and then turn away the unprofitable busy ones, or say, hey, thank you. We're currently scheduling these types of projects for November. Would you like to join our November list? I don't know.
Jack Jostes [00:35:44]:
Some people will say no, but some people will say yes. So I think that having that strong pipeline of new leads and the right leads, it helps you pick the quality ones out of there, and that does result in a higher profit margin. And on this topic, I have to tell this story often because I also think that there are certain projects that are too big. Right. I think sometimes landscape companies are like, oh, I need to do these enormous construction projects. And, and maybe you do. Maybe you're staffed and you do them very profitably. But sometimes I see clients that are on their website, they're marketing the biggest project they ever did, and they're getting leads for these giant projects that they don't even want.
Jack Jostes [00:36:30]:
So I think Hell Yes Customer to me isn't, it's not about the biggest customer. It's really, it's like, what's the right fit for your company?
Joe Policastro [00:36:40]:
Yes, absolutely. I 100% agree, Jack, because I think especially, and this is definitely an issue we see sometimes where companies take on a job that's double the size of what their current job is, and they think it's a good thing. But part of the issue with that is that they were maybe profitable in the past based on those smaller projects because they were able to see job closing reports and a specific pattern that was associated with that specific kind of work. But you can't carry that over to that other, to this other big job, especially if it includes different kinds of work and that you're not even used to doing internally. So I 100% agree with that.
Jack Jostes [00:37:27]:
Well, yeah, I mean, a lot of that comes down to then having accurate books. And can you run profit and loss by customer? Um, yeah, because if we, if we only focus on the revenue, we could really get in trouble fast. Well, Joe, Carla, thanks so much for coming on the show. Do you have any events or anything coming up that you want to tell people about, or generally, how can we connect with you?
37:52: How to Connect with Cycle CPA for Landscaping Accounting Needs
Joe Policastro [00:37:52]:
We have some resources and even recordings of our past webinars in our YouTube channel, Cycle Cpa. And, and I think whether you're starting off in business, whether you're really looking for some actionable points to help scale your company, definitely, you know, whether it's learning the balance sheet or, you know, tips on cash flow or, you know, purchasing assets, whatever it is, we probably have a webinar on it. So definitely check that out.
Jack Jostes [00:38:19]:
Awesome. Well, thank you guys for, for coming on the show. It's Joe and Carla Policastro from. Did I say it right?
Joe Policastro [00:38:28]:
Yeah, yeah.
Jack Jostes [00:38:29]:
All right, good. Policastro from Cyclecpa.com and I'll put a link to all that in the, in the show notes and hope to see you guys at a landscape show coming up soon. So thanks. Thanks so much for coming on The Landscaper’s Guide and sharing lots of tips today.
Carla Policastro [00:38:44]:
Thank you for having us on. I really appreciate it.
Jack Jostes [00:38:48]:
Hey, it’s Jack Jostes and thanks for watching this episode of The Landscaper's Guide Podcast. Make sure you like this video, post a comment or a question, and subscribe to our YouTube Channel so we can give you even more sales, leadership, and marketing inspiration to grow your snow and landscape company.
Show Notes:
Watch the full episode + see the transcript at: https://landscapersguide.com/podcast/
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