Have you ever submitted a quote to Mrs. Jones for $43,000 and she says, "Well, I have $40,000," and you cave and take it only to realize that you essentially did the job for free? Well, in today's podcast I interview Weston Zimmerman from SynkedUP, who shares two things that sabotage company profits and how to prevent them. Weston has been in the green industry all his life. He spent 15 years as an employee in a multimillion dollar landscape company, starting as a field worker, and then expanded to a crew leader and eventually director of marketing. That path led Weston to develop his own software, shoring up compan’s profits, and he now runs SynkedUP, which aims to help snow and landscape companies price their jobs correctly and track them to ensure that profits stay on target. He also hosts the podcast, the Cost of Doing Business. I'm excited to have you here today, Weston. So there are two things that sabotage company profits. What's the first of the two?
Two Things That Sabotage Landscape Company Profits
1. Getting The Math Wrong
Weston Zimmerman:
Yep. Well, this is a topic that you can split hairs on endlessly, but what it really boils down to is at the end of the day, there's two ways you can screw this up. One's getting the math wrong. That's the first one.
2. Getting The Estimate Wrong
And the way to fix that is building a budget. The second one's getting the estimate wrong. Like I said it was going to take five days, but it actually took seven days and you fixed that by tracking. But back to the first problem, with getting the math wrong, the million dollar question is, "Well, when I pay $10 for an item or it costs me $32 an hour for my payroll and expenses associated with payroll, what do I need to mark that up to also cover my overhead expenses?" That is the million dollar question that there is no one-size-fit-all model, but there is fortunately a slick little concept that we call budgeting where you just plug in all of your costs and expenses and overhead.
And really what it's doing is doing the math behind the scenes to determine, "Okay, when you pay $10 for an item, you have to mark it up by X to also produce enough dollars to cover your overhead expenses to get you to break even." Once you're at breakeven, then you can add your profit margin, whether that's 10, 15, 20, 30, make it whatever you want, whatever you're comfortable with. But that overhead, like, "How many dollars do I need to produce between my cost and my profit to make sure that I'm actually producing the profit that I want?"
Because what a lot of people will do is be like, "I don't know, it costs me X. I just double the price and I roll with it." And what can happen is as your business grows, your overhead is growing and pretty soon that model that maybe worked for you two years ago or three years ago is now sucking you dry of cash and resources as your business is growing, which is why you have to push it back to a cost-based method, which we call budgeting, where you simply plug your expenses in and it pushes your markups back out to you and essentially gives you your pricing.
Jack Jostes:
And how long do you think it takes for businesses to get to the point where they can even do that, right? Because every business is a little bit different. I think there's a certain amount of just getting started and doing it to even collect the data or is there a different way to approach budgeting out of the gate?
Weston Zimmerman:
Well, the way I would say it is if you're an owner or operator just starting out your first season, you still need a budget. It's just that instead of looking back on past history and basing your inputs on past history, you're making educated guesses, but a budget filled with educated guesses is a lot better than nothing, than a no budget. And then make sure you're doing a good job with accounting and bookkeeping, you have a solid P&L in your QuickBooks, and then you can be like, "Well, now instead of me making educated guesses as to what fuel's going to cost me this year, I can look back and be like, "I know what it's going to cost me."" And then you're basically having a feedback loop of looking at last year, predicting what I'll spend next year, and plugging that into my budget.
Building A Budget
Jack Jostes:
I love it. So once people have their budget, that's the first thing that sabotages landscape company profits, and it's kind of a moving target in some ways as you grow or you add on an additional overhead expense. How often are people needing to revisit or maintain their budget?
Weston Zimmerman:
Yeah, that's an excellent observation because building a budget, sometimes people kind of get the feeling that they'd say, "Oh, I do a bunch of front loaded work and then I solve the math problem and then I run off and do my whole little thing on my iPhone calculator forever." It doesn't work that way. I'll tell you a story. A SynkedUP user actually built a budget last year when he was essentially doing $800,000 in revenue. They grew really quickly and in a span of about 12 months, they doubled to $1.6 and he never updated his budget, which meant that the quotes he was shooting out the door were based on a budget of an $800,000 company, but he had the expenses of a $1.6 million company, a very different scenario. And what happened is ultimately his cash flow started drying up because he had all these expenses that weren't in the equation.
And so to answer that question, at a minimum, if you're not doing any budgeting, at least get one for the year. Next best case is to update it quarterly, even better update it monthly. Even better is checking it weekly because every dollar that you spend out of your company's checking account or your company credit card that is not in that budget somewhere, who pays for it? What was supposed to be your profit is what pays for it, what was going to be your profit is what goes to pay that. And if that problem is too acute or if you're on the extreme end of that, you can get to the point where you're literally not even covering your costs of being in business.
Jack Jostes:
And so the story of Mrs. Jones where we said it was going to be 43, we decided to do it for 40, I've seen people end up losing money on that, not just the $3000 gap, but they didn't update their budget for six months or 12 months. And also another challenge is just the cost of material, the cost of labor. If you've given people raises, has that changed in nine months? Probably.
Weston Zimmerman:
Exactly.
Jack Jostes:
So all of these things and inflation, the cost of supplies is changing. So I think doing it monthly is what I've seen the most successful landscape companies are doing. They are setting an annual budget, but they're updating it monthly. They're doing a rolling budget each month and keeping on track. So the first of the two things is budgeting. So let's pretend that we are on track with budgeting. We're at least doing it quarterly, hopefully monthly, maybe even weekly. We're dialed in with that. What's the second thing though, that even if we have a solid budget, can sabotage our profit?
How To Have Time Tracking In Place
Weston Zimmerman:
Well, so I'll answer that question with a hypothetical story. So let's say that you're doing a quote for Mrs. Jones and you look at that and you're doing your estimating. You're like, "That's going to be a seven day project," and it ends up taking 10. You could be doing your math technically correctly based on your budget perfectly and be bidding for seven days, but then when it takes you 10, it still wipes out your profit even though you did your math correctly.
And so it's really, really important that you, in some form or fashion, are able to compare what you had estimated with what actually happened in the real world. So you can look at that side by side, hopefully in real time, that's what we do at SynkedUP, or at least in a spreadsheet after the fact and be like, "Okay, this is where we did well, this is where we didn't do well. What can we learn from it? And I thought that this type of work takes seven days, it obviously takes 10. I'm going to tweak my estimating formula for the next time I do it to not repeat the same mistake over and over again."
That's ultimately the end-all be-all with job costing. It's not the nerd out over numbers, but it's to, "Where did I go right and where did I go wrong?" So I can learn from it and have that feedback loop. But to be able to do that, you have to have tracking in place.
You can't do that unless you have a good way of tracking how many man-hours went to what parts of the job, what materials were purchased to what parts of the job. That's where this whole thing falls apart. It's very easy to find the job cost in a spreadsheet. Once you have the data to plug into the spreadsheet, the hard part is having the discipline or having the systems and processes in place to be tracking this stuff on a daily basis and having that data flowing in that's populating your actual expenses.
Jack Jostes:
Well, and I think a key thing is the time tracking, the real time time-tracking on a daily basis, tracking expenses quickly because some people, they'll compile a bunch of receipts and at the end of the quarter, they'll mail them or scan them or send photos. Could you imagine being a bookkeeper dealing with this?
Weston Zimmerman:
I don't know how the world existed before spreadsheets.
Jack Jostes:
But anyways, so on an extreme end, people are sending those things maybe quarterly. I know some people do it annually and that's a disaster, but what are some of the ways that you can do it faster, the time tracking? And how do you get your team to do it?
Weston Zimmerman:
It's got to be easy or it's not going to happen. That's one rule. The other rule is the crews hold the keys. They are the ones out in the field. So if you're relying on third party information, somebody's filling out a paper form and then handing it to an office admin to plug into a spreadsheet somewhere, the chances of human error are infinitely higher. So the crews hold the keys is kind of a term we've coined here at SynkedUP. It's like we want to make it possible for that crew person to be documenting the information as quickly and as easily and as effectively as possible, not only for their benefits, so they know where they stand. Who wants to run a race with no finish line? As a crew person, when I worked at Tussey, I wanted to know how I was doing against what I had been allocated.
So it's got to be easy or it's not going to happen. And the other thing that's really critical about this tracking is in the early days before we had SynkedUP at Tussey, we would do all this stuff in spreadsheets, but the problem was it might be weeks after the job was wrapped up before the salesperson would come back and be like, "Hey, here's how we made out. And by the way, we didn't do so hot on this part of the job. Why do you think that is?" And he's asking me as the crew leader that had done the job and I'm like, "Dude, I'm on my sixth or seventh job since then. I don't know."
But if it's in real time, you better believe that I'm going to have good suggestions as to what maybe went sideways or why things didn't go as planned. And I might even be the one instigating those observations, like, "Hey, salesperson, I'm just letting you know that we had been working very efficiently, things had been going very, very well. We still did not have enough hours or enough material, and I just want you to know that for the next one." So the real time is almost as critical as the fact that you're tracking at all.
SynkedUP
Jack Jostes:
The real time tracking and the crews holding the keys and making it easy for them. So tell us a little bit about SynkedUP and why did you create it in this way? I know that one of the things that I really like about SynkedUP from what I've seen is the mobile component, that it's really a mobile-first, in my opinion, application that puts the software in the fingertips of the field crews so that way they can track these things right from their smartphone, and that's the way that you're avoiding the paper or the end of the week or the delay in time. So tell me a little bit more about that and how did you create it that way?
Weston Zimmerman:
Well, the biggest thing was budgeting software had already been created before we even wrote the first line of code for SynkedUP. So that wasn't necessarily the problem. There were good estimating tools out there. That wasn't really the problem. There was good CRM and calendar scheduling. There was good stuff there. What was missing was job costing, the ability to show estimated versus actual on a job. And also you mentioned the mobile app side of things. Because I was a crew leader for most of my career, and every system we ran through seemed to be designed and built for the backend, which is great. That's awesome. There's very many needs there, very many problems that it needs to solve there. But then the problem is, if that's the only person that serves, the data that's supposed to be flowing into there is coming from the people out in the field.
And so in a way, you're not any further ahead. Whether you're plugging the data manually at the office back into a software or into a spreadsheet, you're not really any further ahead there. So getting that communication between back office, front field and from front field back to back office again, that synergy was what was missing, which is what we set out to build. And so what we did with the mobile app is we really made it the crew foreman's favorite thing.
We worked really hard to make it not just something that the leadership is saying, "Hey, you have to do," but the foreman is like, "This is awesome. I can see everything I need to know. I don't have to be playing phone tag all day long. The questions I need to answer are right there in front of me. I can document everything that I care about so that I can make sure that they know about it." It's just that synergy and that flow of information from back office to front field was flowing, whereas most other products that were in the market before we started building SynkedUP that were kind of just back administrative type systems.
How Does SynkedUP Fits Into The Tech Stack Of Most Landscape Companies?
Jack Jostes:
Well, my personal opinion of software, I use a lot of it and I'm leery of softwares that claim to do it all, and the way I run my own business, I have a variety of softwares that do specialized things. So right now the audience is probably thinking, "Well, I already have X, Y, and Z softwares." So just talk to me about that. What other softwares are your customers probably already using and does SynkedUP replace that or does it collaborate with it and does it more so fit into this one specific area? Talk to me a little bit about how it fits into the tech stack of most landscape companies and integrations too.
Weston Zimmerman:
Yeah, so one thing is SynkedUP is not a replacement for QuickBooks. You still need a QuickBooks to tax prep, balance sheet, profit and loss. That's not what SynkedUP is. SynkedUP does integrate with QuickBooks online so that it's all seamless. But ultimately QuickBooks, that's my tax prep, that's my balance sheet, and profit and loss. SynkedUP is my business OS. It's my operating system, it's how I manage my projects, it's how I build my work orders, it's how I send out proposals and win jobs. It's how I schedule work and collect data from the field and compare ultimately and use it to price my jobs correctly, doing the math correctly, and then track those jobs to hold them up to the light and make sure that my estimates are actually on target and that I'm not losing profits without ever really cognitively being aware of it.
Then on the flip side of that, it's not a marketing CRM, it's not a HubSpot, it's not an ActiveCampaign. It's not what it replaces. So it's not a sales pipeline software. It's more of once you've got that qualified lead and now you're going out there to build an estimate for them, that's where SynkedUP starts.
SynkedUP For Route Planning
Jack Jostes:
Got it. So when it comes to landscape maintenance crews, what does SynkedUP do as far as route planning? Does it help with route planning and optimizing a route?
Weston Zimmerman:
Yeah, so we aim to bridge the gap. That was another thing that was missing in the industry before we started. It seemed like all these softwares were either design build-friendly and didn't work for maintenance or maintenance-friendly and didn't work for design build. And we're looking to bridge that gap. So the answer to your question is yes, we do route planning, recurring scheduling, and it works beautifully for keeping track of what services were performed so the billing is just a click of a button. Then that works great for snow, recurring maintenance, and property maintenance contracts. It's designed for both of those workflow models.
Jack Jostes:
And what about tasks and things? So let's say that I had a design build project and there's a design phase and now we're in a construction phase, and so I've got multiple phases with different tasks and things. How does it fit into that kind of project management realm?
Weston Zimmerman:
Yeah, if you're an Asana or a Trello power user where you have a really complex web of processes, it's not a replacement for that. You would still want to maintain that. If you're like, "Hey, it's out for a permit on this swimming pool or whatever," we don't really have a pipeline, board view inside of each job to track the different tasks that are going on at the time.
K.I.S.S. - Keep It Simple Stupid
Jack Jostes:
Right. So if the crews hold the keys, how do we get them to actually do it and do it accurately and do it well every day?
Weston Zimmerman:
Well, this is probably the best question you've asked yet because you can set up any elaborate framework you want, but at the end of the day, if you don't execute, it's useless. And in fact, it's probably sucking energy from you.
Jack Jostes:
Yes.
Weston Zimmerman:
So I'll paint out two scenarios. One thing that I've seen a lot is where an owner or operator or an owner will say, "Okay, this is what we're doing," and they'll shove the app under their crew's nose and say, "There, figure it out. Do it." Don't expect beautiful buy-in that scenario. So on the flip side, I truly believe that as human beings, we need to know why we're doing what we're doing. We need to be able to connect the dots and understand what impact my contribution has across the broader picture.
And so the way I like to portray it to get team buy-in for this extra work is basically two chunks, KISS, keep it simple, stupid, and second, help them understand why. So, in helping them understand why, you can ask, "Okay, hey, would you like to make more money?" "Yes." "I'd like to make more money?" "Yes." "We want to make the company more successful?" "Yes." "We want to grow this company?" "Yes." These are all the things that we're all on the same page on. "You want to grow. If I grow this company, you can have a career path here." "Yes." So these are all things we're all on the same page on.
And then I like to turn the tables and be like, "Okay, excellent. We're all on the same page, but for us to be able to do these things, we need to know our numbers. We need to know when we go and where we go wrong. And for us to be able to tell that, we need to track. For us to be able to track, I need you to be able to track your time on this app. And oh, by the way, there's all kinds of bells and whistles that you're going to love. You'll be able to see all the material list and all the notes and the correspondence and the photos, all these things that are also attractive for you as the crew leader."
In my opinion, when you portray it in that way of like, "Hey, if you do this," or, "If I as the crew leader do this, the company wins and we all benefit and I can see the impact, I can see the scoreboard of estimated versus actual progress bars on the hours on the job, I can see my finish line," then the good employee... You might still have employees that kick back, but I would say the good employees that truly care about making the world a better place and being a positive contribution to society will go in that with all four feet. And if you want to throw a little gas on the fire, bonus them based on performance.
Jack Jostes:
Well, yeah.
Weston Zimmerman:
Bonus them based on if they hit 10% underestimated man-hours, shoot them a bonus and guess what? You better believe it, they're going to be chugging their hours in there on time because they want to know where they're at.
Jack Jostes:
Well, that's what I do at Ramblin Jackson. We have an entrepreneurial pay plan where we pay it quarterly, and in order to be eligible for it though, you need to work here for a year. But it's a percentage of the company's net profit. And we have brackets where when the company's above a certain net profit, the bracket gets higher, so the bonus actually gets higher.
Weston Zimmerman:
Right, it scales.
Jack Jostes:
And then also in our company, meaning we have a simple table where we track, "Did you submit your time tracking on time?" Because even when I was doing the profit sharing and things, I had some people who just wouldn't do it, and they ultimately weren't a fit here. Whereas the people who want to be here are like, "Cool, I get it. It's kind of a pain in the butt." But once I started involving people in efficiency, ideas and I shared the profit and loss with them, and they actually helped find a lot of ways to become more efficient. So I think getting people involved in why you're doing it and if it makes sense involving them and looking at the numbers and looking for efficiencies, and if there is some sort of an incentive for them, I think it can work really well.
Weston Zimmerman:
Yeah, if you're constantly running over hours on a job, let's say, in the landscape business example, I bet your crew is going to have better suggestions than you are as to what we could do to fix that.
Jack Jostes:
Definitely. Yeah. The crew holds keys, like you said. I love that.
Weston Zimmerman:
A hundred percent.
Jack Jostes:
Well, Weston, tell us a little bit about your podcast.
Weston Zimmerman:
Yeah.
The Cost of Doing Business Podcast
Jack Jostes:
The Cost of Doing podcast and some of the gear you use. Before we recorded this, I learned that we use the same cameras. We use Panasonic G85. Well, I use J 85s and a GH5, so we both use that. You run a video podcast, the Cost of Doing Business. What's that show all about?
Weston Zimmerman:
So one of the things that has been a lot of fun in this whole SynkedUP journey is I've made a lot of friends in the Instagram contractor brotherhood that's out there in the Instagram world. And so one of the things that I've seen is there's this tendency, in all industries I'm sure, but in the landscape industry, it's definitely there where you follow someone and they have a lot of followers and it looks like their business is just perfect with a ribbon on top. And there's this comparison trap of like, "Man, he's already got a beautiful shop and a fleet of equipment and I don't." And so my goal was kind of twofold. One, I was talking with these people one-on-one and I knew that it wasn't all what Instagram maybe portrayed it to be. They were dealing with struggles just like everybody else was.
So I wanted to somehow get down and have more heart-to-heart real talk under the facade of Instagram type conversations and ask questions like, "What is the most difficult challenge you've ever encountered in your business?" Or, "What was something that made the biggest impact on your success?" Or, "What was the best advice you've ever gotten?" And try to have those deeper, more long form conversations to share out there in the community so that people can take heart, be encouraged, realize we're all in this together, and draw a deeper connection than just what's out there on the Instagram stories all day.
And I also wanted to have an option for people to get further underneath the thirty second marketing gimmick you might see on an Instagram video that we put out there on SynkedUP. "What truly did SynkedUP do for you? How do you really actually use it? Once you get past all the marketing content, what is the meat and the bones of the platform and what it does for your company?" That was another thing I wanted to try to bring out in long form content so that people that are maybe more cautious or more analytical before they make a purchase or make a move have material and content to really digest.
Jack Jostes:
What's maybe been the hardest thing for you in building SynkedUP?
Weston Zimmerman:
The hardest technical thing has been building the team that can actually produce and execute what's in my head, the vision I have for the product. That's been the hardest thing. We've hired people and then two, three years later went another route. And the sunk cost fallacy is real. It really sucks to admit that this is not working and go strike out on a new path. But fortunately today, probably for the first time ever in SynkedUP history, I feel like we finally have the core team that can actually produce the intent of what we have for the product as opposed to just like, "Oh, you want it to be a black square? Okay, I'll build you a black square." Never asking what it's supposed to be doing in the real world.
So engineers really have to understand the real world problem they're solving. Otherwise, there's too many assumptions that get made, and you might solve the problem, but it takes 10 clicks to get there, and it's like, "This is ridiculous." So that's one thing. And the other thing has just been realizing that on the whole mindset thing of just for the longest time... I'm still uncomfortable with this. For the longest time, I didn't want to call myself a CEO. I don't know, it just felt awkward.
Jack Jostes:
Totally.
Weston Zimmerman:
I'm a foreman. I'm a foreman from the Hillbilly Hills of Pennsylvania, man. I grew up wearing work boots my whole life. So becoming a leader and throwing a mission and a vision out there and rallying a team around that mission and that vision and going out there and actually making things happen in the world and all the self-limiting beliefs and the mindsets and all of that that comes with it, that's been probably the hardest thing just in the mindset personal growth bucket for me.
Jack Jostes:
I agree. I had the same experience, and for a while I had a business partner, and we were both co-owners. It was like super '90s. Our business card said, "Co-owner." And then whatever we did, and I really resisted it and didn't think I could do it, and it was the biggest thing holding us back, and I had the same experience. And I'm curious, when you made that mindset change, was that when you started having the team that you felt like could execute the vision?
Weston Zimmerman:
Ironically, yes. I don't know if that was by chance or if that was because of my mindset change, but yeah, you're right.
Jack Jostes:
I think they go hand in hand, and most of our audience listening has the same feeling. "Oh, I've done the work. I've been doing landscaping my whole life. I started my company when I was 14, and I'm not a CEO.
CEOs like Mark Zuckerberg is a CEO, right?" Or whatever. There's all this head trash that comes with the idea of being a CEO, but I think it is one of the most important things, especially for snow and landscape companies, on building that vision because that's really what attracts the people that then help build the company.
Weston Zimmerman:
I agree a hundred percent. I mean, you probably had been hearing the whole, "I can't find anybody to work for me." And I agree. It is an issue. It is a real thing. It's not-
Jack Jostes:
Oh, yeah, there is a labor shortage for sure.
Weston Zimmerman:
Yeah, it is a real thing. But I think when I'm perusing the Facebook groups and watching the chatter out there, I'm just like, "There is something that's not being talked about, and that is the lack of leadership." And I think it dovetails into what you're saying, "Oh, I'm just a landscaper that happens to have a half a dozen guys that work with me, and I can't find any of those half a dozen guys to work with me." Whereas, "No, I'm a business owner that is building a team, building a business to produce what we do." It's subtle, but I think it dovetails into what you're saying about, "Am I just a landscaper or am I a CEO of a landscape company?"
Jack Jostes:
Yeah, it's an interesting topic. I'd love to talk more about it, but we're out of time. So you have a cool worksheet that the audience can check out. Tell us where can we find that and how can we connect with you?
Weston Zimmerman:
So I can give you links, but if you just go to synkedup.com, scroll all the way down to the footer, there's a free tools section, and one of those is the budgeting tool worksheet. So we have a free budgeting tool there. It's kind of a step by step. You plug in all of your costs and then you get to the end, you can see what your man hour rates need to be, what your markups need to be, what your break even is. You can kind of go and execute what I've been kind of saying needs to happen. And obviously it's like a glorified spreadsheet on a web calculator. It's not like it's part of the app per se, but if you never build a budget, it's very, very eye-opening and it's a very valuable tool.
Jack Jostes:
Cool. Well, Weston Zimmerman from SynkedUP, that's SynkedUP with a Y, S-Y-N-K-E-D-U-P.com. We'll put a link to that in the show notes. Thanks so much for coming on the Landscaper's Guide.
Weston Zimmerman:
I appreciate the opportunity. It's been a fun conversation.
Jack Jostes:
Absolutely. All right, everyone. Well, that's a wrap. Thanks so much for listening to The Landscaper's Guide. I'm Jack Jostes. I hope you enjoyed today's show. If you did, be sure to leave a review wherever you're listening and subscribe at landscapersguide.com/podcast so you never miss an episode.