The entrepreneurial spirit within demands that we (as small business owners) continue growing our business’s in order fulfill the goals we set for ourselves when we started out. These growth goals demand that we plan in some form in order to assist in achieving these goals. When making the jump from operating a small ‘mom and pop’ operation to running a full blown business enterprise, projecting cash flows becomes an issue that requires attention. One way to achieve these goals is to have reoccurring business each year. Often, we run around each fall (or spring) making presentations to customers in an effort to renew them for each season.
All this effort at signing renewals could be put into soliciting new business if the customer base was such that you only had to “renew” a third of the customer base for each season. To do this, consider signing customers to multi year contracts. If presented properly, most customers will welcome the idea of keeping expenditures “firm” for two or three, or even five seasons. Their expense budgets are then locked in for a long period of time, thus negating the need to plan for increased expenses for at least a portion of their exterior maintenance budget. This also allows the savvy property manager to make themselves look good in the eyes of the owner of the property.
With multi-year contracts, the landscape maintenance/tree care/irrigation maintenance business owner can then accurately project revenues for longer periods of time. The same holds true for snow and ice management portions of our business. Even though weather is a major factor in revenue generation, being able to project “average” revenues makes the snow contactor look much better to the lending institutions we must all deal with. Such long term projections allows a more accurate budgetary process, thus allowing the business owner the luxury of being able to plan for necessary purchases and other needed expenditures. Expense forecasting can be key to achieving profitability in the long run, and having multi-year contracts in place will then assist in projecting profits for the upcoming year, or years.
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