|
NOW UPDATED FOR 2006!
The most recent benchmarking data for Landscaping Contractors is now available, both in print and in downloadable PDF format, with your purchase of the Landscaping Contractors Business Benchmarking Guide. (NOTE: 2006 updates not yet available in online HTML subscription version of this guide - please call MAUS Sales Centre on 1 300 300 586 for further info.)
This Small Business Profile presents the results of a survey of Landscaping Contractors for the financial years up to June 30, 2004. The survey was based on 24 businesses.
Gardens are blooming; grass and weeds are growing; outsourcing is in for both corporate customers and busy families. Together these factors create strong demand.
Running this business well means watching the materials costs closely - maybe customers (not the contractor!) should be encouraged to buy materials for the job. Cost control in overheads makes a difference here too, like many other sectors.
The real win though, comes from maintaining high personnel productivity - have a range of people who work at the right level (eg a some skilled people, with some labourers to assist under instruction). Mixing full-timers and part-timers also ensures that the right people are available at the right time.
Using some outside specialists is also a good way to provide a complete, convenient and skilled service to customers, and keep the flexibility that's so important for the business.
Survey Results
These are the results of a survey of landscaping contractors. These results should not be considered to be representative of all landscaping contractors in Australia. However, they will allow business owners to identify strengths and weaknesses in the ability of their business to generate revenue, control expenses and earn sufficient profits. This is done by identifying these elements of business performance and comparing them with benchmark performance levels currently being achieved by the sample of businesses in this survey.
Most of the landscaping contractors in our survey were from the eastern states of Australia. New South Wales was the most heavily represented area, while there were no firms located in Tasmania, Western Australia or the Northern Territory in our sample.
Businesses from suburban areas and capital cities represented around 64% of the entire group. The remaining firms were divided between larger regional cities (population over 20,000) and smaller rural centres (population under 20,000).
The following table will give you a snapshot of the variance in results found in your industry for various Key Performance Indicators (KPIs). Each KPI (shown in rows) should be considered independently of each other. For example, a business with a high percentage gross profit would not normally also have a high relative percentage of their income spent on wages.
For each KPI, the table shows the average, high and low results found in the business surveyed. The KPIs should not be 'added together' under the high and low columns as they do not necessarily relate to the same business.
The KPIs show the 2nd highest and 2nd lowest actual result for each performance indicator. The range of values shown therefore covers the middle 80% of reported results.
| Indicator | Average | Low | High |
|---|
| Materials Used | 36.74% | 26.08% | 53.03% | | Sub Contractor Costs | 6.54% | 0.00% | 18.66% | | Gross Profit | 56.72% | 42.93% | 73.92% | | Wages and Salaries (staff only, not owners) | 18.05% | 10.54% | 24.66% | | Vehicle Operating | 4.53% | 2.59% | 7.30% | | Depreciation, lease of equipment | 3.26% | 0.66% | 6.48% | | Net Profit (bos*) | 19.14% | 6.25% | 26.49% | | Gross Profit per Person | $52,618 | $39,040 | $66,079 |
*(bos) before owners' salaries
and benefits
So, how does your firm 'stack up' against these averages? These results will give you an idea of where your business falls in relation to the sample and give you a better understanding of your relative strengths and weaknesses.
The remaining expense items each represented less than 2% of total income on average; however some businesses reported some larger results for such items as:
- Interest, Bank Charges etc of up to 7.38%;
- All Occupancy Costs of up to 6.79%;
- Repairs & Maintenance of up to 7.98%;
- Staff On Costs of up to 5.72%;
- Telephone & Fax of up to 3.69%.
To summarise this, larger businesses had:
- Higher net profit per owner and per owner work-hour;
- Lower non-salary overheads;
- A more extensive usage of sub-contractors;
- Lower levels of asset productivity..
The more profitable businesses:
- Were slightly larger on average;
- Had higher gross profit margins, resulting from lower materials costs and offset by slightly higher outlays on sub-contractors;
- Had slightly lower non-personnel overheads;
- Reported higher personnel productivity, which in turn kept the higher staffing cost in check.
| 
