Our community of green industry pro’s in our Facebook group Landscaping Accountant helped contribute to these tips!
Leverage these techniques to lower material expenses in your green industry business:
· Buying in bulk, even during the off-season.
· Paying closer attention to estimates and taking the time to get exact measurements for the job.
· Build it into your process to check your yard for existing materials first.
· Cut out the middle-man, go direct to suppliers.
· Use a marketplace like GoMaterials, for improved sourcing and efficient plant procurement.
· Build better relationships with your vendors. Paying them on time is a great way to start!
· Don’t get too complacent where you purchase materials, continue to negotiate, or shop around for better prices.
· Provide detailed material budgets to your team, collaborate and empower them to make wise purchasing decisions.
· It’s occasionally beneficial to shop around for other vendors, but avoid using many vendors with small margin differences. It may be more cost effective and efficient to work with fewer vendors.
· Improve tracking and organization of existing materials in your yard.
· Maintain a win-win approach with your vendors, this a great long term strategy!
· Consider opening up a wholesale material supply company.
· Talk to the private drivers who work for the suppliers. Drivers don’t like to run “empty”. If they can do a load, they can typically get the material cheaper than the local landscape supplier.
· Develop a clear purchase order process.
· Specialize, and limit the variety in materials you offer to customers. This will decrease the likelihood of stocking up on materials you rarely use.
· Prioritize planning, purchasing on the fly or with a time constraint will increase the chances of having to buy over-priced material.
· Can vendors change price daily on you? If so, then that’s not good! Negotiate pricing around terms, and require them to give a certain time heads-up for any price changes.
· Our last point won’t decrease the material dollar amount, but improving your accounting and job costing process will improve accuracy and your ability to recoup material expenses for future jobs. This will lower your materials expense as a percent of revenue!
For more information on how we can help you stay on top of all the expenses within your business, check out our accounting services here.