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How Much? Estimating, budgeting, money and growth

Starting a landscaping business
I use QuickBooks for estimating unless it's a "one time" job for a new client--such as planting or reseeding--in which case I use my own template complete with job specific "fine print." In QuickBooks, I simply adjust the current estimate for the client for the next season instead of creating a whole new estimate. I add a line at the top that lets me know that it's been updated for the next year, such as "Estimate for 2009 Season." If you want to keep one "pre-edited" copy throughout the season for comparison purposes, then print it as a PDF (using free PDF creator and save them all to a folder on your computer. Then print the entire batch using your real printer for mailing to clients. I also email many of my estimates to save time, postage, paper and ink.

We'll cover the nuts and bolts of actual "on site" estimating later on in chapter ten: "In the field."

Use your QuickBooks budget religiously: Use numbers as accurately as possible. The more you work on getting these numbers accurate, the more meaningful they'll be to you. I go as far as figuring out what "percentage" of our annual mowing we do during each month so that I can more accurately forecast my cash flow each month. I actually figure out how many "Thursdays" (paydays) there are in each month so each month's labor data has a better chance of being dead-on. At the end of the year, I've had some "actual" expenses come within $2-$3 of the "budgeted" amount. I use the accrual accounting method for estimating and profit and loss statements; I use the cash method for accounting and tax purposes. The accrual method simply means you record expenses as they come due, and income as it is earned. This is important, because you want to know what you earned each month, not just what you collected and put in the bank. But for taxes, what you "took in" and "spent" is much simpler and straightforward. Generate both a profit and loss as well as budget vs. actual each month. Investigate when you're off more than 5% and answer the questions "why" and "do I need to do anything about it?" For me, much of the time it's simply because I plugged a purchase into the wrong month, or we had a late start due to a freak snow storm. Other times, I see that I over-spent on something and I make a note not to spend any more in that area for the rest of the year.

Budgeting and the LAW OF ATTRACTION
Here's something you won't read in too many business books: Don't be afraid to budget HIGH for income and LOW for expenses. Be aggressive: There is great power in planning and especially putting desires and plans in writing. My experience shows that when I expect less, I get less, and when I budget big, I get big. It's that simple. Don't be afraid to be wrong!! On the other hand, don't go crazy and decide you're going to double sales from $50,000 to $100,000 and put a down payment on 2 new trucks (that puts you in an unhealthy state of need). But "be brave" and stick your neck out JUST a little.

Out of sight, out of mind
I like to setup what I call a "sweep" account. This is an imaginary checking account that you "sweep" a set amount of money into each year and then forget about it. This can be for any purpose: New equipment, new truck-or just to have some padding and security. My advice is to go slow: ONLY put in what you can afford to miss. I made the mistake of putting too much in one time, then I ended up letting my "real" checkbook go in the red. It's worked out ok, though. I used to have $1,000 in there; now I have $3,000 and it's slowly but steadily building!

Another "trick" is to setup a SECOND sweep account for those pesky "big" bills that come regularly, such as monthly payroll deposits. After payroll each week, simply sweep an amount roughly equal to your weekly withholding into the account. Then it will be "out of sight, out of mind" until 941 time. This way you have the funds on hand when you need them. The key advantage to this type of sweeping is that it keeps your checkbook "realistic in the moment." In other words you don't have a deceptively large amount of cash in there, fooling you into thinking you have a lot of extra money to spend.

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