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Year in Review: Budgets in a Year of Uncertainty


By Jill Odom Note: This article was written Sept. 11


WHEN COVID-19 HIT, NORMAL went out the window and, naturally, impacted the budgets of lawn and landscape companies that had expected business as usual for 2020. The situation has been extremely fluid as various governing bodies having rolled out different orders in response to the latest information about the virus and how to contain it. Now with the year coming to a close, several companies share how they’ve faired and how they’re planning for 2021.


ADJUSTING BUDGETS COVID-19 affected both company revenues and expenses as certain clientele were impacted more than others and landscape businesses had unanticipated expenses with COVID- related PPE. Some of the other unexpected costs were due to increased prices on regular business purchases and labor inefficiencies as crews adjusted to following COVID safety practices For David J. Frank Landscape Con- tracting, based in Germantown, Wiscon- sin, they decided not to do a full re-cast of their budget. “We want to recognize the disparities


and challenge the team to absorb the costs and changes necessary to protect the health and welfare of our team members, customers and vendors, then address other ways to try to counteract the cost impacts of COVID-19,” says John Joestgen, LIC, COO of David J. Frank.


Joestgen says they’re in a healthy financial position so they’ve been able to weather the hit from the increased COVID-related costs. As time has gone on, he says they are back at full force revenue-wise and costs seem to be con- sistent over the past few months, includ- ing a leveling of COVID-related costs. David J. Frank serves a whole range of customers including commercial, institutional, retail, HOA and single-family residential. Likewise, Frederick, Maryland-based LandCare serves a diverse client base,


but CEO Mike Bogan, LIC, says many of their customers in the hospitality sector and a large group in the retail sector have been significantly impacted by the response to COVID-19. He says they reduced contract service for many of these customers. “Across our entire commercial portfo- lio, we have seen a reduction in discre- tionary enhancement spend, Bogan says. “Our budgets have been adjusted for the reduced revenue, and we are cautiously watching consumer behaviors to deter- mine how long their reduced spending will continue.”


Bogan says they saw a rapid revenue decline in March as clients reacted to the shutdown and its impact to their revenue stream, but things have stabilized for LandCare since mid-April.


Dennis Barriball, owner of Hemlock Landscapes, based in Chagrin Falls, Ohio, says they build their budget and sales plan in October, so they were well into working their sales plan when the coronavirus issue arose. “When we shut down for the man- datory time in March, we took what we call a ‘hard look’ at our budget,” Barriball says. “Based upon our discussion, we built three budget scenarios; worst case, break-even; an acceptable net profit budget (green); and a best-case scenario (dark green) but still shy of our original profit goal.”


Barriball’s company’s main customer base is high net worth and dual-income professionals. They provide residential maintenance and design/build services. He says they quickly passed the break- even budget scenario as the year has continued on and they started shooting for their green scenario. “We are currently closing in on achiev- ing that profit target and are working ahead to dark green profit,” he says. “That being said, we haven’t had to level out budget-wise as we have a firm grip on a daily/weekly basis of cash flow, revenue booked and gross margin.”


ADAPTING TO PANDEMIC LIFE Joestgen says they anticipated sales efforts might be negatively impacted when they were required to work from home, but their IT department reacted


quickly. He says accommodations were made, resulting in proposals and closing to be at or slightly above prior year numbers.


“I am pleasantly surprised at how successful virtual meetings have been in lieu of the previous face-to-face group meetings,” he says. “I suspect we will continue to use virtual meetings in some applications after the pandemic has subsided.” The company did experience a drop in spring color installations and some interiorscape clients reduced services to minimize non-employees in their office buildings, but these have rebounded now. Bogan says he stopped having expec- tations when he realized they couldn’t plan the changes 30 days ahead. “We are working hard to communi- cate with each client and serve them in accordance with their needs, but I have no ‘expectations,’” he says. “How will our clients react to each policy change and stimulus package, or are they even impacted at all? It’s different for every customer, so broad-based reactions on our part would be inappropriate.”


PLANNING FOR 2021


Joestgen says they’re hopeful the COVID variable will have little to no impact on their 2021 budget. “We will continue to monitor the number of cases and deaths in the state, monitor recommendations of the CDC and local governing authorities, witness whether a vaccine is made available and its effectiveness, etc.,” he says. Barriball says it is business as usual with their budgeting. They build from the profit line up using zero-based bud- geting. He says they will be looking at the advantages and disadvantages of bringing irrigation in-house. “We fully expect aspects of the pan- demic to be with us into 2021, as well as the economic impact of so many busi- nesses being deeply affected,” Bogan says. “Of course, behaviors are chang- ing, too, and as people learn to work, shop and dine differently, the use of the spaces we maintain will evolve. We expect consumer spending to be tight in the commercial segments and our planning will reflect that.” TLP


National Association of Landscape Professionals 9


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