Editorials

Jerry Gaeta

Are you optimistic for 2020?

By Jerry Gaeta

The HNA show in Louisville is the winding down of a long season and time to begin reflecting on the success of all the planning, effort, time and stress it has taken to reach this point. Having attended many of these shows in my 43 years as a landscape contractor and then as speaker, I am always interested in what the general mood of the attendees will be.

The hardscape vendors I spoke with were very upbeat on the year and looking ahead for next year. It is always exciting to see all new products introduced at the show. These folks are our partners in business in that they are always looking for new and better products, tools and equipment for the contractor to become more efficient both in the field and the office.

For the most part I believe contractors are an optimistic bunch. I say this because most of them make little or no net profit while working extremely hard, and they still seem to be happy.

Most contractors I talked to said work was plentiful and they could have installed more projects if they had been able to hire the people they needed. Some folks thought a little slow down in this booming economy might be good to free up labor. Not sure about this philosophy!

With a shortage of labor, a concern that I heard was that the ethics in recruiting employees has hit a low. It seems it is not uncommon for competitors to walk onto other’s jobsites and recruit. Such a shame. Always do things with integrity in an ethical and moral way.

Despite the labor issue most contractors said they have had a good year. But what does that really mean to have a good year? Is it more work, good employees, less stress, time off, better clients, good equipment, money in the bank, reduced debt, or just a good net profit – reward for risk and effort?

The interesting thing I’ve discovered in presenting seminars over the years is that when I ask, “Have you raised your prices this year?” very few hands go up. Also, very few know their breakeven point in estimating a project.

The price of labor went up but contractors aren’t raising their prices to compensate for it or take advantage of this good economy. What happens when the economy slows or hits a downturn as in 2008 and sales drop? The answer is important for the future of your company. Maybe it is time to get a handle on your costs and estimating strategy.

It is distressing that so many contractors will have worked hard all year but will not get the fair market profit they deserve based on the risk they take on. Profit is return for risk, it provides the capital needed to grow your business, and the financial future for you and your employees.

2020 is a presidential election year and historically in the second half of the year consumers become conservative in purchasing larger ticket items such as hardscape projects. Plan your sales strategy to allow for this possibility and compensate for it.

Make 2020 the year you create a budget to be able to recover all your costs, learn your breakeven point with a good estimating system, and make a profit for the future. The definition of insanity is “doing the same thing time and time again and expecting different results.”

Make the change for you, your family and your employees.

Jerry Gaeta is a consultant and speaker, a past Vander Kooi Associate and president of J. Gaeta Business Planning, dba Seashore Enterprise, LLC. “Improving business performance and quality of life since 1994.” Email JerryGaeta@comcast.net