(Graphic: The Herring Group) I’m a self-proclaimed numbers nerd, so it’s not surprising that one of the most gratifying projects I do each year is The Herring Group Landscape Industry Benchmark Report. What story does this year’s report tell? Most companies can be a lot more profitable than they are. Before we get into just how much more profitable landscape companies could be, here’s some background on our Benchmark Report, sponsored by Aspire , John Deere and Inova . This year, 151 companies participated, with revenue between $1 million and $120 million. To produce the report, we get income statements from all participants and format them to make them comparable. Then we analyze the data to generate useful insights for the participants. Key results At The Herring Group, we use operating profit margin to measure profitability. Operating profit equals revenue minus direct job expenses, indirect job expenses and overhead expenses (including straight-line depreciation expense). Operating profit margin is operating profit divided by revenue. This indicator measures customer satisfaction, the effectiveness of management and employees and efficiency. I encourage companies to plan for an operating profit margin of 12 percent and settle for anything above 10 percent as an initial […]
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