For us it is our financial year end. With final invoices dropping through the letterbox, I am working frantically to get them all on QuickBooks as soon as possible to see our draft year end financials.
Obviously I have a good idea already, and if needed I can extrapolate the figures forward, but it is nice to see the final invoices entered.
Like most, I am always watching my cost base against gross and net profit as %ratios. Any that are 'high' get special attention. Two figures that always gets my attention are green waste costs and fuel costs. Many previous threads have discussed all manner of ways of handling these costs and having been in the business years, I have probably tried and costed most methods.
I thought I'd share the route I have taken and look forward to alternative views ....
First area was green waste: A couple of years ago we changed our strategy on handling green waste. We were spending so much time double / trebling handling the waste in/out of trailers, plus the staff, vehicle, fuel costs and round trip times it became a real headache. Multiply that by a number of teams and it was obvious it was a cost that needed 'pruning' :-)
We run mainly commercial sites hence we have no opportunity to leave waste for the client to dispose of...
With the help of my Accountant, I looked at several scenarios and finally went down the route of buying a towed chipper/shredder. We now have a newer one and it have been one of the best investments we have made both financially and staff morale wise.
We segregate all our waste and process all pruning's & hard green waste thru the chipper / shredder to compost, leave to cook and reuse where we can.
It also means we can undertake more major jobs, faster, process the waste at point of produce and thus be more productive. We never tow trailers any more and thus get better fuel consumption and are not watching over our backs for VOSA :-).
We have reduced this cost year on year down to near 30% of what it was. This means payback will happen some time during FY2013/14.
For those difficult access or residential sites, we still have an Eliet Pro which I rate highly in that class, it fits neatly across the back of a van baulkhead with a pair of folding ramps, means it can be taken were needed. Nowhere near as fast the small towed machine but still allows waste to processed, left or bagged for removal.
Worth noting as these hybrid machines are available 2nd hand and are getting cheaper.
Second area was Fuel: I was frustrated dealing with fuel receipts (sometimes missing), expenses, cash floats etc. So, we went down the Fuel Card route.
We have cards for two major networks thru FCS with no costs, which gives us consolidated monthly invoicing, VAT reporting and NO employee/driver issues.Fuel cost are similar and maybe up 1-2ppl cheaper, but I'd take it normal prices due to reduced admin.
The recent ability to access your account on-line and slice / dice data is great - I give my guys a weekly or monthly report showing their usage & MPG.
Amazingly, our fuel usage has gone down a few % points :-) and I am thinking of a little competition for least fuel usage ;-). I now have much greater visibility of our 3rd major cost.
Would be interesting to hear if you monitor costs and what plans you have to address any major costs centres in the coming financial year
Remember, it is your potential profit figure that is at stake here :-)
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Replies
Hi Gary,interesting(as ever)post and good of you to share your experiences.We to have problems with green waste and currently deal with it via ton bags ,trailer and trips to our local(7 miles away)recycling plant(average cost £25 per load).Have long considered getting a chipper but think that the amount of space that even the eliet pro takes up wouldn't leave enough room for the rest of the gear(normally 2 mowers,2 strimmers ,2 hedgecutters,loppers etc).Theres also time spent operating the shredder and still having to remove the reduced waste,also particularly last year the vast amount of waste was grass cuttings.However always like to look at new gear and may try to persuade my better h
alf the merits of a chipper.
This makes an interesting read.
I like the idea of mpg competition as our fuel has sailed over 30k this year. I have also put a limiter on one of the vans to see if this helped (not a lot) but as you say towing is the killer. Not sure if we can get over that one as need to trail the bigger machines to numerous sites and some we have to return with tipper full of grass towing a trailer with large cut and collect ride on (with taco I hasten to add).
I agrees the chipper route is very beneficial as we can normally sell the chipped waste on in due course as mulch.
We use a yard skip exclusively for cut grass that can not be mixed for composting.
Ref : Fuel - feedback on speed limiters & trackers would be great. Is there a positive impact on vehicle insurance I wonder?
I know Brian @ MIB has dropped trailers for much larger vans.
For those of you with space, part-composting waste, including lawn cuttings mixed 50/50 with other waste, after 2 months including 2 turns, its a good quality mulch and can be used to sheet mulch shrub beds - This is my approach and it gets ride of about 70% of my waste, while controlling weeds and imrpoving the soil.
As for fuel - Review your routes every couple of months, Just changing the date of a few vists can pull the weekly mileage down by 10-15, this year Im aiming for 30 miles a week less than last year for the same round, simply through better planning.
Good and timely post Gary. Yes, I did drop the trailers in favor of buying and using a VW LT35 XLB Luton with tail lift. BEST decision I ever made for my business, wish I had done it years ago and now that I have and use one, I wonder why we bother with trailers in our trade, although I am lucky in the respect that all my big sites are cut and mulch, only my smaller sites require cut and collect so I dont have lots of grass to carry off site and dispose of. I modified / extended my trailer ramps to drive my Ransomes 728 up and into the back of my van and I still have plenty room for the rest of the days gear. On days when we are using my smaller JD ride on's, its even better, with lots of space for bags of grass. I reckon that the mpg is a little better than with my LDV and trailer, but it's not a huge amount of savings over the year, but there is at least £20 a week saved on fuel, so not bad.
In respect of of green waste costs, again Im lucky that my local Council offers a trade waste collection with 1100 ltr capacity bins and emptied weekly and a re-cycling ticket (both services are about £70 per month all in) and allows me to off load all my trade waste. I used to have a yard skip but it was costing too much for a weekly empty. £70.00 month waste cost is much better :-).
Gary RK said:
Bumped
Wanted to add we now take any additional green waste that we do not have to time to 'process/handle' to a local green waste processing site, which has also helped us tremendously as we can easily generate one or two vans worth a day at some sites.
This year, 40% of my waste was composted by myself, 40% on customers own site and 20% taken to one of 2 local farms for composting (Mixed with manure by the farmer).
Next year I intend to up my in house composting to 50% 40% 10% respectivly,
I have used my home made compost on my allotment, and given alot away.
To give an idea, I filled 11 2cubic meter compost bins twice over this year, so thats 44 Cubic M evenly split between hedge trimmings and grass clippings. Not bothered to turn them - instead just stick leaf blower into the base to get air into the pile.
After 4 months each bin has rotted to about 1/3 of size and is combined with 2 more to produce a full on and left to rot on... at 6 months this bin is down to half or thereabouts -
all in 22 loads has produced 4 full bins of well rotted compost - quite coase but very useable and made for excelent spuds and works a good mulch too.
Over last winter I also covered a pile covering 10sqm and 3m high and left it to rot down to half size).
Pictures below (fingers crossed)