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The EquiScape Library · Reference guide
95 terms and 41 acronyms for running a landscape company by the numbers, each linked to the guide that teaches it.
Revenue and expenses over a period; also called the income statement. A video of the month.
How it's figuredRevenue − Direct − Indirect − Fleet − Admin = Net Profit
How to use itClose the books monthly and review it by the 15th. Compare to budget and last year.
Everything invoiced for work performed. The "top line."
How it's figuredIn-house work + subcontracted work
How to use itTrack by division and month. Sales alone don't pay bills; margin does.
Costs that exist only because a job was done.
How it's figuredField labor + materials + subs + rentals + dump fees
What jobs earn before paying to run the company.
How it's figuredRevenue − Direct Expenses
How to use itGP, not revenue, pays overhead. Grow GP dollars, not just sales.
Cents kept from each $1 of sales after job costs.
How it's figuredGross Profit ÷ Revenue (e.g. 60.3%)
Indirect: labor burden on the P&L (payroll taxes, W/C, PTO, travel). Fleet: cost to own, fuel and repair trucks and equipment.
How it's figuredBurden costs; Depreciation + fuel + repairs + fleet insurance + small tools
Costs paid whether or not crews work: office, rent, insurance, admin pay.
How it's figuredIndirect + Fleet + Admin; Ratio = Overhead ÷ Revenue (e.g. 50.2%)
The bottom line: what the business earned.
How it's figuredRevenue − all expenses
Cents of true profit kept from every $1.
How it's figuredNet Profit ÷ Revenue (e.g. 10.1%)
Change in sales versus the same period last year.
How it's figured(This Year − Last Year) ÷ Last Year
How to use itCompare same months year to year; seasonality makes month-to-month misleading.
Accrual records revenue when earned and costs when incurred; cash basis records them when money moves.
How to use itManage and sell on accrual. Buyers and lenders expect it.
What the company owns and owes on one day. A snapshot.
How it's figuredAssets = Liabilities + Equity
How to use itReview monthly with the P&L. Net profit flows into equity.
Current: cash or turns to cash within a year (cash, A/R, inventory). Fixed: long-lasting (trucks, equipment).
How it's figuredFixed shown net of accumulated depreciation
How to use itToo much cash tied up in A/R or idle equipment shows up here first.
Current: due within 12 months, including this year's loan payments. Long-term: due after that.
What owners truly own after every debt is paid. Includes retained earnings.
How it's figuredAssets − Liabilities
How to use itGrows with profit kept in the business; shrinks with draws and losses.
Spreading an asset's cost over its useful life. An expense with no check written.
How it's figured(Cost − Resale) ÷ Years
The cushion to cover short-term bills.
How it's figuredCurrent Assets − Current Liabilities
How to use itShrinking working capital in a growing company is an early cash warning.
Current assets for every $1 due this year.
How it's figuredCurrent Assets ÷ Current Liabilities (e.g. 2.1 : 1)
How much the company relies on borrowed money.
How it's figuredTotal Liabilities ÷ Owner's Equity (e.g. 0.96)
How to use itUnder 1.0 means owners fund more than lenders. Check before financing equipment.
Cash taken by owners. Not an expense on the P&L, but real cash out.
Amount added on top of cost, as a percent of cost.
How it's figured(Price − Cost) ÷ Cost
How to use itA 30% markup gives only a 23.1% margin. Convert before you price.
Margin is based on price; markup on cost. The P&L reports margin.
How it's figuredPrice = Cost ÷ (1 − Target Margin); Markup = Margin ÷ (1 − Margin)
How to use itSet prices from the margin you need. Keep the pocket chart at the estimating desk.
Cost riding on every paid hour beyond the wage: FICA, FUTA/SUTA, W/C, PTO, travel and lot time.
How it's figuredBurden costs ÷ base wages (e.g. 20%)
How to use itAdd health insurance, retirement match and gear if you pay them.
What one field hour actually costs you.
How it's figuredBase Wage × (1 + Burden %) ($25 → $30)
Field hours you can charge a customer, not every hour you pay.
How it's figuredField staff × billable hours each
How to use itThe denominator for equipment and overhead per hour. Be realistic.
Full hourly cost of a machine: owning it plus running it.
How it's figured(Ownership cost per year ÷ hours used) + fuel + maintenance
How to use itPrice into every job. Idle hours raise the rate; use it for buy-or-rent.
Lowest hourly price that covers all costs.
How it's figuredLoaded Labor + Equipment/hr + Overhead/hr
How to use itNever bid below it. Every hour under it loses money.
What you charge per man-hour, including profit.
How it's figuredBreak-Even Rate ÷ (1 − Target Margin)
How to use itRebuild yearly from your own costs, not a competitor's price.
Revenue left per hour after materials, equipment and subs at cost.
How it's figured(Revenue − materials − equip − subs) ÷ crew hours
How to use itShould beat the target billing rate. If not, the bid is underpriced.
How much each field hour brings in.
How it's figuredRevenue ÷ field labor payroll hours (e.g. $110)
How to use itFalls when crews are slow, idle or underpriced.
The planned price built line by line: cost × markup.
How it's figuredΣ (each line's cost × its markup)
How to use itCheck gross margin and realized rate before sending.
Tracking actual costs on each job against its estimate.
How it's figuredSame buckets as the P&L, one job at a time
How to use itReview closed jobs weekly. Fix estimates with what you learn.
How close actual job margin came to the estimate.
How it's figuredActual GPM ÷ Estimated GPM (100% = on plan)
How to use itUnder 100%: find the line that missed (hours, materials, equipment).
Share of jobs that beat your target margin.
How it's figuredJobs with GPM > target ÷ total jobs completed
How to use itShows whether good margin is the rule or a few lucky jobs.
Share of jobs finished within estimated hours.
How it's figuredJobs within estimated hours ÷ total jobs
How to use itLow scores point to estimating or crew-efficiency problems.
Share of paid field hours spent on revenue-producing work.
How it's figuredHours on job tasks ÷ total field payroll hours
How to use itLost hours are usually drive time, loading and waiting.
Field wages as a share of revenue (before burden).
How it's figuredField labor wages ÷ Revenue (e.g. 22.7%)
How to use itRising labor % with flat sales means crews are producing less per hour.
Material or total equipment costs as a share of revenue.
How it's figuredMaterials ÷ Revenue; Equipment (incl. fuel, repairs, ins.) ÷ Revenue
How to use itCompare by division; installation runs higher materials than maintenance.
Share of workdays equipment was unavailable.
How it's figuredDays unavailable ÷ total equipment workdays
How to use itHigh downtime raises cost per hour and rental spend. Plan replacements.
Outside trade hired for part of a job (irrigation, lighting).
How it's figuredPriced at cost × sub markup
Actual money in and out of the bank. Different from profit.
How it's figuredNet Profit + Depreciation − A/R growth − loan principal − draws − taxes
How to use itRead P&L, Balance Sheet and Cash Flow together every month.
Money customers owe for work already done.
How it's figuredFrom the Balance Sheet
How to use itReview the aging report every week, not month-end.
A/R sorted by how late it is: 0–30, 31–60, 61–90, 90+ days.
How to use itOver 90 days is at risk. Assign a caller and a date to every late invoice.
Average days to get paid.
How it's figuredA/R ÷ average daily sales (= A/R ÷ annual credit sales × 365)
Bills you owe vendors and suppliers.
How it's figuredFrom the Balance Sheet
How to use itPay in priority order. Promise vendors only what the plan supports.
Average days you take to pay suppliers.
How it's figuredA/P ÷ annual purchases on account × 365
How to use itLonger helps cash, but only within terms. Paying late costs credit and pricing.
The most you can spend this week.
How it's figuredReal bank balance + deposits you're confident will land in 7 days
How to use itEvery payment decision starts here, not with the QuickBooks balance.
A floor of cash held back for a slow payer or broken truck.
How it's figuredSet once by the owner
How to use itIf ending cash falls below it two weeks in a row, call your CFO.
How long you could cover overhead with no sales.
How it's figuredCash ÷ monthly overhead (e.g. 1.5 months)
How to use itBuild it up before November in a seasonal business.
Work sold but not yet done, in months of revenue.
How it's figuredSold, not done ÷ monthly revenue (e.g. 2.2 months)
How to use itA thin backlog in spring means sell now; a deep one means hire or schedule.
Winter months when overhead continues and revenue drops, and the cash set aside to cover them.
How it's figuredGap = negative cash flow, Nov–Feb; Reserve per month = Gap ÷ season months
How to use itHit the reserve by Nov 1. Snow, pruning and 12-month billing shrink the gap.
Revolving bank credit, drawn and repaid as needed.
How to use itApply in late summer or fall while numbers look best. Pay down each spring.
A legal claim on property for unpaid work. Deadlines are strict and vary by state.
How to use itKnow your state's notice and filing deadlines before you need them.
Monthly sales needed for a $0 profit month.
How it's figuredOverhead ÷ Gross Margin % (e.g. $55,230 ÷ 60.3%)
How to use itTurn it into a daily target crews can rally around. Above it, margin is profit.
The year's plan: sales by division and month, profit goal, job costs and overhead.
How it's figuredRevenue goal → profit goal → job costs at target GM → overhead
How to use itBuild before the season, spread by season (not 1/12), update mid-year.
Comparing each P&L line to plan, for the month and year to date (YTD).
How it's figuredActual − Budget (favorable or unfavorable)
How to use itAct on the largest gaps first. Look for three-month trends and compare YTD to last year's YTD.
A number tied to a goal, reviewed on a set schedule.
How to use itPick about ten. Set targets once; mark each green, gold or red monthly.
KPIs grouped into financial, operations, people and customer views.
How to use itKeeps attention on what drives profit, not just profit itself.
Share of planned sales achieved.
How it's figuredActual Revenue ÷ Budgeted Revenue (e.g. 91.7%)
Typical job size, all work.
How it's figuredTotal revenue ÷ number of jobs
How to use itSmall average jobs carry more drive and admin time per dollar.
Typical value of a recurring (maintenance) contract.
How it's figuredRecurring revenue ÷ number of recurring jobs
How to use itRaise it with enhancements sold to existing clients.
Share of customers happy with your service.
How it's figuredSatisfied customers ÷ customers surveyed
How to use itSurvey after jobs and at renewal time. Follow up on every unhappy answer.
Would customers recommend you? Asked on a 0–10 scale.
How it's figured% Promoters (9–10) − % Detractors (0–6); passives (7–8) excluded. Range −100 to +100
How to use itTrack the trend, not one score. Ask promoters for reviews and referrals.
Share of customers with more than one job.
How it's figuredCustomers with >1 job ÷ total customers
How to use itRepeat work costs less to sell and supports recurring revenue.
Share of last year's recurring customers still under contract.
How it's figuredLast year's customers with current contracts ÷ last year's customers
Gross profit a customer generates over the relationship.
How it's figuredAvg contract value × avg GPM × avg years retained
How to use itTells you how much you can spend to win and keep a customer.
Prospects who fit your services, area and budget, and the share who become customers.
How it's figuredLeads: count per period; Conversion = new customers ÷ qualified leads
How to use itTrack by source. Low conversion points to response speed or lead quality.
Dollar share of estimates that are won.
How it's figured$ of estimates sold ÷ $ of all estimates
How to use itVery high close rates can mean prices are too low.
Average time from estimate created to estimate sold.
How it's figuredAverage (sold date − created date)
How to use itFollow up on a schedule; long cycles stall the backlog.
Count of 5-star reviews on Google, Facebook and similar.
How it's figuredCount per period
How to use itAsk at job completion, while the result looks its best.
Share of clients who fit your ideal client profile.
How it's figuredClients fitting ICP ÷ total clients
How to use itDefine the ICP first: size, service mix, location, payment habits.
How much of revenue depends on your largest customers.
How it's figuredTop customer (or top 5) revenue ÷ total revenue
Share of employees who stayed through the year.
How it's figuredEmployees at start of year still employed ÷ employees at start of year
How to use itTurnover drives training cost, errors and lost hours. Buyers check it.
Would staff recommend working here? 0–10 scale.
How it's figured% Promoters (9–10) − % Detractors (0–6)
How to use itSurvey anonymously twice a year; act on what you hear.
Average training time per person, and the share of assigned training actually completed.
How it's figuredHours = training hours ÷ employees; Completion = completed ÷ assigned
How to use itKeep logs; buyers and insurers ask for them. Pair with safety and quality results.
Workdays with no reported accident in the year.
How it's figuredCount per year
How to use itFewer claims help hold down workers' comp rates over time.
Office payroll compared with field payroll.
How it's figuredOverhead staff payroll ÷ field staff payroll
How to use itWatch it as you add office roles; each must support more field revenue.
Share of staff meeting or beating their personal KPIs.
How it's figuredStaff meeting KPIs ÷ total staff
How to use itGives each role a number to own.
Share of scheduled workdays with a late arrival or absence.
How it's figuredLates (or absences) ÷ (working days × full-time staff)
How to use itLate starts idle the whole crew; track by crew leader.
Revenue, margin and profit by line of business: maintenance, enhancements, installation, snow.
How it's figuredDivision GP = Division Revenue × Division GM
How to use itSales mix isn't profit mix. Code every job and cost to a division.
Revenue from contracts that renew, usually maintenance.
How it's figuredRecurring revenue ÷ total revenue
Earnings before interest, taxes, depreciation and amortization.
How it's figuredNet Profit + Interest + Taxes + Depreciation + Amortization
How to use itThe starting point for valuation. Have your CPA confirm the numbers.
Expenses a buyer won't have: above-market owner pay, one-time costs, personal expenses.
How it's figuredDocumented with receipts
What a buyer believes the business really earns.
How it's figuredEBITDA + documented add-backs
How to use itAt a 4× multiple, $10K more of lasting earnings adds about $40K of value.
Earnings to one owner-operator; common for smaller companies.
How it's figuredEBITDA + one owner's total compensation
How to use itUsed for owner-run businesses; Adjusted EBITDA for larger ones.
The number a buyer multiplies earnings by.
How it's figuredValue = Adjusted EBITDA × Multiple
How to use itMoves up with recurring revenue, clean books, a team and a good fleet.
Enterprise value is the business price; owner proceeds subtract debt (and taxes, fees).
How it's figuredEnterprise Value − Debt = Equity Value
How to use itPaying down debt before a sale raises what you keep.
A buyer's written, mostly non-binding offer: price, structure, timeline.
How to use itReview structure, not just price: earnouts, holdbacks, working capital target.
Earnout: part of the price paid later if targets are hit. Holdback: part held back to cover claims after closing.
How it's figuredSet in the LOI and purchase agreement
How to use itCash at close matters more than headline price. Know what's at risk and for how long.
The normal level of working capital a buyer expects left in the business at closing.
How it's figuredUsually a trailing 12-month average
How to use itAbove the peg can raise your price; below lowers it. Plan for seasonality.
The buyer's detailed review of financials, contracts, fleet, people and legal.
How to use itEvery gap they find is usually a reason to lower or hold back price.
An accounting review that tests reported and adjusted EBITDA.
How to use itMonthly accrual closes and documented add-backs make it go faster.
How well the business runs without the owner.
Where a company ranks among U.S. landscape businesses by revenue.
How it's figured$1M ≈ top 4.5%; $3.2M+ ≈ top 1%
How to use itUse for context and goal setting, not as a profit benchmark.
A part-time CFO who plans ahead: pricing, cash forecasting, KPIs, financing, value.
How to use itKeeps the bookkeeper and CPA; directs the team and turns numbers into decisions.
Markup is on cost; margin is on price. A 30% markup is only a 23.1% margin.
Profit is the score on the P&L. Cash is what's in the bank. Draws, loan principal and slow payers separate them.
Revenue is what you bill. Gross profit is what's left to pay overhead.
WC usually means working capital; W/C is workers' comp. Spell it out on reports.
Adjusted adds back owner and one-time items. Only documented add-backs count.
DSO: how fast customers pay you (lower is better). DPO: how fast you pay vendors (within terms).
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