(Latin; Meaning – made discontinuous (Botanical) Not followed by the expected chord (Musical) or Stop the continuous progress (Activity)
In the case of Landscapers, probably all three are relevant, plus more besides, given the dreadful weather we have been suffering for several weeks now. Last year, most contractors were pleased to see that the promised downturn in work as a result of Brexit was confounded by the resilience of our customers and the positivity that had grown out of too many years of austerity, both real and imagined.
Wallets were opened, and a lot of seriously exciting projects were accepted and commenced, only to be interrupted by the aforementioned weather. No matter how well the work was covered, once ground conditions became too problematic, no amount of tentage could cope with flooded land and Somme-like conditions of access.
Plants cannot be installed into waterfilled pits, turf cannot be laid on slurry soil and joints will not cure in paving projects. Hence projects gradually grind to a halt.
Unfortunately, so do does the cashflow and interim payments become less than enough to cover outgoings. It does not matter how many projects you have on the go at once, the amount of labour and materials will be related to that number and scale of your business.
Businesses of all sizes are not immune to cash flow problems, although some have deeper reserves, and are able to cope with short term problems, the majority of Landscapers have suffered some serious and detrimental traumas caused by the weather during the autumn and early winter.
Consolidating the position
If I was able to wave a magic wand and offer solutions to all problems, I would be a magician or a charlatan politician. Every firm is different. Each has their own outgoings, debts or reserves, materials in store, vehicle costs including insurances, taxes, servicing etc that cannot be postponed but have to be met. Even with no income, outgoings do not cease, and the cost burden grows twenty-four hours a day, seven days a week.
I would suggest that you take a step back from the coal face and examine carefully your situation and try to rationalise your position.
Make a careful inventory of all known costs that must be met. These may include all of your ‘Establishment’ costs e.g. insurances, rent, wages, staff pensions, VAT outstanding, heating, lighting, fuel, bank charges and interest. Extrapolate that figure over three months (until the weather improves!) and arrive at a total figure. These are your costs that must be met irrespective of any income.
You should include all of your own living costs, as these too will have to be met.
Then examine all of the work you have contracted to carry out. Undertake a similar exercise only this time, listing all of the outstanding amounts of money and the relative position in the works programme they may fall. By this I mean assess how much money is left on each stage of the project, after payments already received are removed.
For example, paving works are 100 metres @ £150.00 per metre. Original contract price was £15,000.00. You have been paid £10,000.00 already, leaving £5,000.00 on the job (ignore VAT for the sake of this exercise). The project is complete except for pointing, which will cost £2,000.00 leaving a ‘credit’ on completion of the project of £3,000.00.
Continue scheduling all elements of the scheme, listing each item as a separate project. In this way you can highlight how much money there is left on the job, at the time of writing.
Show the outstanding projects as individuals, with a total amount of work COMPLETED against the amount of work already completed and paid for, thereby highlighting an amount of money that will become payable against that item once it has been completed, and not as part of the overall scheme. (Not as a percentage of a scheme, but a factual figure)
Carry out the same exercise across all of your projects, and arrive at a mini work programme showing the amount of work to be completed and once it has been finished, the amount of income that completion will furnish.
In legal terms, this is known as Quantum muriet (as much as it is worth) which is an exercise that is carried out once a project has fallen into the net of a dispute issue, where an Expert Witness is called in to evaluate the works at the time of valuation, usually after a job has been terminated prematurely. Only in this case, it is essential to understand how much value to your business the non-completed works is to provide you with cashflow.
Assessing your assets.
Once you have arrived at your status quo – how much work there is to do to complete a particular element of a project – and discovered how much money may be payable with agreement with your client – you should find that you have a decent reservoir of money that will become available once those individual items have been completed.
The next step is crucial. You will have to be honest and open with your customers, advising them clearly that you are in need of funds, and gain their agreement to settle these amounts once that particular job has been finished, irrespective of your main Contract Terms. You need this money to survive the current weather disasters, and ask for their help. They will not wish to see you in difficulty I am sure!
By adopting this technique, you can concentrate on completing PARTS of projects, and collecting income from each one as a mini-contract. You can move from site to site, choosing whichever job suits the weather at the time (ice, frost, snow and rain) and employing your team/s to projects and specific sites for the duration of that part project. Once the weather improves, you can move back to site and complete in the normal manner.
Your clients will see progress, and you will see income!
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