How do I check whether a landscaping company’s design-build jobs are profitable in practice?
Pick a sample of finished design-build jobs and compare the original quote with what the job actually cost in labour, materials, equipment time and subcontractors. Look at change orders and rework too. If the company cannot produce job-level costs, treat its stated margins as unproven.
Ask for the complete file on several finished projects, including a mix of large and small ones and some from last season. Each file should hold the quote, the design drawings, supplier invoices, crew time sheets and any change orders. Rebuild the true cost yourself and compare it to what the customer paid.
Pay attention to where the money leaks. Design time is often given away to win a project, crews run over when weather or soil conditions surprise them, and plant replacements under a guarantee come out of the company’s pocket. Ask how those are tracked, and whether anyone reviews a job after it closes.
Then compare design-build with the company’s plain maintenance or installation work. If the owner says the big projects are the profitable ones, the records should show it. Check how much of the work depends on the owner personally designing and selling, because that skill may not transfer. Your accountant can help turn job costs into a margin you can trust. Visit one or two completed gardens if the customers agree. Seeing the finished work shows quality, and whether the design matches what was quoted.
Key takeaways
- Rebuild the cost of several finished jobs from invoices and time sheets.
- Look for free design time, overruns and guarantee work that never reached the books.
- Ask who sells and designs, and whether that person stays.
- Visit finished projects, with permission, to judge the quality of the work.
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Sources
This answer is checked against primary sources. Links were last confirmed on the dates shown.
- 01Business Development Bank of CanadaGovernmentHow to conduct due diligence when buying a business
- 02Business Development Bank of CanadaGovernmentWhat are financial statements?
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