'The key to managing a service company is to know your costs,' says Mitch Rolsky. So he wrote software to tell him just what those costs are
Problem: Pricing jobs accurately
Solution: A customizable software package with a relational database
Payoff: Lower prices and increased profits
Fourteen years ago, long before computers were common in the landscaping industry, Indianapolis-based Pro Care Horticultural Services bought its first computer. Job costing for the landscape-architecture company had become so labor intensive that it demanded a dedicated full-time employee. With little prepackaged software to choose from, Mitch Rolsky, then vice-president of the tiny, family-owned business, brought in a consultant to write a job-costing and accounting package. After four days Rolsky decided his money would be better spent on his learning computers than on his trying to teach the consultant landscaping.
So for the next three days the consultant gave the computer neophyte Rolsky a crash course in computer programming. Then Rolsky wrote and put into use his own job-costing and accounting software. After a four-month transition period, about half the job-costing/accounting employee's time was freed for other projects. Rolsky estimates he has invested a few thousand dollars' worth of his time each year in upgrading the software.
Job costing had become crucial to Pro Care, because over the past 10 years the company's customers had stopped accepting bids for one big package of services and had begun demanding a menu from which to order. Pro Care had to pinpoint each cost, Rolsky says, and the new system makes that much easier. "No matter which service customers pull out, I'm profitable."
Using a database of previous jobs as a guideline, Pro Care establishes a budget before bidding on a job (such as the mowing, weeding, and mulching of a commercial building's surrounding grounds). Once that job is done, its costs are entered into the database, and Rolsky calculates his expenses and his profit. To boost margins when that customer calls for repeat service, Rolsky may send fewer workers or schedule a complementary job nearby. By tracking costs, Pro Care has lowered prices and increased profits on its current sales of $1.5 million.
When his father promoted him to company president, in 1989, Rolsky searched for new software that would mirror the functions of his original program but also allow him to shift maintenance responsibilities onto other shoulders. He settled on a pricey off-the-shelf product from Avista (404-564-8000) that includes a relational database, mainly because it could be customized: employees can create on-screen forms to mimic the paper ones they've been using. Rolsky paid $10,000 for the software (although it can cost anywhere from $5,000 to $75,000). He spent another $20,000 for the hardware to run it, including a dedicated server, additional terminals, and network software. His main objective is to remove himself from daily database management and software support, he says, "which I expect will happen, as long as I remind myself to delegate, since that's why I bought the system."
-- Phaedra Hise