By Karrie Jackson, CEO and Cofounder, Evermore Accounting & Coaching

Every February I get a version of the same phone call. A landscaper, four or five months past his last good invoice, asking whether he should take a line of credit or sell a truck.

And every February I think the same thing, which I try to say kindly. The decision that created this was made in July, not February.

Seasonal businesses do not have a winter problem. They have a summer problem that shows up in winter.

Know your winter number before you need it

Most landscapers I work with cannot tell me what their business costs to keep alive in a month with no revenue. That is the first number to find, and it is not complicated.

Add up everything that keeps happening whether the mowers run or not:

• Equipment and truck payments
• Insurance, all of it
• Shop or yard rent
• Any salaried or year-round people you intend to keep
• Software, phones, utilities
• Loan payments
• Your own household draw, which is the line people leave off and should not

Call that your monthly burn. Multiply by the number of lean months you genuinely have. In most Ohio that is roughly December through March, so four months, adjusted for whatever snow revenue you actually earn rather than the snow revenue you hope for.

That product is your winter number. For a lot of the crews I work with it lands somewhere between $40,000 and $90,000. It is usually larger than the owner guessed, and seeing it written down is the moment the whole conversation changes.

Set it aside as you earn it, not at the end

Here is where discipline lives.

The instinct is to save what is left at the end of the season. That never works, because by the end of the season there is nothing left. The money went to a used skid steer in September, or to catch up on something, or it just went.

Instead, take a fixed percentage off every deposit during the season and move it, the same day, into a separate account you do not carry a debit card for.

If your winter number is $60,000 and you collect $500,000 between April and November, that is 12 percent. Round it up to 15 and stop thinking about it. Every deposit, 15 percent moves. No decision to make, no negotiating with yourself in August.

The separate account matters more than people expect. Money in your operating account is money you will spend, because it is sitting there when a decision comes up. Money in an account you must deliberately transfer out of gets a second thought, and the second thought is usually the right one.

Watch out for the December equipment trap

Every year, somewhere around the middle of December, a salesman explains to a landscaper that he should buy a piece of equipment before year end for the tax deduction.

Sometimes that is genuinely smart. Often it is the reason the February phone call happens.

A deduction is not a rebate. Spending $50,000 to save some portion of it in tax still means $50,000 left your business, and it left during the exact months when you have nothing coming in. If the equipment was in the plan and the cash position supports it, fine. If you are buying it because a deduction sounded good, you have traded your winter cushion for a tax benefit you could have gotten later for a purchase you needed.

Ask two questions before any December purchase. Would I buy this in June? And after I write this check, am I still above my winter number?

Snow work is a hedge, not a plan

I want to be careful here because plenty of landscapers run genuinely good snow operations.

But if your winter survival depends on snowfall, you have built your business on weather. Some years that works beautifully. The years it does not, it does not work at all, and those years tend to arrive without warning.

Treat snow revenue as upside on top of a reserve that would have carried you anyway. If a mild winter would break you, the reserve was too small, not the winter too warm.

Seasonal contracts help here. A per push arrangement pays you for the weather. A seasonal contract pays you for being available, which is what you are actually providing.

Price the season, not the month

The other half of this is upstream of the reserve.

Your summer pricing must carry your winter overhead, because your winter is not producing enough to carry itself. If you priced your mowing accounts as though your costs stopped in November, they did not, and the shortfall must come from somewhere.

When you calculate your overhead recovery, use twelve months of overhead spread across the months you actually bill. That produces a higher number per billable hour than most landscapers are using, and it is the honest one.

I have had clients raise their maintenance pricing by eight or ten percent after running this and lose almost no accounts. The customers who left were the ones who were never profitable.

Where to start this week

Write down your winter number. Just that. Twenty minutes with your payment schedule and your insurance bills.

Then open the separate account and decide the percentage before your next deposit clears.

The landscapers who get through February comfortably are almost never the ones who had a better season. They are the ones who decided in April what August's money was for.