To maintain profitability as a mulch producer, you need to carefully track all expenses and keep your costs in check. Most producers have a good handle on fiber and transportation costs. But despite best efforts, there are some costs that often go overlooked by some mulch producers. Here's a look at some of the hidden costs associated with running a mulch yard as well as some tips for how to reduce them.
If you’re going to produce colored mulch, you’re going to be using a significant amount of water, and that comes with a price. While seeing this line item in the budget may come as no surprise, you may not realize just how much money you could be wasting unnecessarily. When coloring mulch, it’s critical you make sure your coloring system is calibrated correctly so you are using the least amount of water possible to still achieve your desired coloration. If not, you are not only throwing money away on water, but you could also end up with increased production costs (namely labor, transportation and time) as you create a heavier product that takes longer to dry and may need to be colored more than once.
Inevitably, you’re going to lose some product — whether it’s due to mold, decomposition, freezing or even fire. It happens to even the best producers. The key then is to try to limit product loss as much as possible so you don’t have to eat the associated costs. Make sure you’re treating your mulch for mold and fungus, turning piles regularly to avoid the worst of decomposition and coloring only when appropriate to avoid washing of colorant.
More mulch producers are switching to inventory systems that use imaging or lasers to measure the quantity of mulch in bulk piles. While these types of systems obviously cost money, not having to walk each windrow with a walking wheel and yard stick and then calculate inventory by hand can save you money on your labor costs. As you look for ways to improve your operation, consider the cost of technology solutions and the potential savings they may be able to provide.
Any business is open to litigation, and mulch producers are no exception. Employees and customers getting hurt on site, contract disagreements and any other sort of problem can all lead to a court battle. But there are some issues unique to mulch producers that you need to be aware of. For example, if you were to sell a batch of mulch that contained artillery fungus that then caused damage to someone’s property, you could open yourself up to lawsuits. That doesn’t necessarily mean you’d actually be liable to pay damages. But any time you head to court, it’s going to cost you money. To avoid these kinds of issues, use premium mulch colorant that has mold and fungus prevention additives built in to keep customers happy.
Insurance is one of those necessary evils to make sure your operation stays protected. But as your business grows, be prepared for your insurance costs to grow as well. The more pieces of equipment you add to your operation and the more workers you have on site, the more your insurance premiums may increase. Consider shopping around to get the best possible rate for your needs and be sure to factor insurance costs into your budget projections when considering any expansion effort.
Want to produce a colored mulch product that’s not only higher quality but also more cost-effective? Contact ChromaScape today to learn how our premium mulch colorant could save you money over the long-term.