Guide your growth
|By Kyle Brown|
Build your company's expansion on solid finances and a strong team.For many smaller landscape and irrigation contractors, the past season has been another opportunity to take on more work than they could have expected. That influx can be the start of a growth phase for a company, but it’s important to know how to put the right pieces in place to support expansion.
When Josh Wilson, president of Dixie Lawn and Landscape in Cochran, Georgia, started out cutting grass out of high school, he didn’t give much thought to the sustainability of the business or how it could grow. He remembers reading stories in industry publications when he was in college about green industry companies that had expanded to take on huge amounts of business.
“There would be a picture of a company that’s got 20 trucks, and I’d think, ‘Oh man, is this something that could happen?’ That’s kind of what got the vision rolling for me,” he says.
Seasonal Solutions in Overland Park, Kansas, began as an all-inclusive landscape grounds maintenance company covering mostly residential properties while trying to break into commercial. “It was the typical story of how landscape companies get started, with just a guy in a truck,” says Barry Wolff, president. “We soon discovered that we were far too spread out and were trying to do too many things for too many different types of people.”
When it finally attracted a few high-profile accounts on the commercial side that enhanced the company’s portfolio, it was a spark that started a drive for expansion, he says. “It gave us some bragging rights and some legitimacy in the market as a real business that could handle the tough stuff.”
It can be difficult to recognize the indicators that your company is ready to do some growth, but a major one for Wilson is taking note of how many responsibilities you’re currently covering. “I was wearing a lot of hats. I did everything,” he says. “I had probably six crews at the time, but I was the sales guy. I was the operations manager.”
After pushing for a while to keep up with the workload, Wilson realized that he was clearing enough to support an office staff when he was netting upwards of 15% to 20%.
“That’s what one of the biggest indicators was for me, that I was netting enough money to afford some freedoms,” he says.
As a company pushes through the $1 million to $2 million mark, it can be tough to move on from that point because of the familiarity of the sense of control in handling everything yourself. “I think it’s a big struggle for some,” Wilson says. “It can be a very difficult place to be.” If a contractor is the main driver of the company and still isn’t making enough to hire a staff to support growth, “you need to make sure that your price is correct.”
Choose your focus
CDI Environmental Contractor, Sedalia, Colorado, was originally founded as an erosion control company, with landscape and maintenance more as an afterthought. Though the company had been expanding into other services, it faced a rough year in 2018.
“We had a few service offerings that we ended up cutting to get back to basics,” says Zacc Wair, vice president and chief operating officer. Because it had reduced the overall number of services, CDI focused more on a few key services, such as landscape work.
One of Wair’s favorite sayings is, “Not every opportunity is a good opportunity.” It can be easy to continue taking more varied or secondary projects as your clients request them, especially if they already like your work in another area. “But that doesn’t mean that you’re going to be good at it.”
Wair and his team looked hard at which services the company excelled in and brought in the most revenue. They also considered opportunity cost, determining how expensive it was to be able to offer a particular service. “For landscaping, the barrier to entry isn’t very big,” he says. His regional landscaping market also wasn’t oversaturated, so there would be room to grow in the future.
At the start, residential business was a necessity for Wolff ’s team to build the company and generate the revenue to hire good employees and buy equipment. “But ultimately our passion is in commercial real estate and the people who own and manage commercial real estate. That’s what we love to do,” he says.
Instead of developing both the residential and commercial side of the market equally, Seasonal Solutions has reduced the number of residential customers over the past several years until finally closing that door completely. The company has always had a practice of looking at and possibly cutting the lowest 20% of its client base each year based on low profits and high difficulty. “So we started weaning residential people off year after year as well,” Wolff says. “Finally, we felt like we had gained enough of a reputation and enough business on the commercial side to replace all of that residential business.”
While it’s tough to turn down the possibility for work, one of the main parts of a growth strategy is narrowing a company’s focus to what it does well. “We’ve decided to be as good as we can, and as focused as we can, on that market,” Wolff says. “It is paying off in dividends. We’re growing exceptionally fast.” Though it was a little intimidating to remove the rest of the company’s residential customers, its growth rate is at 14% this year.
Tightening the number of offered services and choosing a specific market allows the company to make the most efficient use of outreach efforts, he says. Rather than advertising to a wide set of potential customers or an overall region, his team can target and market in a way to build relationships that can drive company expansion. Management has been able to spend more time on-site connecting with commercial clients and finding openings to sell enhancement services.
It’s also provided a new way to build the company’s brand to set it apart from competitors. “We consider ourselves a premier commercial grounds maintenance company in our market,” says Wolff. “We feel that our job is to arm our property managers with a whole toolbox full of ideas and things they can do to their properties to make them perform better to raise rents and increase occupancy levels.”
Make sure you’ve got a sustainable amount of work coming in to support your growth through the process. Even aiming for a moderate level of expansion, it’s important to understand exactly how much your current business brings in per job and what it costs you to provide those services. Without a solid grasp of your profit and losses, any expansion will be a struggle. “Growth costs money, so make sure you’ve got enough held back to maintain the business too,” says Wilson.
Build your teams
Zeppa’s Lawn and Landscape in Louisville, Kentucky, has been expanding since it started, but for most of that time without direction or goal in mind. “We were just growing and growing, but it wasn’t really structured growth,” says Antonio Zeppa, president. “Now we’ve put a lot of systems and processes in place to grow more strategically.”
He developed a management team to give his company’s expansion an overall plan to follow and weigh future opportunities.
“You’ve got to put those people in place first,” Zeppa says. “It’s not just laborers or the frontline workers. It’s all the way through. You’ve got to be able to manage those people.”
For a smaller company, an office manager might be the place to start, Zeppa says. Making sure the employees are in place before pushing for heavy growth will help prevent overextension and encourages the team to develop good business practices from the start. Getting the right hire can take some trial and error, but the right person will find efficiencies and streamline processes, allowing you to focus on expansion.
Hiring even one support position can make an enormous difference, whether that is on the operations or sales side, Wilson says. Take some time to judge your own skill set and determine where your time is best used for the development of your business, and then hire for the responsibilities that you can’t cover as well. “I brought on an operations guy and realized I had some time to really work on my business now. When you’re wearing 12 hats and suddenly it goes down to four, that’s a huge deal.”
Even more important than finding a key employee is developing a solid company culture to protect the hires you’ve already made, he says.
“Going into the next two to three years, you’d better focus on culture 100%,” Wilson says. “It doesn’t matter where anything else is at, if you don’t focus on that, labor is going to be very frustrating.”
Company culture has been a major focus for Wolff ’s team, including developing a mission statement and value statement that show a dedication to the job and the employees. “We’re trying to build a charged, fun, team atmosphere within the company with frequent, open communication,” he says. “We throw parties. We have training and safety meetings in the morning, and the management team and myself are cooking flapjacks and sausages for everyone at 6 in the morning.”
The idea is to keep crews energized and encouraged to think of themselves as part of a high-performing team, one that doesn’t just mow lawns but also thinks about how to improve a property overall.
“It’s created a place where people like to go to work and has created an enthusiasm about that work,” Wolff says. “That enthusiasm has driven a higher quality job. That’s been contagious to the client. When we’re excited about their property and their landscaping, they’re excited.”
Part of that culture has been an additional focus on training, as well as crosstraining employees for different positions, says Wolff. While having skill overlap across crews has helped in covering extra projects, it also gives employees a path forward in developing the daily job into a fuller career. That encourages them to keep showing up every day and looking for ways to advance.
Wilson uses incentives and recognition to help keep his team moving in the right direction. “I try to be like the sideline at a football game,” he says. “I pat them on the back when they’re doing a good job.”
Building the right team to drive CDI’s growth took a lot of legwork by Wair, who searched for local talent both in the general population and from competitors.
“I spent the last two and a half years really cultivating and identifying the best talent in the market,” he says.
He wasn’t just focused on crew members and supervisors but looked to upgrade the company’s personnel in accounting, human resources and safety as well. “We had a pretty good program already in place,” he says.
“We just had to plug the right person into that spot.”
One of the more useful connections Zeppa has made a priority in building out his company is a consultant. Through his development, he’s working with Fred Haskett of TrueWinds to find the right efficiencies and build an overall strategy. “It would be really hard to do this on my own,” he says. Working with a consultant has been helpful in charting reasonable goals and milestones and building an understanding of what key positions in the company need to be expanded.
Know your limits
Wair relies on his teams to tell him when the company is at capacity for new work, as he trusts their drive and capabilities. “Our whole team is made of a bunch of ‘Get it done’ guys, so as I got pushback from them on workload, that’s when I knew we had enough,” he says.
Once you do reach those limits, it’s important to be able to say no. “If you don’t have the infrastructure to support growth or the systems or people, you can tarnish your name,” Wair says.
Zeppa uses tools like consultation fees to help his team manage the work they’re taking on. “We’ve tried to be more selective,” he says. His company donates money collected from consultation fees to a charity. On top of being a generous move, it develops the company’s reputation in the community and encourages its culture among employees.
Though some landscape contractors use it as a way to try to get additional work, Zeppa doesn’t do design projects for free. “We find that there’s a lot of value in design,” he says.
Managing overextension is a constant challenge during expansion, felt primarily through tight labor markets. That’s where a strong company culture that prioritizes making employees feel as though they belong and are a part of the success can be a lifesaver, says Wolff.
“Our people are very excited that we’ve got a specific brand and that we’re in a growth mode,” he says. When a new job or contract is picked up, news gets shared quickly around the company to celebrate. “Everybody has bought into that. There’s just a lot of excitement, because that means we’re growing.”
The author is the editor-in-chief of Irrigation & Green Industry and can be reached at email@example.com.