Lawn & Landscape
Agility is key to improving performance
Departments - Words of Wilson
December 7, 2020
Words of Wilson features a rotating panel of consultants from Bruce Wilson & Company, a landscape consulting firm.
2020 taught us that no matter how fast we move, business, unlike NASCAR, is not just a series of predictable left turns, but instead a track with multiple twists and turns like an Indy car event. Success demands not only speed, but agility – an ability to navigate the changing landscape at record speed without losing control and crashing.
Quickly adjusting the way we deliver services and overcome unforeseen hazards – whether a global pandemic, economic downturn or disaster – while maintaining critical momentum, gives us the inside track over less flexible competitors, allowing us to survive and, in some cases, thrive despite unexpected hardship.
What does an agile company look like and what sets it apart from others that appear, on the surface, just like it in terms of service offerings, people and equipment? These race tips will help you smoothly navigate those unseen hairpin turns that may derail less agile competitors.
1. Produce an operating budget and stay informed on the state of the world.
Get input from your team on the budget so that they own it with you, and then don’t just stick it in a drawer or in a binder on a shelf. Refer to it religiously; make it a part of your monthly financial review, updated regularly to reflect the constantly changing business environment. Agile companies are always looking ahead, adjusting their operating budgets and business plan based on a real-time understanding of the economy and markets. Regularly reviewing trusted business periodicals can help prepare you to spot trends requiring quick action long before they become an issue.
2. Lose the paper.
Paper requires time to handle. Before hitting the print button, ask: Is this piece of paper critical? How will it benefit my customer or my employee? Can the information it contains be shared or stored differently? Consider collaborative platforms, such as Google or Teams, or digital formats. Don’t push print just because it has always been done that way. Agile companies work in the cloud and make information broadly and easily accessible to those that need it without the need to generate, handle and file mounds of paper.
3. Develop consistent, streamlined processes, procedures and job descriptions.
Good processes cut down on ambiguity and specializing job duties, where practical, allows for greater accountability, control and proficiency. Agile companies have a deeper understanding of how to do the job well, cutting out unnecessary steps and bottlenecks which cause delays. Need a starting point? Gather your team together and list the processes they spend the most time on daily, weekly or monthly. Prioritize the list and brainstorm ways to shorten and improve the process for the most critical tasks. Document the procedures and update them as necessary.
4. Fully utilize systems to get up-to-date, meaningful data and reports.
Less is more – a management dashboard that distills many different operating reports into just the critical, need-to-know information used to make timely business decisions is paramount to avoiding “paralysis by analysis” syndrome. Agile companies react to rapidly changing or unexpected market conditions and make important operating decisions faster than their competition.
5. Create high-functioning teams unconstrained by location or function.
Cross-functional collaboration is critical to innovation and improved performance. Working together in harmony – like a finely tuned pit crew – ensures we can deliver and meet unseen demands customers may place on us. Agile companies communicate a clear sense of purpose and hold each other accountable across multiple segments and divisions, creating a culture of continuous improvement and greater levels of commitment.
If implementing change within your organization feels like making a U-turn in a semi, it’s an opportunity for your teams to learn to turn on a dime. Gather your team together, pick one of these tips and start tearing down the walls. I bet you will discover an agile race car ready to take the checkered flag.
Contact Steve Steele at firstname.lastname@example.org
December 7, 2020
Whenever you have to preface a statement with “all things considered,” there’s a good chance that statement is not an expression of overwhelming satisfaction.
Fortunately, for the industry, a lot of companies had banner years from what we’ve been told. And that’s not considering all things – that’s based off what they budgeted before things went sideways. Even if it wasn’t a record year, or even above average, there were lessons learned and positive changes made.
Brian Horn, editor, Lawn & Landscape
Recently, we conducted our 2020 State of the Industry webinar where I hosted a panel with Laurie Broccolo, CEO of Broccolo Tree & Lawn Care, Justin Crocker, CEO of EarthTones Design and Maurice Dowell, president of Dowco Enterprises.
We talked about the chaos of 2020, along with some non-chaotic moments of the year, and what to expect in 2021. Here are a few takeaways from the panel. You can view it by entering bit.ly/2020lawnsoi into your web browser.
Communication in tough times.
When shutdowns began, Crocker’s first step was to assess the financials and communicate to employees where the company stood. While his company was on solid footing, it’s a reminder to stay in touch with employees in good times, but especially when there is uneasiness.
More ways to pay.
With cash flow a concern, Dowell said he created multiple payment options for customers. Customers could prepay and get a 3% discount, sign a contract from January until August and get billed monthly, or keep a credit card on file and have it charged a day after services were provided.
“Even if it wasn’t a record year, or even above average, there were lessons learned and positive changes made.”
No other choice.
For years, Broccolo wanted crews to meet at the jobsite, but foremen couldn’t get organized enough the night before. Once COVID-19 set in, the crews had no choice. “We mandated that everybody meet at the job and we saved hundreds of hours,” she said.
New labor and landscapers.
With so many people out of work, the initial thinking was that it would increase the labor pool as well as the amount of “mow and blow” contractors. Dowell and Broccolo both found an employee from the hospitality industry, while Broccolo noticed more contractors without company names mowing lawns.
Since her company doesn’t mow, she wanted to work with some of them. “If it looks like they have the right character and presence about them, we are approaching them to have them work with us for edging and mulching and pruning for next year,” she said. – Brian Horn
December 7, 2020
Travels with Jim follows Jim Huston around the country as he visits with landscapers and helps them understand their numbers to make smarter decisions.
I want to show you how to combine the machine cost with the cost of an operator, and how you might market this combination to your clients. The total cost per hour (TCPH) for a skid-steer in this example is $40. Editor’s Note: You can see the worksheets for these scenarios by visiting bit.ly/lawnwebextras .
How it works in the field.
First, we calculate how much to charge for a day for this package (see my MS Excel worksheet “180.0 skid-steer with operator” ). The costs for this scenario are as follows:
The operator makes $25 an hour and works a 10-man-hour day and a 50-man-hour week.
Overtime adds 10% to this figure or $2.50.
We apply a 10% risk factor to the hourly rate or another $2.50.
Total cost per man-hour is $30 (30 + 2.50 + 2.50).
Labor burden (FICA, FUTA, SUTA, payroll taxes, insurances for workers’ compensation and liability, paid time off, etc.) adds 25% to this cost or $7.50.
The F-350 truck to haul the machine costs $15 per hour or $120 per day.
The general and administrative (G&A) overhead cost per man-hour is $18-. We use a unit cost per man-hour of $18 because applying G&A overhead as a percent isn’t as accurate.
We desire a 20% net profit margin (NPM) for this package. A 20% margin is equivalent to a 25% markup. You calculate the 20% margin by dividing the break-even point (BEP) by one minus the desired NPM (1 - .20 = .8).
Next, we add up all of the costs:
8 MHrs on site + 2 MHrs mobilization @ $30 per man-hour totals: $300
To this we add the 25% labor burden or $7.50 per man-hour: $75
8 hours of machine time @ $40 per hour totals: $320
8 hours of truck time @ $15 per hour totals: $120
The total direct costs (TDC) are: $815
Next, we add the G&A overhead cost at $18 per man-hour: $180
This gives us our BEP: $995
We then add a 20% margin to the BEP ($995 ÷ (1.0 - .2)) = ($995 ÷ .8) = $249 (To achieve your 20% NPM you could also multiply the BEP by .25)
Our price to our customer is calculated to be: $1,244
I’d round this up to a day rate of $1,250 per day
Marketing equipment costs to your customer.
To achieve your 20% net profit margin, you would want to charge $1,250 for such a day. For jobs of shorter duration, you could charge $125 per hour ($1,250 ÷ 10) to include on-site and mobilization time, a percent of the day by the daily rate (.5 x $1,250 = $625) or a mobilization charge plus an hourly rate for any hours worked on site. I prefer the hourly rate for hours worked on site added to the mobilization rate. It would work out as follows:
In our scenario, it takes roughly two man-hours to mobilize the machine to and from the jobsite with the F-350 truck. With G&A overhead and a 20% NPM, this charge would be roughly $176. ( See the MS Excel worksheet “180.0 Skid steer with operator (mobilization charge” ). I’d round this up to $180.
The on-site machine and operator time with G&A overhead and 20% NPM costs out to be roughly $138.13 per hour ( See the MS Excel worksheet “180.0 Skid steer with operator hourly rate.xls” ) I’d round this up to $140 per hour.
Our 10-hour day costs out as follows:
$140.00 per hour x 8 hours: $1,120
Add to this the mobilization charge: $180
The total for the day is $1,300
You would charge the hourly rate plus the mobilization charge for jobs of shorter duration. For instance:
Two hours on site would price out to: $180 + (2 x 140) = $180 + 280 = $460
Four hours on site (a half-day) would price out to: $180 + (4 x 140) = $180 = 560 =$740
Charging customers a mobilization fee plus an hourly rate for any hours used is an easy way to market such a package. The key is to understand how to calculate both charges in order to cover your G&A overhead costs and to achieve your net profit margin goal.
Contact Jim Huston at email@example.com
What’s trust got to do with it?
Departments - Cream of the Crop
December 7, 2020
Cream of the Crop features a rotating panel from the Harvest Group, a landscape business consulting company.
Imagine how difficult it would be to proceed through an acquisition with someone you didn’t trust. Every step of the way, both parties must have confidence that they are sharing information with a trustworthy person or entity. With current limitations on travel to “in-person” meetings, I continue to hear how much more difficult it is to build a trusting relationship.
I believe a key missing component is that all-important body language. Body language has been found to convey 55% of a person’s meaning. It’s no wonder that we miss our ability to deal with each other in person.
Fortunately, buyers, sellers and their advisers have Zoom and other technology tools that allow us to meet “in person” virtually. There will always be a need for at least one actual “in person” visit for the buyer to meet the owner and see the seller’s facilities and tour select client properties. The good news is that the balance of work that might previously have been done in on-site meetings can be done via videoconferencing. Here are some critical times in the process when you want to be able to have trust in a deal:
Exploring your options.
You decide to explore your options — you may or may not sell your company, but you don’t want to sound the alarm by having word get out in your community, especially your employees and clients. Choose an adviser that you trust.
Showing your company information to buyers.
Before you share any of your company information with potential buyers, your adviser will collect a signed Confidentiality and Nondisclosure Agreement (NDA). In this document, the prospective buyer agrees to not use your information against you. It helps if you and your adviser have a good sense for the buyer who will receive the information. You don’t want to release information to potential buyers you don’t trust.
Sharing basic information with potential buyers.
After the NDA is signed, you will share certain “big picture” elements of information about your company including your company name, gross margin, number and type of clients (no names), organization chart (no names), etc. This allows the buyer to decide if your company is a potential fit with their needs. If they are interested, there will probably be an additional exchange of information and even a conference call and/or meeting.
Signing a letter of intent.
The buyer has enough interest to make an offer on a preliminary basis with conditions. At this stage, it’s customary for the buyer to include a “no shop” provision where you agree to discontinue the buyer search while this buyer proceeds with due diligence toward closing. This may last for 90 days or closing.
Entering due diligence.
With a signed Letter of Intent (LOI), every detail about the business including past years and future projections for performance, clients, employees, risk profile, etc., will be scrutinized.
Purchase agreement and ancillary document negotiations.
While the due diligence is proceeding, the attorneys will draft the documents to outline all the terms of the deal. There is a level of negotiation required at this stage, mostly related to how risk will be allocated between parties for prior actions and how future issues will be handled. A seller who does not have trust in their buyer relationship can feel vulnerable at this stage. Sellers who trust the buyer can cut through any sticky issues and resolve them in good faith.
Team meetings and integration planning.
During the transition planning phase, more connections are made between the companies to enact the change. Accounting and finance, IT and HR teams will be preparing for the announcement. Executives will be drafting communication pieces and strategy. Hopefully, the relationship has been built between leaders and those individuals will continue to build the trust across the rest of the company.
The bottom line is that trust is an essential part of any relationship between people. When it comes to buying and selling companies, trust can make or break a deal.
Contact Alison Hoffman at Harvest@giemedia.com
Dress for success
Features - Cover Story
Whether you view them as a necessity or an accessory, uniforms transform how people view your company and the industry.
“I believe when you look good, you feel good, you act good,” says Tony Nasrallah, owner of Ground Works Land Design in Cleveland, Ohio.
All photos: © Mal McCrea
Dressing up was never a problem for Tony Nasrallah.
From a full suit for Sunday church to the ties he wore for every school picture between kindergarten and high school, Nasrallah says he saw the value in looking good early on in life. So, when he started his company, Ground Works Land Design, in 2009, he immediately implemented uniforms that have evolved from a basic T-shirt to slick polos and button-down shirts.
When he brings new potential hires into his office in Cleveland, Nasrallah stresses the importance of a first impression. Fair or not, he says people follow the cliché of judging books by their covers — and those impressions stick for time to come.
“Years later, I’d see teachers who said I looked sharp wearing my shirt and ties,” he says. “I believe when you look good, you feel good, you act good.”
Today, Ground Works doesn’t simply hand its employees a T-shirt and call it a day with their uniforms: Their set of apparel is sophisticated, as they have partnerships with L.L. Bean and Adidas and have uniforms with primary and secondary colors. They even design T-shirts with local artists for employees to wear on weekends or when they’re off the clock, or for big company events like their annual cookout.
“We’ve always kind of approached the industry with a different eye,” said Joseph Stark, the company’s marketing director. “Tony wasn’t grandfathered into the industry or anything like that, so he had no preexisting ideas of a red truck landscaping perception or anything like that, so we were able to do it our own way.”
Tony Nasrallah and Joseph Stark (pictured above) have prioritized uniforms at Ground Works Land Design, which they both say has helped them land desirable clients.
BUCKING THE TREND.
Nasrallah says Ground Works aims for clients who will pay big money for landscaping, so it’s important to dress the part. Showing up in ratty T-shirts and ripped jeans to bid on jobs won’t get you any work, he says. He also says landscapers are not only bidding against other companies in the industry, but the industry stigmas themselves. There’s this prevailing idea that landscaping is a dirty job done by slobs, he says, and he wants to help buck that trend.
“I want to bring class to this industry. People look down on landscapers,” he says. “When you go to high-end restaurants, people are wearing bow ties. Those are the type of clients that we want. We want people who are going to appreciate and respect landscapers who are dressed well.”
To pull it off, the Ground Works team budgeted somewhere between $10,000 and $12,000 for new uniforms. Stark admits the investment is large, but he says they’ve valued the uniforms greatly enough to justify the expenditure.
Bill Smith, a branch manager at Grassmaster Plus in Massachusetts, acknowledges landscaping is a dirty job. They provide their employees six T-shirts on rotation, so they have a clean shirt to wear each day they work, while giving them the opportunity to wash the clothes on Sundays. In total, it costs them about $2,000 annually.
“You open up your closet and you see your work stuff and the stuff you’re going to wear on the weekend. Why can’t we intersect the two things and be really proud of (your company)?”
Joseph Stark, marketing director, Ground Works Land Design
“It’s not a business that you stay clean in, but if you start the day clean… the attitude of the technician is better,” he says. “They identify with the colors, with the uniform itself. And customers have a higher comfort level because they see the truck pull up and the guy get out in full uniform as opposed to the ripped jeans, the hood up, etc.”
Smith estimates Grassmaster does 80% commercial work, so he also reiterates the importance of appearance. In some cases, they actually need to follow state guidelines with their uniforms, as technicians handling chemicals need to wear long sleeves. They wear a moisture-wicking pullover with the logo placed on the breast and on the back, plus some dark green hoodies with the logo on the front and back as well.
When his employees show up for work in the morning, Smith says there’s “definitely a look” he gives them, glancing over each to ensure the uniform is straightened out and looks sharp.
“I look at every employee as they come in,” he says. “They’re not allowed to go out without a belt. They have to have the hat on straight forward. There’s no cutting sleeves or opening up the necklines. (The uniform) has to be as given to them.”
For Smith, it all ties into Nasrallah’s principle belief: If you feel good, you’ll act good, which means the clients will pay good. This year, the average project earned $160,000 at Ground Works, and Nasrallah says part of it had to do with the company’s appearance.
“We want people to look at us as professionals, treat us like professionals and pay us like professionals,” Nasrallah says.
A SEAMLESS START.
Rachel Kukhahn has owned her company, Premier Landcare in the state of Washington, for just over two years, but at previous companies, uniforms were important there, too. She doesn’t want any clients wondering who’s creeping around on their porch or standing in their yards – uniforms bring a sense of identity for the employees.
“I like the clean look of it,” she says. “I like that all of my guys are identifiable on site.”
Kukhahn says she’s a small enough company that she can afford to pay for all of her team’s uniforms, which includes five shirts, five pairs of pants, a hat and a coat. Meanwhile, Nasrallah provides all of their team’s uniforms as well, and he says it costs more to recruit and retain employees than it would be buying uniforms, so he wants to keep all of his roughly 25 employees happy. Smith says he purchases all but the pants for the employees.
“It’s not a business that you stay clean in, but if you start the day clean… the attitude of the technician is better.”
Bill Smith, branch manager, Grassmaster Plus in Massachusetts
Smith adds that he understands why some companies have their employees purchase their own uniforms – it can bring an emphasis on keeping those uniforms spotless, for example. But he wants to ensure starting at his company is as seamless as possible.
“It’s no money out of their pocket. A lot of times when we get a new hire and they’re starting on the entry level, they may not have the cash to go out and buy something that we’re pretty much dictating what they’re going to be able to get,” Smith says. “It takes some pressure off of them. They view it as a benefit.”
Replacing the uniforms is something else employers need to consider, as the uniforms go through plenty of wear and tear out in the field. Smith says it’s pretty common that he’ll walk past an employee, take off his beat-up, worn hat, and hand him a new one. Kukhahn says even sun exposure is something to consider, as she replaces a T-shirt or two each year from each employee because the sun washes out their “Seahawks-ish” colors of dark blue and green.
But she doesn’t let ripping uniforms become a reason why employees don’t wear them. She says she’s had to talk with her employees several times over the last two years about making sure the uniform looks good before they head out into the field.
“Trying to enforce the uniform is a challenge at times as well,” Kukhahn says. “I’ve heard a lot of excuses as to why they didn’t wear their uniforms, like the buttons fell off all of his pants, or the seams ripped out of all of his pants. It just gets creative. You name it, it’s been used.”
TAKING IT PERSONALLY.
Stark says uniforms have always been important at Ground Works, but now that they’ve implemented the marketing department, they can make it a focus. He’s been on the staff for less than a year, but he’s noticed in previous pictures that the company has made uniforms a “walking advertisement” for several years prior.
“You open up your closet and you see your work stuff and the stuff you’re going to wear on the weekend,” he says. “Why can’t we intersect the two things and be really proud of (your company)? It comes from this idea of blending work and play.”
Nasrallah says uniforms matter so much to him and the Ground Works team because they take it personally – in a good way.
“They’re representing Ground Works when they’re out there, and their representation is a reflection of who I am and the company culture,” Nasrallah says.
For Smith, uniforms are also about having his team buy in to the company culture. It’s somewhat like an athlete wearing his or her team’s uniform for the first time: Though it’s probably a little less exciting than that, it is fulfilling, especially when the employees are proud to don that company apparel.
“I think when we present that as part of our interview that we supply the uniforms, there’s not a big reaction at the interview process,” Smith says. “Once they’re in and we hand them their uniforms though, it just makes you feel like you’re part of the team.”