As a business owner, you have a lot on your plate. If you have any employees – or any customers – you have fires to put out every day. Your foreman called in sick, a crew just walked out and, oh, that delivery of shrubs for Mrs. Smith? Turns out they’re on back order and won’t be in for two weeks.
With all that going on, it’s easy to lose sight of the bigger picture – like if your maintenance division is making a profit, or if your marketing (assuming you’re doing it at all) is working.
In a straw poll of Lawn & Landscape readers, a vast majority – 88 percent – said they spend nothing on consultants. In this month’s cover story, we profile companies who have spent money – sometimes a lot of money – on consultants, and examine the return they got on their investment.
Problem: Labor cost
J. Lee Buffington does not live in the past. Honest. He surrounds himself and his employees with technology. His eyes focus every day on the computer screens that wrap around him at his desk like so much foliage stretched across a manicured front lawn. He lives in the present. He lives for the present.
So why does he schedule his crews as far as four months out not on some coded spreadsheet, but on a 40-foot long magnetic board?
“You’d think in this day and time, that everything is electronic,” Buffington says, “and that was part of my reservation in going back to something like this, because it’s a very old-school technique. But everybody in our company understood it within a week.”
Buffington had purchased the board and the corresponding system more than two years before he ever started to use it as the founder and president of Fort Payne, Ala.-based Turf Tamer. But because it was so simple, so elementary, so vintage, he hesitated to hang it on the wall and use it to schedule his nine crews.
That move required Marty Grunder, a business consultant based out of southwest Ohio who provides a variety of services for entrepreneurs and business leaders across the nation. Grunder pointed Buffington in the right direction and showed him how he might use that system more effectively. Buffington says he doesn’t “want to give away too much” of the trade secret, but after less than six months, “it’s almost a flawless system.”
The big board, not nearly as anachronistic as it might appear, is just one of several changes Buffington and Grunder recently implemented for the business. None of the changes were for pressing matters – Buffington says he prefers regular business maintenance, rather than waiting until he has an urgent need to bring in outside perspective – but all have improved the business significantly. Buffington says Turf Tamer is about 28 percent more efficient and productive since July 2009 – and almost twice as efficient and productive since January 2008 – in large thanks to improving crew departure times and procedures, streamlining sales objectives and finally installing the magnetic schedule board.
That’s $140,000 this year alone saved in labor cost.
“I had a vision of where I wanted to go, and I have the drive to get there and the willingness to wait things out and be patient,” Buffington says. “But you expedite the learning curve so much when you bring in a consultant, and if you get a good consultant, they’re going to pay for themselves 10 times over in 24 months.”
Buffington has worked with Grunder since early 2008, a little longer than those aforementioned 24 months, and spends between $10,000 and $12,000 per year for the services of Grunder and other consultants. Has that investment offered a favorable return? Measure the results in efficiency, in productivity, in revenue, and the answer, undoubtedly, Buffington says, is yes. – Matt LaWell
J. Lee Buffington’s old-school scheduling board has helped him save six figures in labor costs. Photo: Kaydee Roden
After having operated his business for about a year – and then discovering it was barely turning a profit – Tim Smith felt like he’d been kicked below the belt.
Wanting to assess the profitability of their Panama City Beach, Fla. business, Smith and his two co-owners hired Ed Laflamme of The Harvest Group to analyze their company’s financials.
“We found all three of us (owners) having to wear every single hat under the sun, and all we did was control the chaos,” Smith said. “We didn’t know why we did things or if we were making money.”
The disappointing answer came during Laflamme’s two-day visit in 2008.
“We were barely, barely being profitable,” Smith recalls. “It felt like I got kicked in the pants because we worked very, very hard.
“For him to lay it out in front of us and say, ‘This is what you’re doing and this is how we can fix this’ – you feel stupid,” Smith says.
Though initially painful, Laflamme’s findings became a tool for change for the budding company.
Following the consultant’s advice, Smith and his partners took a hard look at their costs and realized the prices they charged were inadequate.
They also decided to stop outsourcing their irrigation and chemical application work.
“The company that we were outsourcing to was pulling in all this profit from us,” Smith says. “Now, we are able to have that in-house and make that profit ourselves.”
GreenEarth now reaps a 10 percent profit margin, up from the 1 or 2 percent it realized its first year, he says.
GreenEarth paid The Harvest Group between $3,000 and $5,000 for the visit in 2008 and maintains an annual consulting contract, which costs $5,000 to $7,000.
The price is well worth it, Smith says.
“It’s basically putting you on the fast track to success,” he says. “Instead of doing everything by trial and error, you are hiring folks that have been through it all already. You can use their experience to not go through those costly mistakes.” – Michelle Park
I didn’t approach the consultant because we were looking to fix anything. My business partner, Marc Boggio, and I wanted to grow our marketing so we could grow our sales. Before working with Judy Guido, we relied on word-of-mouth referrals. We knew we needed to become more serious about marketing to grow the company the way we wanted to.
I approached Judy after I heard her speak during a seminar at an annual conference. Our partnership is not past tense; it’s current. We continue to speak every week or so.
What was really interesting was Judy’s analysis of our key personnel. Some employees weren’t sitting on the best seats of the bus, so to speak, so we reassigned roles. If someone doesn’t perform in one job, it doesn’t mean he or she can’t shine in another.
I’ve made changes myself. Since we began working with Judy, I’ve begun to allow people to be better managers by not micromanaging. My company is better for it. I allow people to do what they were hired to do.
Working with Judy has prompted us to use the Internet in ways we never conceived. We built a website. We’re exploring social media now.
Following Judy’s suggestion, we fostered a relationship with NBA Nets basketball. Our involvement with their programs has allowed me to entrench myself in a group of very influential people and has created for us a large network of future prospects. We also have become involved in community service projects, such as visiting inner-city schools, which double as marketing.
Find a consultant who’s compatible with you.
The return on the investment is there. We pay more than $10,000 a year in consulting fees, and that costs a fraction of what we would pay to hire someone with Judy’s expertise full time. It’s like having a chief marketing officer within our organization.
We’re achieving our goals. Our marketing is working. Because our marketing is working, our sales are improving and we’re happy. – as told to Michelle Park
Since the company was founded more than 25 years ago, Vila & Son had focused on landscape construction. But five years ago, Rick Leal, president of the Miami-based company wanted to diversify and grow his maintenance division.
But those two businesses, it seems, are very different, not only in the actual work, but in the systems it takes to manage them.
With the first, you focus on gross profit margin and, with the other, on revenue per hour. So Leal brought in consultant Frank Ross to help him figure it out.
Ross focused on the financial side of Vila’s business, revamping its estimating models for construction and maintenance work. These predictions tie directly to the company’s budget – and its bottom line. He also set up systems to track and evaluate the division’s performance.
“We didn’t have a lot of systems, particularly for our maintenance side of the business. We still thought of maintenance with a construction mentality, which is a lot of costs, labor, equipment etc.,” Leal says.
Now, he and his team focus on budgeting the correct number of labor hours, recapturing the overhead they require and tracking revenue per hour more than gross profit.
“It’s a different way of looking at our business,” Leal says.
Ross visits a few times each year, sitting down with the company’s four area managers and vice presidents to review financials from their nine locations throughout Florida.
And those financials have improved in the five years he’s been working with Vila & Son: The company’s maintenance division has seen its revenue quadruple to about $25 million a year – half of its total revenue.
“It’s been a great success,” Leal says. “We’ve been able to really use these tools in the day-to-day management of that side of the business.”
Leal says he spends less than a percent of his total revenue each year on Ross and other consultants – about $100,000 annually.
But he’s quick to add that he gets his money’s worth: When Ross is in Miami for a two- or three-day visit, Leal picks him up every morning at 6:30 and peppers him with questions until close to midnight.
“I can say that Frank is a very valuable part of our success and we certainly value what he does for us. He’s contributed quite a lot to our success,” Leal says. “We’ve learned an awful lot from him and we’re still leaning from him.” – Chuck Bowen
When Mike Russo stuffs his hand in his pocket and grabs his ringing cell phone on Saturday mornings, he has a pretty good idea about who might be on the other end of the call. Odds are high that the voice on the other end of the line will belong to Bob Coulter.
Eight years ago, Russo, the owner of Russo Lawn & Landscape, in Windsor Locks, Conn., read a story about Coulter’s help with another business whose problems with hiring quality employees were similar to his own.
“If a company grows, you find out that an owner can’t do everything,” Russo says. “You need really good people. Well, you can’t just go to Wal-Mart and find really good people. You have to be able to hire the right people and then develop them into better people, and sometimes owners can’t do that. So you need people like Bob.”
Specifically, you need business coaches. Coulter is just that, a business coach with JP Horizons. He has worked with Russo throughout the last eight years, passing along those lessons about what qualities really matter in an employee and how early you can find those qualities, how to better coach employees and just providing a sounding board of sorts for Russo.
Russo and Coulter talk three Saturdays each month. “It’s early morning, because that’s how I am,” Russo says.
The conversations range from following up on e-mails during the last week, to plans for the business, to friendly conversation about family. Russo budgets about $20,000 per year for Coulter and another consultant who focuses on financial matters. During their years together, Coulter has helped Russo more than quadruple the number of his employees and his revenue.
“If we hadn’t made the decision to hire these guys and stick with them,” Russo says, “I would probably still be running a couple of crews and pulling my hair out. No doubt about it.” – Matt LaWell
Drew Watkins knew what he wanted in a buyer when he decided to sell his company: He didn’t want to sell to get out of the business. The company was growing so fast, Watkins needed more resources. So, he sought a buyer to fill those needs, but he also wanted to stay involved in the day-to-day operations after the sale.
Instead of trying to find the perfect buyer by himself, Watkins opted to let Jeff Harkness of Three Point Group serve as a consultant to help find a buyer and negotiate the deal.
“We’re still running a business,” says Watkins, president of Atlanta-based Piedmont Landscape Contractors. “The partners here are still running a business so we can’t really focus on the details that it takes to do that correctly and efficiently because it’s a lot of work. So he’s there really running point and he’s telling us the information that the buyers need, when they need it.”
Mostly, Harkness provided Watkins an unbiased opinion. Harkness didn’t sugar coat anything, and gave Watkins the truth about Piedmont’s strengths and weaknesses.
“It’s really good inside information that you just don’t think about when you are day-to-day in the organization,” Watkins says.
Of course, no negotiation goes without a snag or some hurt feelings. A consultant can help any roadblocks that crop up during a deal.
“I can’t say how valuable that is because post-close you are working with these folks now and you really want to maintain that relationship in as many instances as you can,” he says. “He was able to take a lot of the thunder. Not that there was a lot, but the times that there was, he was right there on point and he represented us very well.”
And that may have been the difference between a done deal and a missed opportunity.
“If he hadn’t been there, I don’t know if we would have gotten to the finish line,” he says. – Brian Horn
Think you have what it takes to be a consultant? Click here to find out!
Be prepared: read what consultants want their clients to do before they come to visit.