The 2014 GIE+EXPO and Hardscape North America will happen Oct. 22 for dealers, distributors, retailers and media and Oct. 23-24 for everyone in the industry. The Outdoor Demonstration area will be open Thursday and Friday, Oct. 23-24. Online registration will be available early in 2014. If you are thinking about registering for 2014, take a look at the GIE+EXPO Insider from 2013, which gives an overview of all aspects of the show.
A small number of landscape companies reach $1 million in annual sales. Why don’t more entrepreneurs in this industry build million dollar companies? One reason is that they do not have a clear plan for getting there. It’s like putting together a puzzle without having the puzzle box top.
I started working with a contractor in Idaho four years ago. He was making approximately $300,000 a year, but by implementing good pricing, job costing and marketing, he increased his sales dramatically and will be around $1.2 million in sales this year.
As important as pricing, job costing and marketing were, he built a high-performance team to include a construction manager, a maintenance manager and a landscape installation designer / sales person.
To build a $1 million landscape installation business, you need to have a road map (the puzzle box top) with mile markers, intersections and, most of all, a clear destination. We’ll use benchmarks, critical numbers and business pressure points to illustrate how to get there.
This includes materials, labor, labor burden and equipment costs but no costs for subcontractors. Second is crew size. The vast majority of installation crews contain three people – a crew leader and two laborers.
Combining the two critical numbers, this crew should generate at least $300,000 in annual revenue. They often will generate more but, if they are working a nine-month season, $300,000 is the minimum they should generate. Third is general and administrative (G&A) overhead. G&A overhead for any landscape company less than $5 million in annual sales should total no more than 25 percent of sales.
Stage 1 ($300,000+): At this stage, the entrepreneur is working in the field with two full-time crew members. She is marketing the company, designing and selling jobs, and doing the office work. Sales should be a minimum of $300,000 (3 x $100,000). G&A overhead should be roughly $75,000 ($300,000 x .25). Half of G&A overhead goes into the owner’s pocket as her salary for doing office work. At this stage, the entrepreneur is supervising two laborers.
Stage 2 ($600,000+): At stage two, the entrepreneur has to have two crew leaders running a three-man crew. Revenue should total at least $600,000. The crew leaders must be able to do their jobs with minimal supervision. Otherwise, the entrepreneur is creating a baby-sitting service. The entrepreneur cannot be one of the crew leaders for she has to market the company and sell enough work to keep two crews busy full time. It’s also essential that the entrepreneur hire a part-time office helper. G&A costs should be around $150,000, half of which go to pay for the office helper and entrepreneur’s office work.
Stage 3 ($1 million:) At stage 3, the entrepreneur has three, three-man crews. If she has crew leaders who can work with minimal supervision, she should be able to do $1 million in annual sales. Some (or all) of the design work will probably be subbed out and a full-time office manager will need to be in place. G&A overhead will be in the $250,000 range, of which, $125,000 goes to salaries for the office manager and the entrepreneur’s office work.
She has to be able to hire or train three crew leaders, and an office manager. These people will implement the systems. Systems are second. An entrepreneur has to build the systems to control the business (field production, accounting, estimating, job costing, etc.).
Third, she has to be able to increase company marketing efforts in order to keep three crews busy.
However, it should make the route easier to follow. It should also tell you when you are off course and how to get back on course. As someone once said, “Half of getting to your destination is knowing the right road to take to get there.”
JIM HUSTON runs J.R. Huston Consulting, a green industry consulting firm. See www.jrhuston.biz; mail email@example.com.
I worked for Sterling Landscape all the way through high school. John Sterling was from California. He told me that if you want to pursue a degree in landscape architecture, they have the best schools in the country.
And so, when I was 19, I drove down to the Bay area. I've never left.
My original intent was to come to California, get my degree and then go back to Boise and start my own company. Cagwin & Dorward was really what kept me here. I thought, “I'm probably never going to find a better company to work for than Cagwin & Dorward.” So I stayed.
Thirty-four years. We have a way of describing the culture at Cagwin & Dorward: It really feels like family. We probably have over 100 employees that have been with the company for 15, 20 years plus.
Four of the seven current owners of Cagwin & Dorward, myself included, all started at the very bottom of this company.
When you’re 19, oftentimes your goals aren’t real high. But my thought back then was, if I could get a job working in the office, I will have considered myself successful in this company.
We recognize that the customer may not always be right, but they're still always the customer. Tom Cagwin’s philosophy was, “Just make it right with the customer.” His point always was that maintaining our reputation is more important than a few thousand dollars.
We need to continue to keep growing the business so that we can provide opportunities for people to move from an entry-level gardener all the way up to become one of the owners of the company.
I just took over in August of this year. Dennis Dougherty was the former president and CEO. He had been with the company for 41 years. He started as a gardener as well.
We get constant solicitations to sell. But we made the decision long ago that Cagwin & Dorward will never sell. We'll always be a privately held company, and we will always be Cagwin & Dorward.
Several of our really good friends sold their businesses to LandCare, which was then rolled up into TruGreen. And some of them sold to TruGreen. I never really understood why. I mean, obviously, there was a tremendous amount of money involved, but I think being in business should be about more than just making money.
One of the things that I take a tremendous amount of pride in is that we have a very, very good reputation in our marketplace.
We're seeing signs of the recovery in Northern California. I think it's been getting better for the last probably two or three years. A lot more customers are starting to spend more money on extras.
They’re also becoming more aware of the cost of water. In a lot of areas, the cost of landscape water for customers has almost doubled in the last five years.
We were always judged in the past based on how green the landscape was. There was a lot less emphasis put on the cost of water, and much more emphasis put on the appearance of the landscape.
We're starting to see that shift.
It’s providing us with opportunities, not only opportunities to educate our customers, but to work directly with them on budgeting and irrigation retrofits and landscape renovations.
As the population continues to grow and water becomes an even more limited resource everywhere, there’s not going to be enough water to continue to keep putting in landscapes with – or even maintaining landscapes with – vast amounts of turf where it serves absolutely no value other than aesthetic value for the property.
In the next five to ten years, there'll be a lot less emphasis and focus on new construction and more emphasis on landscape renovation for our existing customer base.
The continued growth and success of your company is going to be highly dependent upon hiring good people. You need to make the effort and the investment to train them. You need to treat them well so that they'll stay, and your growth as a business is going to be highly dependent upon good people who care.
Check out some of the sights at the 2013 GIE+EXPO. Photos courtesy of PLANET/Philippe Nobile Photography.
Attendees had the chance to get a feel for new equipment.
Everything from riding mowers to tree chippers were on display.
Company employees were on hand to explain all aspects of equipment.
All were welcomed to get behind the wheel.
According to show officials, more than 18,000 people registered the show, a six percent increase compared to last year.
Click here to see photos from the event.
The weather was unseasonably cool in Louisville for this year’s Green Industry Conference (GIC) and GIE+EXPO, but that didn’t dampen the enthusiasm of the 75 PLANET members and conference attendees who volunteered for the third, annual PLANET Gives Back event. This event was created in 2011 as a way to give back to the conference’s host city and to showcase the expertise, knowledge and resources of the landscape industry and the impact it makes on communities. It is organized by PLANET members with the help of sponsors and local donations of material and equipment.
Home of the Innocents, a nonprofit shelter and pediatric convalescent center, was the focus of PLANET Gives Back 2013. The Home provides services to those facing severe crisis, including children who have been abused, neglected or abandoned, are medically fragile or have autism.
On Oct. 23, PLANET Gives Back volunteers spent the afternoon sprucing up the grounds of the Home. They installed more than 25 trees that were lost a few years ago as a result of a construction project and a drought. These trees will help to improve the natural screening along the perimeters of the property, increase air quality and improve the NuLu (“New Louisville”) areas canopy. In addition, the volunteers installed and repaired new drip irrigation around all of the newly installed trees to ensure they have a healthy and successful future, installed new playground mulch so the children have a safe area to play in, cleaned up the butterfly garden and put it to sleep for the winter season and cleaned up the raised planter beds and installed a cold crop for the winter.
“I was very proud and honored to have led the team this year for the third annual PLANET Gives Back and to be able to work among the members and volunteers,” said PLANET Gives Back Project Leader, Alex Fransen, landscape development manager for Steele Blades in Louisville. “We work in a very humble industry and, as a Louisville native, it means a lot that the association would be willing to give back to our city and help benefit a very deserving local organization, such as the Home of the Innocents. We do these projects because it feels great to have a positive impact on our communities and it’s the right thing to do.”
Students from three PLANET-accredited colleges and universities also participated in PLANET Gives Back this year: Cincinnati State Technical Community College, Cincinnati; Hinds Community College, Raymond, Miss.; and Ozarks Community College, Springfield, Mo. Martha Hill, program manager, Landscape Management Department of Hinds Community College, makes community service a regular occurrence with her students.
“To be a part of PLANET Gives Back this year was great for our team of 10 students,” Hill said. “The networking opportunities were such a subtle thing, but valuable in so many ways – being able to work alongside industry professionals, company owners, equipment reps, and other students. Most community service projects ‘give back’ more to those who participate than to the recipients. PLANET Gives Back was no exception.”
This year’s project was in keeping with Louisville’s Mayor Greg Fischer’s initiative to revitalize and enhance Louisville neighborhoods. Maria Koetter, Louisville’s director of sustainability, stopped by to pay the volunteers a visit. “We love what you do for the world. You keep our world green. You keep our world beautiful,” she told them. One of the goals within the mayor’s strategic plan includes the planting of 10,000 trees. He is also focused on promoting volunteerism and giving back.
In addition to the volunteers, a number of companies helped to make this event happen. PLANET is extremely grateful to the event’s lead sponsors: GIE+EXPO, Bartlett Tree Experts, Belgard Hardscapes, Blizzard Snowplows, CNA Business Insurance, Fisher, Include Software, NatureSafe, JOHN DEERE, and Western; and to STIHL Inc. and Syngenta, the supporting sponsors.
For more information on the event, click here or call the PLANET office at 800-395-2522.
The author is associate director of public relations at PLANET.