Tomlinson Bomberger, a 31-year-old lawn care, landscape and pest control company based in Lancaster, Pa., first began subbing out its mowing services when contracts became too much for the company’s one-man, one-mower crew to handle.
At the time, the owners believed it would be easier and more profitable to simply focus on the company’s many other services, which include chemical lawn care, tree care, landscape design and installation, athletic turf management and pest control.
Yet two years ago – after four years of subbing these services to mowing contractors that Tomlinson Bomberger managed for clients – the firm decided to take them back. Today, the company employs five guys and owns trucks and mowing equipment. Tomlinson Bomberger once again mows commercial and residential accounts.
Why? On the surface, the answer is relatively simple. Company leaders simply found that they were leaving valuable revenue on the table by contracting out such services.
“As we started growing, we realized we were helping other guys out instead of helping ourselves,” says Mike Lindemuth, Tomlinson Bomberger’s landscape group manager.
“Everybody tries to set themselves apart in some manner to let customers know what services make them unique or different,” adds Don Long, the company’s general manager. “In our case, it was broadening our services to include mowing.”
Yet peel back the layers, and the answer is more nuanced and complex. Bringing mowing in -house helped Tomlinson Bomberger to sell itself to commercial clients that were seeking one-stop-shopping for their landscape needs. Moreover, the firm was able to better control quality and offer greater value to customers. Finally, the move helped Tomlinson Bomberger to enhance its image as a large, vertically-oriented company.
“Word’s getting around that we can do it all,” Lindemuth says. “People know they can call and ask about the disease in their lawn, the limb hanging over their house that needs pruning and putting in a patio out back. We’re known as a one-stop-shop.”
One source. Perhaps the biggest reason for the shift was that many large commercial clients simply preferred doing business with a company that could reliably handle all of their needs. Although Tomlinson Bomberger was already a full-service company, adding mowing to its list of in-house services gave it yet another competitive advantage in the market.
“Many of our accounts, particularly commercial ones, liked the idea of one source for their exterior property needs,” Long says. “In this competitive environment, cutting one more player out of the delivery channel was a way to add to the value equation.”
It’s not necessarily that Tomlinson Bomberger had major quality control issues with its subcontractors, or that its clients were unhappy with the level of service they received. It was simply easier and more efficient to maintain quality control with its own workers.
“Our coworkers are our teammates, and arguably we have more control over them,” Long says. “We didn’t generally have quality control issues before, but it happened now and then.”
The company also realized administrative savings by packaging services together – despite the fact that mowing isn’t generally as profitable as some other services. “The volume made it easier to justify, and covered the return on our investment,” he says.
From an expense standpoint, it wasn’t burdensome for the 100-employee company to acquire a few more mowers and trucks. Tomlinson Bomberger’s physical plant was large enough to accommodate the extra services, so that wasn’t an issue, either.
Perhaps most significantly, the company was able to pass along some of its efficiencies as extra value to clients. Adding mowing to its list of services meant that Tomlinson Bomberger was able to offer better prices to customers – a win-win for everyone.
“It made us more cost-competitive,” Long says. “Everyone in the supply chain wants to not only cover costs, but make a profit to boot. If you build in an extra layer within that chain, then there’s a possibility and even a probability that it could cost a little more.”
Being a full-service company means ensuring that all employees are well-versed in the multitude of services that the company provides. Yet Lindemuth says that this isn’t really an issue since the family-oriented company often cross-trains its employees.
“As we grow and add new services, people become familiar with those services,” he says. “This week, we have a mulch guy riding with the pest control guys. It’s slow, so he gets training and the other guy gets help. Instead of being on layoff, they’re working.”
When asked what advice he’d offer to companies seeking to add mowing services, Lindemuth counsels others to make sure they have well-trained employees. “If you’re going to be a one-stop-shop, you have to make sure you’re not only knowledgeable about one thing,” he says. “You have to be knowledgeable about everything.”
For Tomlinson Bomberger, offering a full range of services has helped the company to obtain an enviable market position in the Greater Lancaster metro area. There’s no other full-service company of their size in the area, and they prefer it that way.
“We’re the only one-stop-shop in town – the next one is 100 miles away,” Lindemuth says. “There’s a handful of commercial accounts that request that. They’re looking for just one vendor to write a check to, and we’re happy to be that company.”
With lawn care already in the fold, Tomlinson Bomberger naturally added pest control.
Based in Lancaster Pa., Tomlinson Bomberger, a 100-employee lawn and landscape company, added pest control to its roster of services six years ago. Every year since then, it has seen double-digit percentage growth in that area.
“It’s been well-received and a nice source of growth,” says General Manager Don Long. “It’s complementary because our lawn care customers ask for this service, but we get separate calls. Everything else we do is exterior, and this is interior, so it’s different.”
Landscape Group Manager Mike Lindemuth adds that the transition to providing pest control services wasn’t too tough because many of the procedures are actually similar to chemical lawn care.
“It’s still a pump, a truck and a sprayer – instead of killing spider mites, now we’re killing spiders,” he says.
“You don’t have to go out and learn a bunch of new equipment, even if the lawn care applicator has to get tested and licensed.” The most important thing, he says, is making sure that your staff is knowledgeable about all services.
“From the person answering the phone to the technician doing the spraying, everyone has to be knowledgeable,” he says.
“You don’t want to mistake a cockroach for a cricket.”
During go-time in summer, invoicing tends to get pushed aside to make time for production and sales.
Equipment needs shoot through the roof, so the urge to make capital expenditures is hard to resist.
And you can keep your staff busy, so you ramp up your payroll to service customers.
Problem is, when summer winds down and seasons shift into slower times, cash flow can dip quickly, leaving you in a difficult situation. Collections are on the fritz, monthly payments are due for equipment that is not in use and everyone needs to get paid on Friday.
Lawn & Landscape spoke with three firms about how they manage to keep the cash flowing year-round, and what strategies they deploy to make due when times are tough.
Focus on flexibility
A flexible workforce is a secret ingredient in the “liquid” at Grant & Power Landscaping in West Chicago, Ill. Cash flow is preserved when the going gets tough or the snow doesn’t fall. That’s because the firm can scale back on payroll, a primary expense for a service business. And if spring rushes in more business than his people can handle, the company builds up the workforce quickly with reliable subcontractors.
A crop of hourly employees works on an as-needed basis. “So in spring, we are swamped and we need help here and there, so we have that extra man-power,” says Jan-Gerrit Bouwman, partner.
On the other hand, if a snow season looks unseasonably mild, “we do lay off a lot of people and cut as many hours as possible,” Bouwman says. And, the budget is adjusted. “We do not take on expenses like equipment. Some preventive maintenance can wait – it can only wait so long, but if there are items that can be postponed, we have done that.”
Typically, Grant & Power employs 100 people from April through November. During a mild winter when snow business is down, the company will trim its workforce down to about 25. If the white stuff falls generously, Grant & Power might keep 150 trucks on the road. “But they are all hourly, and a lot of them are subcontractors,” Bouwman says.
Grant & Power can make important personnel adjustments because management carefully tracks the cash flow each week. “We track the cash flow in and out every week – all the bills and invoices,” Bouwman says.
Weekly reports are submitted, and projects are created and edited to reflect the actual situation: weather, economy, accounts receivables and other factors that affect cash flow are reviewed.
Just in case cash flow gets tight, the company holds a line of credit. In 2009, when the company was hit hard by the recession and laid off 20 percent of its staff members (who were rehired five months later), this bank facility helped stabilize the company. Grant & Power has paid back the debt. “It’s not ideal to use a line of credit, but that’s a decision you have to make as management,” Bouwman says.
Bouwman says the most common mistake landscape operators make is moving forward full throttle without minding the bottom line, cost of sales, margins and other key financial indicators. “Many don’t look at their cash flow on a weekly, or even monthly basis,” he says. “All of that is important to us.”
Working a plan
Never take a job that is more than 25 percent of your annual volume. That’s what a mentor told Gary Mallory, CEO of Heads Up Landscape in Albuquerque, N.M. When the company was young, Mallory was tempted by a prize job that became one-third of the company’s annual volume. Big mistake. “They weren’t paying us and it was killing us,” Mallory says. On a smaller scale, there are plenty of companies that feverishly make collections calls on Thursdays to make Friday payroll. They need that money in because there’s no cash in the bank. Mallory offers this logical advice:
Set aside time each week to focus on collections. But he admits that he is guilty of pushing this task to the back burner during the busy season. “We have let a few billings slip through the cracks, and not a large amount of money – cleanups or one-time jobs,” he says.
Collecting long after a job is complete never elicits the same response from clients – there’s no real urgency to pay. And slow collections are a major cause of cash flow drought, Mallory says. Designated desk time to make calls is the best way to get this bookwork done. “A lot of us shy away from receivables because it’s not as fun as selling a new job or designing a project,” Mallory says.
Aside from collections, Mallory says many owners wait to lay off employees until it’s too late and more money is lost than is coming in the door. “It’s best to be open and honest with employees and communicate as far in advance as possible (that you’ll be laying off),” he says. But don’t avoid it all together for the sake of keeping your team on board – especially if your financials are taking a hit from too much labor. “It’s important to review your backlog constantly so you know what work load is coming up and you can plan for that.”
Stretching cash during slower times is possible by working with vendors to secure favorable terms. For example, Mallory had made arrangement with his insurance company to make a down payment in the winter followed by monthly payments to avoid a lump sum hit. “You can negotiate equipment terms and pay within 60 to 90 days,” he says.
And back to planning, businesses that are having a good year should be sure their tax and insurance payments reflect their volume.
Forecasting, budgeting and monitoring that budget will prevent any surprises that could derail a company from meeting financial goals. An unexpected tax bill could mean no employee bonuses – or not enough cash to make payroll. “If you told the insurance company you’d be a $2 million company and then you do $3 million, they will audit you and you’ll get a big, fat insurance bill,” Mallory says. “That can be a real surprise and drain on your cash flow.”
Collecting more cash
Kevin Bonin keeps collections and cash flow under control by doing his best not to allow receivables to age even a day after a job is complete. Of course, this is the ideal – reality doesn’t always play out this way.
“It’s all about being able to produce the product, bill it and collect it as quickly as you possibly can so you don’t run into cash flow issues,” says Bonin, president of Bonin’s Lawn Service in Lafayette, La. That’s why Bonin breaks payment into two parts for larger projects like cleanups. Half is collected up front, and half upon completion during the walk-through. “That way, we are making sure the customer is happy, we are asking for a referral for the next job and we are asking for payment,” he says.
Handling the job wrap-up and collections saves time and avoids having to place calls after the fact when payment is missing-in-action. Bonin never allows those jobs to go unpaid.
As for monthly contracts, those bills go out the 25th of each month with a 10-day net due date on payment. By the fifth of the following month, Bonin’s Lawn Service is generally collecting on those accounts. “Sometimes, we get behind on billing,” Bonin says, relating how that can quickly affect cash flow. “Billing is where most people get into a cash-flow crunch.”
Bonin, who works with a consultant to build a budget, says his company hasn’t been in that position for some time. In the early days, he was an equipment junkie. “We purchased machinery that wasn’t being utilized,” he says. Over time, Bonin sold off equipment he couldn’t keep busy. “Rental stores have equipment readily available so you don’t have to pay monthly for a piece of equipment you aren’t using.”
Also, before Bonin brought on a Christmas Décor franchise and boosted his off-season business – landscape maintenance is always “in season” where he operates, but it does slow down in winter – he would take just about any job to maintain cash flow. The holiday decorating business ramps up after Halloween and keeps Bonin’s workforce busy during a time when he typically laid off workers. “That allows us to have a stronger business model because we can keep our high-production, more qualified employees year-round,” he says. L&L
Custom Landscaping and Lawn Care doesn’t only offer design/build services. Maintenance services are also available.
The phone at Custom Landscaping and Lawn Care rings at 10:58 p.m. A real person picks up the phone and is taking care of business. Not an answering service. An employee. It’s early summer and the New Jersey firm has an advertising campaign that’s hot. They aren’t going to miss a call – and the office is open for another hour.
“We don’t want to lose leads that might be coming in, no matter what time of day,” says Frank Leloia Jr., president of the firm his father started in 1982 with a push mower and three accounts.
When Leloia took over after graduating college in 2005, the business was still home-based and bringing in just over a quarter-million in revenues. Today, the operation has increased eight-fold with 25 full-time employees, servicing 1,000 homes each week.
And to add another layer of complexity to the story, Leloia and his wife welcomed triplets last year. Business and life are busy – overflowing, actually. And that’s a good thing in every respect.
Frank Leloia, left, started the company in 1982, but Frank Jr., right, took control after graduating college in 2005.
Expanding with experts.
Steady growth during the last 30 years has brought the company from a small-time startup to a diversified landscape firm providing maintenance, design-build, fertilization and irrigation services.
Leloia describes his father, Frank, as an “old-school, very hard worker” who started the firm in the family’s basement. The company trucks were parked in the driveway for nearly 20 years. Frank Jr., now running the business, began working on the crews when he was about 12 years old. “I literally grew up in the business, learning every aspect of it,” he says. “So, it’s funny, when people ask, ‘How much experience did you really have taking over the business as a 30-year-old?’ The truth is, I’ve worked there almost every day alongside my dad since I can remember.”
So when Leloia joined the business in 2005, he had ideas of what the company could become and how to take it to the next level. Growth was always the plan. “We thought we would multiply what we were doing and that the profits would remain the same, but we realized that is not the way business works,” Leloia says.
Leloia focused on gradual growth, expanding into new services by bringing on experts to manage those new departments. The first big step was in 2008 when the company hired its first full-time salesperson. “It was a learning curve,” Leloia says. “I had to teach him our way of doing things – the way we price jobs and the way we operate. Sometimes it’s hard to tell someone who comes over from another firm, ‘I know you’re used to doing this for 10 years, but this is the way we do it here.’”
Leloia Jr. began focusing on the design/build portion of the business in 2005.
Finding key people to run divisions at the firm has been a key to its success, Leloia says. He began focusing on the design/build portion of the business in 2005. Eventually, he hired a fertilization technician and, later, an irrigation manager. This year, the company brought on a full-time service manager that oversees the lawn care business at-large.
In the last seven years, the company has grown by adding services and expanding its existing offering – digging deeper to reach more clients and its “sweet spot” customers. Those are people who want to invest in their lawns, and who want to deal with a single service provider for all of their landscaping needs.
By taking care of a client’s range of landscaping needs – from lawn cutting to fertilization to irrigation and enhancements – Leloia and team knows that the property is not getting short-changed in one area or another.
For example, Custom can cut the lawn perfectly each week, but if it is not properly watered, the yard will not thrive (and who’s to blame?). Or, if the lawn care program is sub-par, despite Custom’s cutting, irrigation and landscape installation efforts, the property will not look its absolute best. And Leloia wants to deliver nothing less.
“We tell customers this all the time: If you don’t have a plan moving forward, it’s almost like we are guessing at (what to do for your property),” he says.
Custom sets up the plan: what to do year-round so the property shines. “The results are not an overnight thing – it takes time, but we set those expectations at our first meeting with clients,” Leloia says.
An eye on operations.
Leloia reminds his team that they have 200 days to recoup the company’s overhead expenses. That’s it. “Some people argue with me and say, ‘There are 365 days in a year, why only 200 days?’”
“Well, because we are a seasonal business,” Leloia tells them. “And we still have customers in the wintertime, but we can’t recoup our costs with the weather we have in New Jersey.”
That said, Custom Landscaping and Lawn Care builds each bid around the firm’s overhead costs. The company has since moved out of the family house and into a headquarters with an ample yard for storing materials. But the overhead is always in check because Leloia keeps a close eye on those numbers.
“It’s critical to know your true costs and really know and manage your overhead expenses,” he emphasizes, adding that the majority of companies in the industry ignore those budget line items.
Another issue Custom watches carefully: routing. Crew leaders are equipped with mobile devices that run a program so they have their routes in hand. When they arrive at an account, they hit “arrive” and essentially clock in. When they are finished at that house, they hit “depart.”
The mobile phone software boosts efficiency in the field because crews are held accountable for their time on each job.
Meanwhile, Leloia says he wants to continue improving an already robust website (it has a voice-over intro telling the story of the firm).
“I want to add more videos to educate our customers, because the more our customers know, ultimately the more satisfied they are with our work,” he says.
They understand how the services fit together as an entire landscaping and lawn care plan. And they buy in. This comprehensive approach has served the company well, and Leloia sees room to continue expanding in the areas of business that Custom currently offers.
“We have our systems in place,” Leloia says. “Outside of the weather – our biggest challenge with all the rain around here this season – our employees are great, and we have the right people in the right positions in the company.”
Of course, Leloia is definitely juggling – life with three newborns at home makes business in the high season seem calm. Reflecting on the “growth” at home, Leloia puts business-life in perspective: “That’s the best thing that ever happened,” he says. L&L
Give us credit
Credit only. That’s the policy at Custom Landscaping and Lawn Care in New Jersey. “The only way we will do business with you is if you leave a credit card with us on file,” says Frank Leloia, president.
There are no exceptions. “We are willing to walk away from a lead that is already committed to us if they will not comply with the way we do business,” Leloia says.
Why the hardline approach? “It helps our cash flow tremendously,” Leloia says. And, it frees up administrative time because office staff is not chasing down late payers.
Leloia was a bit concerned that customers would not want to comply with the new policy, but he determined it was necessary. That means no cash, no checks, no invoices sent at the end of the month and collected 30 days later. Jobs are performed and cards are charged the day after the time of service.
Customers receive an email confirming that Custom was on their property and performed the work. The next day, the card on file is charged and an email notification is sent.
The credit-only system keeps cash flowing so the company can pay its vendors on time and manage its overhead expenses. “The cash flow is where it needs to be,” Leloia says.
Photos courtesy of custom landscaping and lawn care
In its 13th Garden Trends Report, Garden Media Group finds consumers spending more leisure time outdoors, which means more money spent on the land. People are socializing more, hosting garden parties, lawn games and brewing events.
Globally, the 2014 Garden Trends Report finds the gardening and outdoor living market is expected to increase yearly by 3.5 percent through 2016, when it should reach $220 billion. The North American market, which has remained flat at $58 billion, is expected to grow annually at a rate of 1 percent for the next four years.
“2014 is about balance,” says Katie Dubow, creative director for Garden Media. “People understand the serenity the outdoors brings to their lives, but they want that space to provide both a private oasis and a hangout for socializing,” Dubow adds.
Below are some trends for 2014:
Dress up your yard.
From decorative throw pillows to fanciful furniture and colorful garden ornamentation, homeowners are putting their personal stamp on their yards.
There is a growing emphasis on using outdoor spaces as extensions of today’s homes, fueled by the social trends of outdoor gatherings for barbeques and lawn parties, according to global industry analysts.
This new emphasis will drive demand for outdoor furniture, planters and other furnishings that can be used out-of-doors.
Keep it simple.
Classic elegance in colors and visuals will become a popular attitude of 2014.
Think monochromes or pairing a single color with white for simplicity, whether for plants, pots, outdoor fabrics or furnishings.
This is also achieved with a planting of a single variety for an even more dramatic sense of unity.
Close to home.
Taking local to the next level, people are growing the world in their gardens, mixing cultures and embracing what is local to their own region.
As they connect to the history that surrounds them, they are gaining an appreciation for the land, the people, and the culture that have brought their community and region to this point in time.
As they embrace “local” they are willing to improve or enhance their lives with “outside locals” – elements from other cultures that add inspiration or a hint of the exotic.
Neat clean lines are out. Geometry explodes in the outdoor living space in the form of fractional shapes like triangles, circles and squares.
This adds architectural structure to the garden, whether it’s with the structure of the plants themselves, the designs into which they are planted, or the art and accessories that accompany them.
Young men are discovering the great outdoors and are grilling, growing and taking their kids out to play in the dirt. Men 18-34 are spending $100 more – $441 annually – on the lawn and garden sector than the average gardener, according to the National Gardening Association 2013 Survey. This demographic is also heavily involved in the brewing and wine making trends, growing their own hops, grains and grapes. They also gravitate towards edibles, like hot peppers, that can be used in grilling.
Young men are also making parenting more of a “guy thing.” With 20 percent of fathers as the primary caregivers of preschoolers and 33 percent regularly caring for their children, according to the U.S. Cenus Bureau in 2011. These fathers are instilling in their children an appreciation for nature and the outdoors at an early age.
Bees are at the forefront of environmentally aware consumers’ minds, inspiring them to plant native, pollen-rich flowers, trees and veggies to provide safe shelters.
With more than 85 percent of the planet’s plant species dependent on pollinators for their existence – many of them food crops – the fact that one-third of all honey bee colonies in the country are depleted is of grave concern.
Consumers are taking steps to nurture biodiversity to counter bees’ habitat loss by providing bee shelters in attractive and effective forms. Consumers are also being careful to limit dangerous chemicals and bee habitat destruction.
Benefits of trees.
Trees increase property values, save on heating and cooling expenses, reduce stress, foster safer, more sociable neighborhoods and clean the air.
Americans are being asked to plant or care for trees to replenish this loss. Doing so brings together and benefits communities.
These trends offer insight into how consumers will seek to bring balance to their lives through the home and garden segment.
The complete 2014 Garden Media Trends report is available for free download by visiting bit.ly/gmgreport.